S-3

As filed with the Securities and Exchange Commission as of August 27, 2003

Registration Nos. 333-            

and 333-            -01

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

(Exact name of Registrant as specified in its charter)	(State of Organization)	(I.R.S. Employer Identification No.)	(Address and Phone Number of Principal Executive Offices)
THE COLONIAL BANCGROUP, INC.	Delaware	63-0661573	One Commerce Street, Suite 800 Montgomery, Alabama 36104 334-240-5000
COLONIAL CAPITAL TRUST IV	Delaware	(applied for)	One Commerce Street, Suite 800 Montgomery, Alabama 36104 334-240-5000

WILLIAM A. MCCRARY

General Counsel

Post Office Box 1108

Montgomery, Alabama 36101-1108

(Name and address of agent for service)

Copies to:

HUGH C. NICKSON, III	EDWARD F. PETROSKY
Miller, Hamilton, Snider	Sidley Austin Brown & Wood LLP
& Odom, L.L.C.	787 7th Avenue
One Commerce Street, Suite 305	New York, New York 10019
Montgomery, Alabama 36104	Telephone: 212-839-5455
Telephone: 334-834-5550	Facsimile: 212-839-5599
Facsimile: 334-265-4533

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit (1)	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Preferred Securities of Colonial Capital Trust IV	4,000,000	$25	$100,000,000	$8,090
2003 Junior Subordinated Debentures of The Colonial BancGroup, Inc. (2) (3)	—	—	—	—
Guarantee of The Colonial BancGroup, Inc. with respect to the Preferred Securities of Colonial Capital Trust IV (3)	—	—	—	—
TOTAL	4,000,000	—	$100,000,000	$8,090

(1) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

(2) The junior subordinated debentures will be purchased by Colonial Capital Trust IV with the proceeds of the sale of the preferred securities. No separate consideration will be received for such debentures, which may be distributed to the holders of the preferred securities upon the liquidation of Colonial Capital Trust IV.

(3) This Registration Statement is deemed to cover the preferred securities of Colonial Capital Trust IV, the junior subordinated debentures and the guarantee. It includes the rights of the holders of the preferred securities under the guarantee and certain back-up undertakings, comprised of the obligations of The Colonial BancGroup, Inc. under the declaration of trust of Colonial Capital Trust IV and as borrower under the junior subordination debentures, to provide certain indemnities in respect of, and pay and be responsible for certain costs, expenses, debts and liabilities of, Colonial Capital Trust IV (other than with respect to the preferred securities) and such obligations of The Colonial BancGroup, Inc. as set forth in the declaration of trust of Colonial Capital Trust IV and the junior subordinated indenture, in each case as amended from time to time and as further described in the registration statement. The guarantee, when taken together with The Colonial BancGroup Inc.’s obligations under the junior subordinated debentures, the indenture and the declaration of trust, will provide a full and unconditional guarantee on a subordinated basis by The Colonial BancGroup, Inc. of payments due on the preferred securities. No separate consideration will be received for any guarantees or such back-up undertakings.

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 this Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated August 27, 2003

PROSPECTUS

4,000,000 Preferred Securities

Colonial Capital Trust IV

            % Preferred Securities

(liquidation amount $25 per preferred security)

fully and unconditionally guaranteed by

The Colonial BancGroup, Inc.

The Trust

Colonial Capital Trust IV is a Delaware statutory trust. The trust will:

• sell             % Preferred Securities representing undivided beneficial interests in the assets of the trust to the public;

• sell common securities representing undivided beneficial interests in the assets of the trust to Colonial BancGroup;

• use the proceeds from these sales to buy an equal principal amount of junior subordinated debentures due October 1, 2033 of Colonial BancGroup;

• distribute the cash payments it receives on the junior subordinated debentures it owns to the holders of the preferred and common securities; and

• redeem the preferred securities on October 1, 2033 or earlier at the option of Colonial BancGroup as described in this prospectus, subject to any required prior approval of the Federal Reserve Board. We may redeem the preferred securities, in whole but not in part, at any time if an event occurs that results in an adverse consequence for the tax or regulatory Tier 1 capital treatment of the preferred securities, or for the investment company status of Colonial Capital Trust IV. One possible type of regulatory capital event that would permit us to redeem the preferred securities is a change in the Tier 1 regulatory capital treatment of the preferred securities that the Federal Reserve Board could adopt in light of certain recent accounting changes addressing the criteria for consolidation of Colonial Capital Trust IV and the appropriate balance sheet classification of the preferred securities, as discussed in this prospectus.

Quarterly Distributions

• For each preferred security that you own, you will be entitled to receive cumulative cash distributions at an annual rate equal to             % on the liquidation amount of $25 per preferred security on January 1, April 1, July 1 and October 1 of each year, beginning January 1, 2004.

• Colonial BancGroup can defer interest payments on the junior subordinated debentures at any time for up to 20 consecutive quarterly periods. If Colonial BancGroup does defer interest payments, the trust will also defer payment of distributions on the preferred and common securities. However, deferred distributions will themselves accrue interest at an annual rate equal to             %, compounded quarterly, to the extent permitted by law.

The Colonial BancGroup, Inc.

Colonial BancGroup, Inc. will:

• issue junior subordinated debentures to the trust; and                                                                                                      

• fully and unconditionally guarantee the payments by the trust in respect of the preferred securities on a subordinated basis based on obligations discussed in this prospectus.

It is anticipated that the preferred securities will be approved for listing on the New York Stock Exchange, subject to official notice of issuance, under the symbol “CNB PrB.” Trading of the preferred securities is expected to commence within 30 days after the preferred securities are first issued.

Investing in the preferred securities involves risks which are described in the “ Risk Factors” section beginning on page 7.

None of the securities offered hereby are deposits or insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Preferred Security		Total
Public offering price(1)	$	25.00	$	100,000,000
Underwriting commission to be paid by Colonial BancGroup.	$		$
Proceeds to the trust	$	25.00	$	100,000,000

(1) Plus accumulated distributions from September             , 2003, if settlement occurs after that date.

The preferred securities will be ready for delivery in book-entry only form through The Depository Trust Company on or about September             , 2003.

LEHMAN BROTHERS	STIFEL, NICOLAUS & COMPANY
	INCORPORATED

MORGAN KEEGAN & COMPANY, INC.

                SANDLER O’NEILL & PARTNERS, L.P.

STERNE, AGEE AND LEACH, INC.

The date of this prospectus is September             , 2003

TABLE OF CONTENTS

	Page
Where You Can Find More Information	1
A Warning About Forward-looking Statements	2
Summary Information—Q&A	3
Risk Factors	7
The Colonial BancGroup, Inc.	11
Colonial Capital Trust IV	11
Use of Proceeds	13
Accounting Treatment	13
Regulation and Supervision	13
Consolidated Ratios of Earnings to Fixed Charges	15
Capitalization	16
The Colonial BancGroup, Inc. Selected Consolidated Financial Data	17

	Page
Description of the Preferred Securities	19
Description of the Junior Subordinated Debentures	30
Description of the Preferred Securities Guarantee	40
Effect of Obligations under the Preferred Securities, the Guarantee and the Junior Subordinated Debentures	43
United States Federal Income Taxation	44
ERISA Considerations	48
Underwriting	50
Legal Matters	52
Experts	52

You should rely only on the information contained or incorporated by reference in this document or that Colonial BancGroup or the trust has referred you to. Neither Colonial BancGroup nor the trust has authorized anyone to provide you with different or additional information. If anyone does provide you with different or additional information, you should not rely on it.

The trust may sell the             % Preferred Securities, the “preferred securities,” after the date of this prospectus, and this prospectus may be delivered to you after the date of this prospectus. However, you should realize that the business, prospects, condition and operations of Colonial BancGroup and/or the trust may have changed since the date of this prospectus. This prospectus will not reflect those changes.

You should not consider this prospectus to be an offer or solicitation relating to the preferred securities in any jurisdiction in which such an offer or solicitation is not authorized. Furthermore, you should not consider this prospectus to be an offer or solicitation relating to the preferred securities if the person making the offer or solicitation is not qualified to do so, or if it is unlawful for you to receive such an offer or solicitation.

Unless otherwise indicated or unless the context requires otherwise, all references in this prospectus to “Colonial BancGroup,” “we,” “us,” “our” or similar references mean The Colonial BancGroup, Inc. and its subsidiaries and references to “Colonial Capital Trust IV” and the “trust” are to Colonial Capital Trust IV.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission, the “SEC,” a registration statement under the Securities Act of 1933 that registers the offer and sale of the securities offered by this prospectus. The registration statement, including the attached exhibits and schedules, contains additional relevant information about us. The rules and regulations of the SEC allow us to omit certain information included in the registration statement from this prospectus.

In addition, we file reports, proxy statements and other information with the SEC under the Securities Exchange Act of 1934. You may read and copy this information at the following locations of the SEC:

Public Reference Room

450 Fifth Street, N.W.

Room 1024

Washington, D.C. 20549

Northeast Regional Office

233 Broadway

New York, New York 10007

Midwest Regional Office

500 West Madison Street

Suite 1400

Chicago, Illinois 60661-2511

You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC also maintains an internet world wide web site that contains reports, proxy statements and other information about issuers, like us, who file electronically with the SEC. The address of that site is http://www.sec.gov.

You can also inspect reports, proxy statements and other information about us at the offices of the New York Stock Exchange, the “NYSE,” 20 Broad Street, New York, New York 10005.

The SEC allows us to “incorporate by reference” information that we file with the SEC into this prospectus. This means that we can disclose important information to you by referring you to another document filed separately with the SEC prior to the completion of the offering of securities described in this prospectus. The information incorporated by reference is considered to be a part of this prospectus. Any information that is included directly in this prospectus or in a document incorporated into this prospectus by reference that is modified or superseded by information that is included directly in this prospectus or in a more recent incorporated document shall not be considered to be a part of this prospectus except as so modified or superseded.

We incorporate by reference into this prospectus our Annual Report on Form 10-K for the year ended December 31, 2002 that we filed with the SEC on March 10, 2003, our Proxy Statement for our 2003 Annual Meeting that we filed with the SEC on March 10, 2003 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003 that we filed with the SEC on May 15, 2003 and August 7, 2003, respectively.

We also incorporate by reference into this prospectus future documents we file with the SEC prior to the completion of the offering of securities described in this prospectus. These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements, required to be filed under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934.

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We have not included separate financial statements of Colonial Capital Trust IV in this prospectus. Colonial BancGroup does not believe that holders of the preferred securities would find these financial statements helpful for the following reasons:

• all of the voting securities of the trust will be owned, directly or indirectly, by Colonial BancGroup, a reporting company under the Securities Exchange Act of 1934;

• Colonial Capital Trust IV has no independent assets, operations, revenues or cash flows and exists for the sole purpose of issuing the preferred and common securities, investing the proceeds in junior subordinated debentures issued by Colonial BancGroup, distributing the cash payments received on the junior subordinated debentures to the holders of the preferred and common securities, and engaging in other activities necessary or incidental to these activities;

• Colonial BancGroup’s obligations described in this prospectus constitute a full and unconditional guarantee of payments due on the preferred securities; and

• under current SEC regulations, Colonial Capital Trust IV does not and will not file reports with the SEC.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this prospectus and in our documents incorporated by reference into this prospectus. When we use words such as “anticipate,” “believe,” “estimate,” “may,” “intend,” “expect,” “will,” “should,” “seeks” or other similar expressions we refer to events or conditions subject to risks and uncertainties. When considering those forward-looking statements, you should keep in mind the risks, uncertainties and other cautionary statements made or incorporated by reference in this prospectus. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. In addition to the risks identified below, you should refer to our public incorporated documents for specific risks which could cause actual results to be significantly different from those expressed or implied by those forward-looking statements. Some factors which may affect the accuracy of the forward-looking statements apply generally to the financial services industry, while other factors apply directly to us. Any number of important factors which could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to:

• deposit attrition, customer loss, or revenue loss in the ordinary course of business;

• increases in competitive pressure in the banking industry;

• changes in the interest rate environment which reduce margins;

• general economic conditions, either nationally or regionally, that are less favorable than expected, resulting in, among other things, a deterioration in credit quality;

• changes which may occur in the regulatory environment;

• a significant rate of inflation or deflation;

• acts of terrorism, such as the events of September 11, 2001, and war; or

• changes in the capital markets.

Many of these factors are beyond our control. For a discussion of factors that could cause our actual results to differ, please see the discussions in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2002 filed on March 10, 2003, and in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2003 and June 30, 2003, which we filed with the SEC on May 15, 2003 and August 7, 2003, respectively.

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SUMMARY INFORMATION—Q&A

The following information supplements, and should be read together with, the information contained in other parts of this prospectus. This summary highlights selected information from this prospectus to help you understand the preferred securities. You should carefully read this prospectus to understand fully the terms of the preferred securities, as well as the tax and other considerations that are important to you in making a decision about whether to invest in the preferred securities. You should pay special attention to the “Risk Factors” section beginning on page 7 to determine whether an investment in the preferred securities is appropriate for you.

For your convenience, we make reference to specific page numbers in this prospectus for more detailed information on some of the terms and concepts used throughout this prospectus.

What are the preferred securities?

Each preferred security represents an undivided beneficial interest in the assets of Colonial Capital Trust IV. Each preferred security will entitle the holder to receive quarterly cash distributions as described in this prospectus. The underwriters are offering preferred securities at a price of $25 for each preferred security.

Who is Colonial Capital Trust IV?

Colonial Capital Trust IV is a Delaware statutory trust. Colonial Capital Trust IV will sell its preferred securities to the public and its common securities to Colonial BancGroup. The preferred securities and the common securities together are referred to in this prospectus as the “trust securities.” Colonial Capital Trust IV will use the proceeds from these sales to buy a series of junior subordinated debentures, the “junior subordinated debentures,” from Colonial BancGroup with financial terms that match the terms of the trust securities. Colonial BancGroup will, on a subordinated basis, fully and unconditionally guarantee the payment by Colonial Capital Trust IV in respect of the preferred securities.

There are five trustees of Colonial Capital Trust IV.

Three of the Colonial Capital Trust IV trustees are officers of Colonial BancGroup, the “regular trustees.” The Bank of New York will act as the institutional trustee of Colonial Capital Trust IV and one of its affiliates will act as the Delaware trustee.

Who is Colonial BancGroup?

Colonial BancGroup is a financial holding company whose wholly-owned subsidiary, Colonial Bank, N.A., provides corporate and retail banking services and products in Alabama, Florida, Georgia, Tennessee, Texas and Nevada. As of June 30, 2003, Colonial BancGroup’s total assets were approximately $16.2 billion, total loans were approximately $11.8 billion, total deposits were approximately $9.1 billion and total shareholders’ equity was approximately $1.1 billion.

Colonial BancGroup’s principal office is located at One Commerce Street, Montgomery, Alabama 36104, telephone number (334) 240-5000.

When will you receive quarterly distributions?

If you purchase the preferred securities, you are entitled to receive cumulative cash distributions at an annual rate of             % of the liquidation amount of $25 per preferred security. Distributions will accumulate

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from the date Colonial Capital Trust IV issues the preferred securities and will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, beginning January 1, 2004, unless they are deferred as described below.

When can payment of your distributions be deferred?

Colonial BancGroup is permitted, on one or more occasions, to defer interest payments on the junior subordinated debentures for a period, an “extension period,” up to 20 consecutive quarterly periods unless an event of default under the indenture has occurred and is continuing (see page 32). A deferral of interest payments cannot extend, however, beyond the “stated maturity date” of the junior subordinated debentures, which is October 1, 2033, or any earlier redemption date.

If Colonial BancGroup defers interest payments on the junior subordinated debentures, Colonial Capital Trust IV will also defer distributions on the preferred securities. During this deferral period, distributions will continue to accrue on the preferred securities at an annual rate of             % of the liquidation amount of $25 per preferred security. Also, the deferred distributions will themselves accrue interest (to the extent permitted by law) at an annual rate of             %, compounded quarterly. Once Colonial BancGroup makes all interest payments on the junior subordinated debentures, with accrued interest, it can again postpone interest payments on the junior subordinated debentures for up to 20 consecutive quarterly periods if no event of default under the indenture has occurred and is continuing.

During any period in which Colonial BancGroup defers interest payments on the junior subordinated debentures, Colonial BancGroup will not be permitted to:

• declare or pay a dividend or make any other payment or distribution on its capital stock;

• redeem, purchase, acquire or make a liquidation payment on any of its capital stock;

• make an interest, principal or premium payment on, or repurchase, repay or redeem, any of its debt securities that rank equally with or junior to the junior subordinated debentures; or

• make any guarantee payments relating to any of the above (other than the guarantee).

There are limited exceptions to these restrictions which are described beginning on page 32.

If Colonial BancGroup defers the payment of interest on the junior subordinated debentures, the preferred securities will be treated as being issued with an original issue discount for United States federal income tax purposes. This means that, beginning at the time of deferral, you will be required to recognize interest income with respect to distributions (including deferred distributions) and to include those amounts in your gross income for United States federal income tax purposes before you receive any cash distributions relating to those interest payments. See “United States Federal Income Taxation” beginning on page 44.

When can Colonial Capital Trust IV redeem the preferred securities?

Colonial Capital Trust IV will redeem all of the outstanding preferred securities when the junior subordinated debentures are paid at maturity on October 1, 2033. In addition, if Colonial BancGroup redeems any junior subordinated debentures before their maturity, Colonial Capital Trust IV will redeem, on a pro rata basis, preferred and common securities having an aggregate liquidation amount equal to the aggregate principal amount of the junior subordinated debentures so redeemed. The redemption price for each preferred security will be $25 plus unpaid distributions accrued to the date of redemption.

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Colonial BancGroup is permitted to redeem some or all of the junior subordinated debentures before their maturity at 100% of their principal amount plus unpaid interest accrued to the date of redemption:

• in whole or in part, on one or more occasions any time on or after October 1, 2008; and

• in whole any time before October 1, 2008, if specified changes in bank regulatory, investment company or tax laws occur (each of which is a special event, as defined under “Description of the Junior Subordinated Debentures—Optional Redemption” beginning on page 35, and each of which is more fully described beginning on page 35). One of these potential changes includes a potential change in Federal Reserve Board guidelines that could be adopted in light of recent accounting changes affecting the consolidation of variable interest entities and the financial reporting treatment of trust preferred securities. This potential change could prevent Colonial BancGroup from treating an amount equal to the liquidation amount of the preferred securities as “Tier 1” regulatory capital for purposes of the applicable Federal Reserve Board capital adequacy guidelines.

Any redemption of the junior subordinated debentures by Colonial BancGroup may require approval of the Federal Reserve Board.

What is Colonial BancGroup’s guarantee of the preferred securities?

Colonial BancGroup will fully and unconditionally guarantee the preferred securities based on:

• its obligations under the guarantee, the “guarantee,” which covers payments made by Colonial BancGroup to the institutional trustee;

• its obligations under the declaration of trust which governs the terms of the preferred securities; and

• its obligations under the indenture which governs the terms of the junior subordinated debentures.

If Colonial BancGroup does not make a payment on the junior subordinated debentures, Colonial Capital Trust IV will not have sufficient funds to make the related payments on the preferred securities. The guarantee does not cover payments when Colonial Capital Trust IV does not have sufficient funds to make payments on the preferred securities. See “Risk Factors—Colonial BancGroup’s obligations under the junior subordinated debentures and the guarantee are subordinated” on page 7 for a discussion of the ranking of Colonial BancGroup’s obligations referred to above.

When could the junior subordinated debentures be distributed to you?

Colonial BancGroup has the right to dissolve Colonial Capital Trust IV at any time if it receives an opinion of counsel that the resulting liquidation and distribution of the junior subordinated debentures would not result in a taxable event to holders of the preferred securities. If Colonial BancGroup decides to exercise its right to dissolve Colonial Capital Trust IV, Colonial Capital Trust IV will redeem the preferred securities by distributing the junior subordinated debentures to holders of the preferred and common securities on a pro rata basis.

Any distribution of the junior subordinated debentures may require approval of the Federal Reserve Board.

What happens if Colonial Capital Trust IV is dissolved and the junior subordinated debentures are not distributed?

Colonial Capital Trust IV may also be dissolved in circumstances where the junior subordinated debentures are not distributed. In those situations, Colonial Capital Trust IV will pay the liquidation amount of $25 for each preferred security plus unpaid distributions accrued to the date the payment is made. Colonial Capital Trust IV will be able to make this distribution of cash only if the junior subordinated debentures are redeemed by Colonial BancGroup.

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Will the preferred securities be listed on a stock exchange?

It is anticipated that the preferred securities will be approved for listing on the NYSE, subject to official notice of issuance under the symbol “CNB PrB.” Trading is expected to commence within 30 days after the preferred securities are first issued. You should be aware that the listing of the preferred securities will not necessarily ensure that a trading market for the preferred securities will develop or be maintained or that a liquid trading market will be available for the preferred securities at the time you may wish to sell your preferred securities, or at all. If Colonial Capital Trust IV distributes the junior subordinated debentures, Colonial BancGroup will use its best efforts to list the junior subordinated debentures on the NYSE or any other exchange or other organization on which the preferred securities are then listed.

In what form will the preferred securities be issued?

The preferred securities will be represented by one or more global certificates that will be deposited with, and registered in the name of, The Depository Trust Company, New York, New York, “DTC,” or its nominee. This means that generally you will not receive a certificate for your preferred securities and preferred securities will not be registered in your name. See “Description of the Preferred Securities—Book-Entry Only Issuance—The Depository Trust Company” beginning on page 27. Colonial Capital Trust IV expects that the preferred securities will be ready for delivery in book-entry only form through DTC on or about September             , 2003.

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RISK FACTORS

Your investment in the preferred securities will involve some risks. You should carefully consider the following discussion of risks, and the other information in this prospectus, before deciding whether an investment in the preferred securities is suitable for you.

Colonial BancGroup’s obligations under the junior subordinated debentures and the guarantee are subordinated

Colonial BancGroup’s obligations under the junior subordinated debentures are unsecured and rank:

• junior to all “senior indebtedness,” as defined under “Description of the Junior Subordinated Debentures—Subordination” on page 33;

• equally with any other subordinated debt securities issued in the future with respect to securities of other trusts sponsored by Colonial BancGroup; and

• senior to Colonial BancGroup’s capital stock.

Colonial BancGroup cannot make any payments of principal, including redemption payments, or interest on the junior subordinated debentures, nor is it entitled to redeem, retire, purchase or otherwise acquire the junior subordinated indentures, if (1) it is in default on its senior indebtedness or (2) an event of default under its senior indebtedness has occurred (or would occur as a result of any such action) permitting holders thereof to accelerate the maturity of such senior indebtedness. Finally, upon the bankruptcy, liquidation or reorganization of Colonial BancGroup, its assets would be available to pay obligations under the junior subordinated debentures only after all payments have been made on its senior indebtedness.

As of June 30, 2003, senior indebtedness of Colonial BancGroup (holding company only) aggregated approximately $14.1 million. In addition, because Colonial BancGroup is a financial holding company, the junior subordinated debentures are effectively subordinated to all existing and future liabilities and preferred equity of Colonial BancGroup’s subsidiaries, including depositors, which, as of June 30, 2003, aggregated approximately $14.7 billion.

Colonial BancGroup’s obligations under the guarantee are unsecured and rank:

• junior to all of Colonial BancGroup’s other liabilities, except those liabilities made equal with or junior to the guarantee by their terms;

• equally with all of Colonial BancGroup’s senior most preferred and preference stock now or in the future issued by it, and with any guarantee now or in the future issued by it in respect of any preferred or preference stock of any of its affiliates; and

• senior to Colonial BancGroup’s common stock.

This means that Colonial BancGroup cannot make any payments on the guarantee if it defaults on a payment of any of its other liabilities or if an event of default in respect of its other liabilities has occurred (or would occur as a result of any such action) permitting acceleration of the maturity of those liabilities, except, in each case, those liabilities made equal with or junior to the guarantee by their terms. In addition, upon the bankruptcy, liquidation or reorganization of Colonial BancGroup, its assets would be available to pay obligations under the guarantee only after all payments had been made on its other liabilities, except those liabilities made equal with or junior to the guarantee by their terms.

The preferred securities, the guarantee and the junior subordinated debentures do not limit the ability of Colonial BancGroup or its subsidiaries to incur additional indebtedness, including secured indebtedness and other indebtedness that ranks senior in priority of payment to the junior subordinated debentures and the guarantee.

For more information please refer to “Description of the Junior Subordinated Debentures—Subordination” beginning on page 33 and “Description of the Preferred Securities Guarantee” beginning on page 40.

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Because Colonial BancGroup is a bank holding company, it may have limited sources of funds

Because Colonial BancGroup is a bank holding company, its operations are conducted by its subsidiaries, primarily Colonial Bank, N.A., which is subject to significant Federal regulation. As a result, Colonial BancGroup’s ability to receive dividends and loans from its subsidiaries is restricted. At June 30, 2003, $320 million of the retained earnings of Colonial Bank, N.A. were available to pay dividends to Colonial BancGroup, without regulatory approval. Dividend payments by Colonial Bank, N.A. to Colonial BancGroup in the future will require generation of future earnings by Colonial Bank, N.A. and may require regulatory approval. See “Regulation and Supervision” on page 13.

If Colonial BancGroup does not receive sufficient cash dividends from its subsidiaries, it is unlikely Colonial BancGroup will have sufficient funds to make payments on the junior subordinated debentures and the guarantee, thereby leaving insufficient funds for the trust to make payments to holders of the preferred securities.

Colonial BancGroup’s right to participate in the assets of any bank subsidiary upon its liquidation, reorganization or otherwise, and the resulting ability of the holders of the preferred securities to benefit indirectly from any participation, will be subject to the claims of such bank subsidiary’s creditors and preferred equity holders, if any, which will take priority except to the extent to which Colonial BancGroup is recognized as a creditor with a reorganized claim. Accordingly, the junior subordinated debentures will be effectively subordinated to all existing and future liabilities and preferred equity, if any, of our subsidiaries, including the deposit liabilities of Colonial Bank, N.A., and you should look only to Colonial BancGroup’s assets for payments on the junior subordinated debentures. As of June 30, 2003, Colonial BancGroup’s subsidiaries had deposits and other liabilities and preferred equity, if any, of approximately $14.7 billion.

If Colonial BancGroup does not make payments on the junior subordinated debentures, Colonial Capital Trust IV will not have cash available to make the related payments on the preferred securities

The ability of Colonial Capital Trust IV to pay distributions on the preferred securities, the redemption price of the preferred securities and the liquidation amount of the preferred securities is solely dependent upon Colonial BancGroup making the related payments on the junior subordinated debentures when due.

If Colonial BancGroup defaults on its obligation to pay principal of or interest on the junior subordinated debentures, Colonial Capital Trust IV will not have sufficient funds to pay distributions, the redemption price or the liquidation amount of each preferred security. In those circumstances, you will not be able to rely upon the guarantee for payment of these amounts because the guarantee applies only if Colonial Capital Trust IV has sufficient funds to make such payments.

Instead, you:

• may directly sue Colonial BancGroup or seek other remedies to collect your pro rata share of payments owed; or

• rely on the institutional trustee to enforce Colonial Capital Trust IV’s rights under the junior subordinated debentures.

Colonial Capital Trust IV can defer distributions on the preferred securities which will cause cash payments to cease and have federal income tax consequences for you and may adversely affect the trading price of the preferred securities

If no event of default under the indenture has occurred and is continuing, Colonial BancGroup is permitted, on one or more occasions, to defer interest payments on the junior subordinated debentures for up to 20 consecutive quarterly periods. If Colonial BancGroup defers interest payments on the junior subordinated debentures, Colonial Capital Trust IV will defer distributions on the preferred securities during any extension period. However, distributions would still accumulate and those deferred distributions will themselves accrue interest at an annual rate of             %, compounded quarterly, to the extent permitted by law.

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If Colonial BancGroup defers the payment of interest on the junior subordinated debentures, you will be required to recognize interest income for United States federal income tax purposes in respect of your pro rata share of the interest on the junior subordinated debentures held by Colonial Capital Trust IV before you receive any cash distributions relating to those interest payments. In addition, if you sell the preferred securities before the end of any deferral period or before the record date relating to distributions which are paid, you will not receive the cash distributions relating to any accrued and unpaid interest even though you will be required to recognize that interest in income for United States federal income tax purposes.

Colonial BancGroup has no current intention of deferring interest payments on the junior subordinated debentures. However, if Colonial BancGroup exercises its right in the future, the preferred securities may trade at a price that does not fully reflect the value of accrued but unpaid interest on the junior subordinated debentures. If you sell the preferred securities during any extension period, you may not receive the same return on your investment as someone who continues to hold the preferred securities. In addition, the existence of Colonial BancGroup’s right to defer payments of interest on the junior subordinated debentures may mean that the market price for the preferred securities, which represent an undivided beneficial interest in the junior subordinated debentures, may be more volatile than other securities that do not have these rights.

See “United States Federal Income Taxation” beginning on page 44 for more information regarding the United States federal income tax consequences of purchasing, holding and selling the preferred securities.

Preferred securities may be redeemed before October 1, 2008 if a special event occurs or on and after that date at the option of Colonial BancGroup

If a special event occurs and is continuing before October 1, 2008, Colonial BancGroup has the right to redeem all of the junior subordinated debentures. Even if a special event does not occur before October 1, 2008, Colonial BancGroup has the right to redeem the junior subordinated debentures in whole or in part on or after October 1, 2008. If any such redemption occurs or Colonial BancGroup pays amounts due and owing on the junior subordinated debentures at maturity on October 1, 2033, Colonial Capital Trust IV will use the cash it receives on the redemption of the junior subordinated debentures to redeem the preferred and common securities (on a pro rata basis if Colonial Capital Trust IV does not receive enough cash to redeem all of the preferred and common securities). The redemption price would be $25 per preferred security plus unpaid distributions to the date of redemption. The redemption of the preferred securities will be a taxable event to you for U.S. federal income tax purposes.

Please see “Description of the Preferred Securities—Redemption” for more information.

Recent accounting changes may give rise to a future regulatory capital treatment event that would entitle us to redeem the trust preferred securities and may also reduce our consolidated capital ratios.

In January 2003, the Financial Accounting Standards Board (the “FASB”) issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”), that addresses the consolidation rules to be applied to “variable interest entities.” FIN 46 has raised questions about whether variable interest entities similar to Colonial Capital Trust IV should be treated as consolidated subsidiaries of the companies that use them to issue trust preferred securities. The FASB also recently issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“FAS 150”), which provides accounting guidance for the appropriate financial reporting balance sheet classification of trust preferred securities. Traditionally, issuer trusts used for issuing trust preferred securities have been consolidated by their parent companies and trust preferred securities have been treated as eligible for “Tier 1” regulatory capital treatment by bank holding companies under Federal Reserve Board rules and regulations. Accordingly, Colonial BancGroup has consolidated its existing issuer trusts in preparing its consolidated financial statements in the past and its outstanding trust preferred securities have been treated as Tier 1 regulatory capital by Colonial BancGroup. Further, Colonial BancGroup has classified its existing outstanding trust preferred securities as liabilities on its consolidated balance sheet in the past.

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If we conclude, in light of an interpretation of FIN 46 as applied to our issuer trusts, that our issuer trusts should no longer be consolidated by us in preparing our financial statements in accordance with generally accepted accounting principles, then we would be required to make certain adjustments to our financial statements during the third quarter of 2003 to reflect the deconsolidation. Moreover, if deconsolidation is required under FIN 46 (or FAS 150 is construed as requiring a general change in the financial reporting classification of trust preferred securities), there could be a change to the regulatory capital treatment of trust preferred securities issued by U.S. bank holding companies. Specifically, it is possible that the Federal Reserve Board may conclude that trust preferred securities should no longer be treated as Tier 1 regulatory capital. If Tier 1 treatment were disallowed, then:

• we would be able to redeem the preferred securities (and any other outstanding trust preferred securities we may have outstanding at that time) pursuant to the special “regulatory capital event” redemption described just above and, in more detail, elsewhere is this prospectus, and

• there would be a reduction in Colonial BancGroup’s consolidated capital ratios. This possible reduction of Colonial BancGroup’s capital ratios is more fully discussed under “Accounting Treatment” on page 13.

Please see “Description of the Preferred Securities—Redemption” beginning on page 21 and “Description of the Junior Subordinated Debentures—Optional Redemption” beginning on page 35 for more information.

Distribution of junior subordinated debentures may have a negative effect on trading price

Colonial BancGroup has the right to dissolve Colonial Capital Trust IV at any time if it receives an opinion of counsel that the resulting liquidation and distribution of the junior subordinated debentures would not result in a taxable event to holders of the preferred securities. If Colonial BancGroup decides to exercise its right to dissolve Colonial Capital Trust IV, Colonial Capital Trust IV will redeem the preferred and common securities by distributing the junior subordinated debentures to holders of the preferred and common securities on a pro rata basis. Any distribution of the junior subordinated debentures may require approval of the Federal Reserve Board.

If, despite the delivery of an opinion of counsel that the dissolution, resulting liquidation and distribution of junior subordinated debentures would not result in a taxable event to holders of the preferred securities, Colonial Capital Trust IV is ultimately characterized for United States federal income tax purposes as an association taxable as a corporation at the time of its dissolution and liquidation, the distribution of junior subordinated debentures would be a taxable event to holders of the preferred securities.

Colonial BancGroup has no current intention of causing the dissolution of Colonial Capital Trust IV and the distribution of the junior subordinated debentures. Colonial BancGroup anticipates that it would consider exercising this right in the event that expenses associated with maintaining Colonial Capital Trust IV were substantially greater than currently expected, such as if a special event occurred. Colonial BancGroup cannot predict the other circumstances under which this right would be exercised.

Colonial BancGroup cannot predict the market prices for the junior subordinated debentures that may be distributed. Accordingly, the junior subordinated debentures that you receive on a distribution, or the preferred securities you hold pending such a distribution, may trade at a discount to the price that you paid to purchase the preferred securities.

Because you may receive junior subordinated debentures, you should make an investment decision with regard to the junior subordinated debentures, as well as the preferred securities. You should carefully review all the information regarding the junior subordinated debentures contained in this prospectus.

You will have limited voting rights as a holder of preferred securities

You will have limited voting rights. In particular, you may not elect or remove any trustees, except when there is an event of default under the indenture. If such an event of default occurs, a majority in liquidation

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amount of the holders of the preferred securities will be entitled to remove and appoint the institutional trustee and the Delaware trustee.

See “Colonial Capital Trust IV” on page 11 and “Description of the Preferred Securities—Voting Rights” beginning on page 24.

Trading price of the preferred securities may not reflect the value of accrued but unpaid interest

If you use the accrual method of accounting for tax purposes and dispose of your preferred securities between quarterly distributions, you will be required to:

• include accrued but unpaid interest as ordinary income for United States federal tax purposes; and

• add the accrued but unpaid income to your adjusted tax basis in the preferred securities disposed of.

If you sell the preferred securities for less than your adjusted tax basis in the preferred securities, you will recognize a capital loss which, subject to certain limited exceptions, generally may not be used to offset ordinary income for United States federal income tax purposes. See “United States Federal Income Taxation” beginning on page 47.

There is not an established trading market for the preferred securities

The preferred securities are a new issue of securities. As a result, prior to this offering, there was no public market for the preferred securities. It is anticipated that the preferred securities will be approved for listing on the NYSE, subject to official notice of issuance. Trading of the preferred securities on the NYSE is expected to commence within a 30-day period after the initial delivery of the preferred securities. In addition, the underwriters have advised Colonial BancGroup and Colonial Capital Trust IV that they intend to make a market in the preferred securities prior to commencement of trading on the NYSE, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the existence or liquidity of any trading market for the preferred securities.

No protection in highly leveraged transactions

Under the indenture which governs the terms of the junior subordinated debentures, you will not be protected from a highly leveraged transaction, including a change of control involving Colonial BancGroup, or other similar transaction. Such a transaction may materially and adversely affect Colonial BancGroup’s creditors, including holders of the preferred securities indirectly.

THE COLONIAL BANCGROUP, INC.

The Colonial BancGroup, Inc. is an Alabama-based bank holding company and financial holding company which conducts, through its wholly-owned banking subsidiary, Colonial Bank, N.A., a general commercial banking business through 273 branches in Alabama, Florida, Georgia, Nevada, Tennessee and Texas. Colonial Bank, N.A. provides corporate and retail banking products and services, including cash management, electronic banking, mortgage banking and wealth management services. Colonial BancGroup also offers retail and discount brokerage services through our broker-dealer, Colonial Brokerage Inc. At June 30, 2003 Colonial BancGroup had total assets of $16.2 billion, total loans of $11.8 billion, total deposits of $9.1 billion and total stockholders’ equity of $1.1 billion.

COLONIAL CAPITAL TRUST IV

Colonial Capital Trust IV is a statutory trust created under Delaware law pursuant to:

• a declaration of trust, dated as of August 22, 2003, executed by Colonial BancGroup, as sponsor, and certain of the trustees of Colonial Capital Trust IV; and

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• the filing of a certificate of trust with the Secretary of State of the State of Delaware on August 22, 2003.

The declaration will be amended and restated in its entirety, as so amended and restated, the “declaration,” substantially in the form filed as an exhibit to the registration statement which contains this prospectus. The declaration will be qualified as an indenture under the Trust Indenture Act of 1939, as amended, the “Trust Indenture Act.”

Colonial Capital Trust IV exists for the exclusive purposes of:

(1) issuing and selling the trust securities representing undivided beneficial interests in the assets of Colonial Capital Trust IV;

(2) investing the gross proceeds of the trust securities in the junior subordinated debentures;

(3) making distributions; and

(4) engaging only in other necessary or incidental activities.

The junior subordinated debentures will be the sole assets of Colonial Capital Trust IV.

Prior to the issuance of the preferred securities, Colonial BancGroup will directly or indirectly acquire common securities in an aggregate liquidation amount equal to at least 3% of the total capital of Colonial Capital Trust IV. Upon issuance of the preferred securities, the purchasers will own all of the preferred securities.

Pursuant to the declaration, the number of Colonial Capital Trust IV trustees will initially be five. Colonial BancGroup, as the direct or indirect holder of all the common securities, will have the right to appoint, remove or replace any Colonial Capital Trust IV trustee and to increase or decrease the number of Colonial Capital Trust IV trustees, unless an event of default under the indenture occurs. In that case, the holders of a majority in liquidation amount of the preferred securities will have the right to remove and appoint the institutional trustee and the Delaware trustee. There will be three regular trustees of Colonial Capital Trust IV, each of whom will be an employee or officer of, or who is affiliated with, Colonial BancGroup. The fourth trustee will be a financial institution that is unaffiliated with Colonial BancGroup which will serve as institutional trustee under the declaration for the purposes of compliance with the provisions of the Trust Indenture Act, the “institutional trustee.” Initially, The Bank of New York will be the institutional trustee until removed or replaced by the holder of the common securities. For purposes of compliance with the provisions of the Trust Indenture Act, The Bank of New York will act as trustee under the guarantee, the “guarantee trustee,” and as trustee under the indenture which governs the junior subordinated debentures, the “debt trustee.” The fifth trustee will be an entity that maintains its principal place of business in the state of Delaware. Initially, The Bank of New York (Delaware), an affiliate of the institutional trustee, will act as “Delaware trustee.”

The institutional trustee will hold title to the junior subordinated debentures for the benefit of the holders of the trust securities and will have the power to exercise all rights, powers and privileges under the indenture as the holder of the junior subordinated debentures. In addition, the institutional trustee will maintain exclusive control of a segregated non-interest bearing bank account to hold all payments made in respect of the junior subordinated debentures for the benefit of the holders of the trust securities. The institutional trustee will make payments of distributions and payments on liquidation, redemption and otherwise to the holders of the trust securities out of funds from that account.

The guarantee trustee will hold the guarantee for the benefit of the holders of the preferred securities.

Colonial BancGroup will pay all fees and expenses related to Colonial Capital Trust IV and the offering of the trust securities, other than the trust securities themselves. See “Description of the Junior Subordinated Debentures—Miscellaneous” on page 40.

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USE OF PROCEEDS

Colonial Capital Trust IV will use the proceeds of the issuance and sale of the trust securities to acquire junior subordinated debentures from Colonial BancGroup. Colonial BancGroup intends to use the net proceeds from the sale of the junior subordinated debentures, which are estimated to be $            , after payment by Colonial BancGroup of the underwriting commissions and expenses relating to the offering, for general corporate purposes, including the possible financing of one or more future business acquisitions.

ACCOUNTING TREATMENT

As discussed above under “Risk Factors—Recent accounting changes may give rise to a future regulatory capital treatment event that would entitle us to redeem the preferred securities and may also reduce our consolidated capital ratios,” FIN 46 has raised questions about whether variable interest entities similar to Colonial Capital Trust IV should be treated as consolidated subsidiaries of the companies that use them to issue trust preferred securities. In addition, FAS 150 provides accounting guidance for the appropriate financial reporting balance sheet classification of trust preferred securities. Traditionally, issuer trusts used for issuing trust preferred securities have been consolidated by their parent companies. Accordingly, we have consolidated our issuer trusts in preparing our consolidated financial statements in the past and our previously issued trust preferred securities have been treated as “Tier 1” regulatory capital for bank regulatory purposes by us. Further, we have classified our existing outstanding trust preferred securities as liabilities on our consolidated balance sheet in the past and we believe this classification is consistent with new FAS 150.

If we conclude in light of an interpretation of FIN 46 as applied to our issuer trusts that our issuer trusts should no longer be consolidated by us, then we would be required to make certain adjustments to our financial statements during the third quarter of 2003 to reflect the deconsolidation. We do not believe that such adjustments would have a material effect on our financial position or results of operations as presented in our consolidated financial statements.

In addition, if deconsolidation is required under FIN 46 (or FAS 150 is construed as requiring a general change in the financial reporting classification of trust preferred securities), there could be a change to the regulatory capital treatment of trust preferred securities issued by U.S. bank holding companies. Specifically, it is possible that the Federal Reserve Board may conclude that trust preferred securities are no longer to be treated as Tier 1 regulatory capital. If Tier 1 treatment were disallowed, then there would be a reduction in Colonial BancGroup’s consolidated Tier 1 capital.

As of June 30, 2003, on a pro forma basis, after giving effect to this offering of the preferred securities, we will have approximately $278 million in outstanding preferred securities that we plan to treat as Tier 1 regulatory capital for bank regulatory purposes. If all the outstanding preferred securities issued by Colonial BancGroup were not treated as Tier 1 regulatory capital at that time, including those offered hereby, our Tier 1 capital ratio would decline from 8.84% to 6.64%, our risk adjusted total capital ratio would decline from 11.96% to 9.77%, and our leverage ratio would decline from 7.19% to 5.4%, each on a pro forma basis using figures reported as of June 30, 2003. These reduced pro forma capital ratios would continue to meet the applicable Federal Reserve Board requirements for “well capitalized” status except for the risk adjusted total capital ratio. In any event, it is anticipated that Colonial Bank, N.A. will continue to remain “well capitalized.” See “Capitalization” in this prospectus.

REGULATION AND SUPERVISION

As a financial holding company, Colonial BancGroup is subject to inspection, examination and supervision by the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. Our banking

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subsidiary, Colonial Bank, N.A., is subject to extensive supervision, examination and regulation by the Office of the Comptroller of the Currency (the “OCC”). Because we are a holding company, our rights and the rights of our creditors, including the holders of our debt securities, to participate in the assets of any of our subsidiaries upon the subsidiary’s liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors except to the extent that we may ourselves be a creditor with recognized claims against the subsidiary. In addition, there are various statutory and regulatory limitations on the extent to which Colonial Bank, N.A. can finance or otherwise transfer funds to us or to our nonbanking subsidiaries, whether in the form of loans, extensions of credit, investments or asset purchases. These restrictions prevent affiliates of the bank, including us, from borrowing from the bank, unless various types of collateral with prescribed market values secure the loan. Federal law limits the aggregate amount of the bank’s loans to and investments in any one of its affiliates to 10% of the bank’s capital stock and surplus and also limits the aggregate amount of the bank’s loans to and investments in all of its affiliates to 20% of the bank’s capital stock and surplus. Furthermore, loans and extensions of credit are required to be on terms and conditions consistent with safe and sound banking practices.

In addition, there are regulatory limitations on the payment of dividends directly or indirectly to us from Colonial Bank, N.A. Dividends from Colonial Bank, N.A. are the principal source of our cash funds, and there are certain legal restrictions under federal law on the payment of dividends by banks. The OCC also has authority to prohibit Colonial Bank, N.A. from engaging in what, in the opinion of such regulatory body, constitutes an unsafe or unsound banking practice. The payment of dividends could, depending upon the financial condition of Colonial Bank, N.A., be deemed to constitute such an unsafe or unsound practice.

Under the policy of the Federal Reserve Board, we are expected to act as a source of financial strength to our subsidiary bank and to commit resources to support such subsidiary bank in circumstances where we might not do so absent such policy. In addition, any subordinated loans by us to Colonial Bank, N.A. would also be subordinate in right of payment to depositors and obligations to other creditors of Colonial Bank, N.A. Further, the Crime Control Act of 1990 amended the federal bankruptcy laws to provide that, in the event of our bankruptcy, any commitment by us to our regulators to maintain the capital of a banking subsidiary will be assumed by the bankruptcy trustee and entitled to a priority of payment.

For a discussion of the material elements of the regulatory framework applicable to financial holding companies, bank holding companies and their subsidiaries, and specific information relevant to us, refer to our Annual Report on Form 10-K for the year ended December 31, 2002, and any other subsequent reports filed by us with the SEC, which are incorporated by reference in this prospectus. This regulatory framework is intended primarily for the protection of depositors and the deposit insurance funds that insure deposits of banks, rather than for the protection of security holders. A change in the statutes, regulations or regulatory policies applicable to us or our subsidiaries may have a material effect on our business.

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Future Legislation

Changes to the laws and regulations in the states where we and our subsidiaries do business can affect the operating environment of financial holding companies and their subsidiaries in substantial and unpredictable ways. We cannot accurately predict whether those changes in laws and regulations will occur, and, if those changes occur, the ultimate effect they would have upon our or our subsidiaries’ financial condition or results of operations.

CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

The following table sets forth Colonial BancGroup’s consolidated ratio of earnings to fixed charges, calculated excluding and including interest on deposits. The following ratios should be read in conjunction with Colonial BancGroup’s consolidated financial statements, the notes thereto and other financial information included elsewhere or 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.

	Six Months Ended June 30, 2003	Year Ended December 31,
		2002	2001	2000	1999	1998
Excluding interest on deposits	2.52	2.49	2.18	2.16	2.69	2.25
Including interest on deposits	1.75	1.65	1.39	1.36	1.48	1.31

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CAPITALIZATION

The following table sets forth Colonial BancGroup’s capitalization on an actual basis at June 30, 2003 and on an adjusted basis to reflect the application by Colonial BancGroup of the net proceeds expected to be received from the offering of the securities described in this prospectus. You should read the information in the following table in conjunction with Colonial BancGroup’s consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2003.

	As of June 30, 2003
	Actual			As adjusted
	(in thousands)
Short-term borrowings	$	4,018,276		$	4,018,276
Long-term debt:
Subordinated debt		285,543			285,543
Trust preferred securities		201,490			301,490
FHLB borrowings		1,287,008			1,287,008
Total long-term debt		1,774,041			1,874,041
Total debt		5,792,317			5,892,317
Shareholders’ equity:
Common Stock, $2.50 par value; 200,000,000 shares authorized and 124,255,988 issued and outstanding		310,640			310,640
Additional paid in capital		203,840			203,840
Retained earnings		583,944			583,944
Unearned compensation		(2,134	)		(2,134	)
Accumulated other comprehensive income, net of taxes		25,760			25,760
Total shareholders’ equity		1,122,050			1,122,050
Total capitalization	$	6,914,367		$	7,014,367

The capital ratios as of June 30, 2003, on a historical basis and as adjusted for the offering of securities described in this prospectus, were as follows (1):
Tier I leverage	6.50	%	7.19	%
Tier I capital	8.05	%	8.84	%
Total capital	11.17	%	11.96	%

(1) Colonial BancGroup’s “Tier 1 leverage ratio” is the ratio of Tier 1 capital to average total consolidated assets. “Tier 1 capital” is shareholders’ equity, excluding unrealized gain or loss on securities available for sale, less intangibles and 8% of nonbank equity investments, plus trust preferred securities. Average total consolidated assets are the quarterly average total assets (net of the allowance for loan and lease losses and unrealized gain or loss) reported on Colonial BancGroup’s consolidated financial statement (FR Y-9C Report), subject to certain adjustments set forth in FRB guidelines. The “Tier 1 capital ratio” is the ratio of Tier 1 capital to risk adjusted assets, which are total risk-weighted assets as calculated in accordance with FRB guidelines. The “Total capital ratio” is the ratio of total capital (Tier 1 capital plus allowable loan loss reserve, allowable subordinated debt and 45% of net unrealized gains on available for sale equity securities) to risk adjusted assets. Colonial BancGroup’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

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THE COLONIAL BANCGROUP, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

(UNAUDITED)

The following table presents certain consolidated financial data for Colonial BancGroup for the six months ended June 30, 2003 and 2002 and as of and for each of the last five years ended December 31, 2002. The financial data have been derived from Colonial BancGroup’s consolidated financial statements. Certain amounts in prior periods have been reclassified to conform to current year presentation. The consolidated financial data for the six months ended June 30, 2003 or the year ended December 31, 2002 is not necessarily indicative of Colonial BancGroup’s operating results or financial condition to be expected for any future period. You should read the selected consolidated financial data in conjunction with Colonial BancGroup’s consolidated financial statements and notes thereto incorporated by reference in this prospectus.

	As of June 30,				As of December 31,
Statement of Condition Summary	2003		2002		2002			2001			2000			1999		1998
	(Dollars in millions, except per share amounts)
Total assets	$	16,208	$	13,673	$	15,822		$	13,185		$	12,000		$	11,098	$	10,621
Loans		11,769		10,370		11,692			10,368			9,643			8,419		7,235
Deposits		9,141		8,654		9,320			8,323			8,356			8,173		7,586
Long-term debt		1,774		1,872		1,999			1,786			862			911		746
Shareholders’ equity		1,122		961		1,071			865			775			712		654
Book value per share	$	9.03	$	8.13	$	8.66		$	7.50		$	6.93		$	6.26	$	5.82
	Six Months Ended June 30,				Year Ended December 31,
Earnings Summary	2003		2002		2002			2001			2000			1999		1998
	(Dollars in thousands)
Net interest income	$	246,251	$	225,751	$	461,170		$	421,929		$	400,322		$	381,147	$	336,691
Provision for loan losses		18,870		17,974		35,980			39,573			29,775			29,177		27,511
Noninterest income		63,745		46,358		102,332			93,709			77,885			75,341		60,243
Noninterest expense		179,948		146,908		312,779			284,168			258,691			239,915		264,057
Income from continuing operations before tax		111,178		107,227		214,743			191,897			189,741			187,396		105,366
Income tax		37,801		36,993		73,872			69,181			69,556			69,360		38,527
Income from continuing operations		73,377		70,234		140,871			122,716			120,185			118,036		66,839
Discontinued operations, net of tax		—		—		(846	)		(613	)		(5,065	)		3,527		(10,448	)
Net income	$	73,377	$	70,234	$	140,025		$	122,103		$	115,120		$	121,563	$	56,391

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	Six Months Ended June 30,						Year Ended December 31,
	2003			2002			2002			2001			2000			1999			1998
	(in thousands, except per share amounts)
Earnings Per Share:
Income from Continuing Operations
Basic	$	0.59		$	0.59		$	1.18		$	1.07		$	1.05		$	1.02		$	0.59
Diluted	$	0.59		$	0.59		$	1.17		$	1.06		$	1.04		$	1.01		$	0.58
Net Income
Basic	$	0.59		$	0.59		$	1.17		$	1.06		$	1.00		$	1.05		$	0.50
Diluted	$	0.59		$	0.59		$	1.16		$	1.06		$	1.00		$	1.04		$	0.49
Average shares outstanding		123,896			117,554			119,583			114,811			114,760			115,579			113,905
Average diluted shares outstanding		124,540			118,747			120,648			115,881			115,653			117,393			116,547
	As of June 30,						As of December 31,
	2003			2002			2002			2001			2000			1999			1998
Nonperforming Assets
Total non-performing assets ratio		0.71	%		0.60	%		0.78	%		0.64	%		0.53	%		0.54	%		0.59	%
Allowance as a percent of non-performing loans		210	%		325	%		191	%		239	%		258	%		275	%		248	%
Net charge-offs ratio		0.29	%		0.22	%		0.29	%		0.28	%		0.21	%		0.22	%		0.26	%

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DESCRIPTION OF THE PREFERRED SECURITIES

Colonial Capital Trust IV will issue the preferred securities pursuant to the terms of the declaration. The declaration has been qualified as an indenture under the Trust Indenture Act. The institutional trustee, The Bank of New York, will act as trustee for the preferred securities under the declaration for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the preferred securities will include those stated in the declaration and those made part of the declaration by the Trust Indenture Act.

Set forth below is a summary of the material terms and provisions of the preferred securities. This summary is not intended to be complete and is qualified by the declaration, the form of which is filed as an exhibit to the registration statement which contains this prospectus, by the Delaware Statutory Trust Act and by the Trust Indenture Act.

General

The declaration authorizes Colonial Capital Trust IV to issue the trust securities. The trust securities represent undivided beneficial interests in the assets of Colonial Capital Trust IV. All of the common securities will be owned, directly or indirectly, by Colonial BancGroup. The common securities rank equally, and payments will be made on a pro rata basis, with the preferred securities. However, if a declaration event of default, as defined under “—Declaration Events of Default” beginning on page 24, occurs and is continuing, the rights of the holders of the common securities to receive payments will be subordinated to the rights of the holders of the preferred securities.

The declaration does not permit Colonial Capital Trust IV to issue any securities other than the trust securities or to incur any indebtedness. Under the declaration, the institutional trustee will own the junior subordinated debentures purchased by Colonial Capital Trust IV for the benefit of the holders of the trust securities.

The ability of Colonial Capital Trust IV to pay distributions on the distributions, the redemption price of the preferred securities and the liquidation amount of the preferred securities is solely dependent upon Colonial BancGroup making the related payments on the junior subordinated debentures when due. Accordingly, if Colonial BancGroup does not make its required payments on the junior subordinated debentures, Colonial Capital Trust IV will not have sufficient funds to make the related payments on the preferred securities. In addition, the guarantee does not cover payment of distributions or payments upon redemption of the preferred securities or liquidation of Colonial Capital Trust IV when Colonial Capital Trust IV does not have sufficient available funds to make those distributions or payments. In that event, the remedy of a holder of preferred securities is to vote to direct the institutional trustee to enforce the institutional trustee’s rights under the junior subordinated debentures or, if there is a payment default, the holder may institute a direct action, as defined on page 24, against Colonial BancGroup. See “—Declaration Events of Default” beginning on page 24 and “—Voting Rights” beginning on page 24.

Distributions

Distributions on the preferred securities will be fixed at an annual rate equal to             % on the liquidation amount of $25 per preferred security. Distributions unpaid beyond the applicable payment date will accumulate additional distributions at that same rate, compounded quarterly. The term “distributions,” as used in this prospectus, includes any interest payable on unpaid distributions unless otherwise stated.

The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of distributions payable for any period shorter than a full quarterly period will be computed on the basis of the actual number of days elapsed in a 30-day month. If any distributions payment date is not a business day, then the related distributions will be made on the next business day and

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without any interest or other payment in respect of the delay. However, if the next business day falls in the next calendar year, the payment will be made on the preceding business day. A “business day” is any day other than Saturday, Sunday or any other day on which commercial banking institutions in The City of New York are permitted or required by any applicable law, regulation or executive order to close.

Distributions on the preferred securities:

1. will be cumulative;

2. will accrue from September             , 2003; and

3. except as otherwise described below, will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing January 1, 2004.

So long as no event of default under the indenture has occurred and is continuing, Colonial BancGroup is permitted to defer payments of interest on the junior subordinated debentures by extending the interest payment period from time to time on the junior subordinated debentures. If Colonial BancGroup exercises this extension option, quarterly distributions on the preferred securities would also be deferred during any such extension period. Because interest would continue to accrue on the junior subordinated debentures, any deferred distributions would also continue to accrue with interest (to the extent lawful) at an annual rate equal to             %, compounded quarterly. This right to extend the interest payment period for the junior subordinated debentures is limited to a period not exceeding 20 consecutive quarters, and may not extend beyond the stated maturity date or any earlier redemption date. Upon the termination of any extension period and the payment of all amounts then due, Colonial BancGroup may select a new extension period, subject to the above requirements. See “Description of the Junior Subordinated Debentures—Interest” on page 31 and “—Option to Extend Interest Payment Period” beginning on page 32.

If Colonial BancGroup exercises this deferral right, then during any extension period:

1. Colonial BancGroup will not declare or pay any dividend on, make any distributions or other payment with respect to, or redeem, purchase, acquire, or make a liquidation payment relating to, any of its capital stock other than:

• repurchases, redemptions or other acquisitions of shares of capital stock of Colonial BancGroup in connection with any employee benefit plans;

• as a result of an exchange or conversion of any class or series of Colonial BancGroup’s capital stock for any other class or series of Colonial BancGroup’s capital stock; or

• the purchase of fractional interests in shares of Colonial BancGroup’s capital stock pursuant to the conversion or exchange provisions of that capital stock or the security being converted or exchanged;

2. Colonial BancGroup will not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Colonial BancGroup which rank equally with or junior to the junior subordinated debentures; and

3. Colonial BancGroup will not make any guarantee payments with respect to the foregoing, other than the guarantee.

If distributions are deferred, the deferred distributions and accumulated but unpaid distributions will be paid to holders of the preferred securities as they appear on the books and records of Colonial Capital Trust IV on the record date following the termination of that extension period.

Payment and Record Dates

Colonial Capital Trust IV will pay distributions to the holders of the preferred securities as they appear on the books and records of Colonial Capital Trust IV on the relevant record dates. As long as the preferred

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securities are in book-entry form, the record date will be the close of business on the business day prior to the relevant distributions payment date. If the preferred securities are not in book-entry form, the record date will be the fifteenth calendar day prior to the relevant distributions payment date. The record dates and distributions payment dates for the preferred securities are the same as the record dates and interest payment dates for the junior subordinated debentures.

If Colonial Capital Trust IV does not pay a distribution because Colonial BancGroup fails to make the corresponding interest payment on the junior subordinated debentures, that defaulted distribution will be payable to the person in whose name the preferred security is registered on the special record date established by the regular trustees. This record date will correspond to the special record date or other specified date determined in accordance with the indenture. This means that the defaulted distribution may not be paid to the person in whose name the preferred security is registered on the original record date. However, distributions will not be considered payable on any distributions payment date falling within an extension period unless Colonial BancGroup has elected to make a full or partial payment of interest accrued on the junior subordinated debentures on that distributions payment date.

Colonial Capital Trust IV will pay distributions on the preferred securities through the institutional trustee, who will hold amounts received on the junior subordinated debentures for the benefit of the holders of the trust securities. Subject to any applicable laws and regulations and the provisions of the declaration, each payment of distributions will be made as described under “—Book-Entry Only Issuance—The Depository Trust Company” beginning on page 27.

Redemption

The junior subordinated debentures will be redeemable prior to the stated maturity date at the option of Colonial BancGroup at a redemption price equal to 100% of the principal amount, plus unpaid interest accrued to the date of redemption:

1. in whole or in part, from time to time, on or after October 1, 2008; or

2. at any time prior to October 1, 2008, in whole but not in part, upon the occurrence and continuation of a special event. As explained above, owing to recent accounting developments, it is possible that the trust preferred securities will become ineligible for Tier 1 regulatory capital treatment. This would constitute a special event. See “Risk Factors” and “Accounting Treatment.”

Colonial Capital Trust IV will use the proceeds from any repayment of the junior subordinated debentures on the stated maturity date of October 1, 2033 or earlier redemption to simultaneously redeem trust securities having an aggregate liquidation amount equal to the aggregate principal amount of the junior subordinated debentures so repaid or redeemed. The “redemption price” will be $25 per trust security plus unpaid distributions to the date of redemption.

Colonial Capital Trust IV must give holders of trust securities not less than 30 nor more than 60 days’ prior written notice of any redemption prior to the stated maturity date. See “Description of the Junior Subordinated Debentures— Optional Redemption” beginning on page 35. If fewer than all of the outstanding preferred securities are to be redeemed, Colonial Capital Trust IV will redeem the preferred securities in the manner as described under “—Book-Entry Only Issuance—The Depository Trust Company” beginning on page 27. Any redemption of the junior subordinated debentures by Colonial BancGroup prior to the stated maturity date may require prior approval of the Federal Reserve Board if approval is then required under applicable law, rules, guidelines or policies.

Redemption Procedures

Colonial Capital Trust IV may not redeem fewer than all of the outstanding preferred securities unless it has paid all accrued and unpaid distributions on all preferred securities for all quarterly distribution periods terminating on or prior to the date of redemption.

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If Colonial Capital Trust IV gives a notice of redemption of the preferred securities and Colonial BancGroup has paid to Colonial Capital Trust IV a sufficient amount of cash in connection with the related redemption or maturity of the junior subordinated debentures, then on the redemption date:

1. distributions will cease to accrue on the preferred securities called for redemption;

2. the preferred securities called for redemption will no longer be deemed to be outstanding; and

3. all rights of holders of the preferred securities called for redemption will cease, except the right of the holders of those preferred securities to receive the redemption price, but without interest.

Any notice of redemption will be irrevocable. If any date fixed for redemption of preferred securities is not a business day in The City of New York, then payment of the redemption price will be made on the next business day and without any interest or other payment because of the delay. However, if the next business day falls in the next calendar year, the payment will be made on the preceding business day.

If Colonial BancGroup fails to repay junior subordinated debentures on the stated maturity date or on any earlier redemption date or if payment of the redemption price is improperly withheld or refused and not paid by Colonial Capital Trust IV or by Colonial BancGroup under its guarantee, distributions on those preferred securities will continue to accrue to the date of payment. In that case, the actual payment date will be considered the redemption date for purposes of calculating the redemption price.

Colonial Capital Trust IV will not be required to:

1. issue, or register the transfer or exchange of, any trust securities during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of trust securities and ending at the close of business on the day of the mailing of the relevant notice of redemption; and

2. register the transfer or exchange of any trust securities so selected for redemption, in whole or in part, except the unredeemed portion of any trust securities being redeemed in part.

Subject to the foregoing and applicable law, including, without limitation, United States federal securities laws and the regulations of the Federal Reserve Board, Colonial BancGroup or its subsidiaries may at any time, and from time to time, purchase outstanding preferred securities by tender, in the open market or by private agreement.

Distribution of the Junior Subordinated Debentures

Colonial BancGroup will have the right at any time to dissolve Colonial Capital Trust IV and cause the junior subordinated debentures to be distributed to the holders of the trust securities. The exercise of this right is subject to the requirement that Colonial BancGroup receive an opinion of counsel that the dissolution and resulting liquidation of Colonial Capital Trust IV and distribution of the junior subordinated debentures does not result in a taxable event to the holders of the preferred securities. The exercise of this right may also require the prior approval of the Federal Reserve Board if approval is then required under applicable law, rules, guidelines or policies. If the junior subordinated debentures are distributed to the holders of the preferred securities, Colonial BancGroup will use its best efforts to cause the junior subordinated debentures to be listed on any exchange on which the preferred securities are then listed.

On the date for any distribution of junior subordinated debentures upon the dissolution and resulting liquidation of Colonial Capital Trust IV:

1. the trust securities will no longer be deemed to be outstanding;

2. DTC or its nominee, if then the record holder of any preferred securities, will receive a global certificate or certificates representing the junior subordinated debentures registered in its name; and

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3. any certificates representing trust securities not held by DTC or its nominee, until those certificates are presented in exchange for the junior subordinated debentures, will be deemed to represent junior subordinated debentures having:

• an aggregate principal amount equal to the aggregate liquidation amount of the trust securities;

• accrued and unpaid interest equal to accrued and unpaid distributions on, the trust securities; and

• terms that match.

Colonial BancGroup and Colonial Capital Trust IV cannot assure you as to the market prices for either the preferred securities or the junior subordinated debentures that may be distributed in exchange for the preferred securities if Colonial Capital Trust IV were to dissolve. Accordingly, the preferred securities or the junior subordinated debentures may trade at a discount to the price paid to purchase the preferred securities offered by this prospectus.

Liquidation Distribution Upon Dissolution

If Colonial Capital Trust IV dissolves for any of the reasons specified below other than clause 8, the trustees will liquidate Colonial Capital Trust IV as quickly as they determine to be possible by distributing to holders of the preferred and common securities, after satisfying the liabilities owed to Colonial Capital Trust IV’s creditors, junior subordinated debentures having a principal amount equal to the liquidation amount of the preferred and common securities, unless the institutional trustee determines that this distribution is not practicable. If the institutional trustee determines that this distribution is not practicable, holders of the preferred securities will be entitled to receive out of the assets of Colonial Capital Trust IV, after satisfying the liabilities owed to Colonial Capital Trust IV’s creditors, cash distributions in an amount equal to the liquidation amount of $25 per preferred security plus unpaid distributions accrued to the date of payment, the “liquidation distribution.”

If, upon any dissolution and subsequent liquidation, the liquidation distribution can be paid only in part because Colonial Capital Trust IV does not have sufficient assets to pay in full the entire liquidation distribution, then the amounts payable directly by Colonial Capital Trust IV on the preferred securities will be paid on a pro rata basis.

The holders of the common securities will be entitled to receive distributions upon any dissolution and subsequent liquidation pro rata with the holders of the preferred securities. However, if a declaration event of default has occurred and is continuing, the preferred securities will have a preference over the common securities with regard to those distributions.

Pursuant to the declaration, Colonial Capital Trust IV will dissolve:

1. on April 1, 2034, the expiration of the term of Colonial Capital Trust IV;

2. upon the bankruptcy, insolvency or liquidation of Colonial BancGroup or Colonial Capital Trust IV;

3. upon the entry of a decree of a judicial dissolution of Colonial BancGroup or Colonial Capital Trust IV;

4. upon the filing of a certificate of dissolution or its equivalent with respect to Colonial BancGroup;

5. upon the consent of the holders of a majority in liquidation amount of the trust securities, voting together as a single class, to dissolve Colonial Capital Trust IV;

6. upon the revocation of Colonial BancGroup’s charter and the expiration of 90 days after the date of revocation without the charter being reinstated;

7. upon the distribution of junior subordinated debentures to the holders of the trust securities in accordance with the requirements described in this prospectus; or

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8. upon the redemption of all the trust securities.

Declaration Events of Default

An “indenture event of default” is an event of default under the indenture and also constitutes a “declaration event of default,” which is an event of default under the declaration relating to the trust securities. See “Description of the Junior Subordinated Debentures—Indenture Events of Default” beginning on page 37 for a description of indenture events of default.

Under the declaration, the holder of the common securities will be deemed to have waived any declaration event of default relating to the common securities until all declaration events of default relating to the preferred securities have been cured, waived or otherwise eliminated. Until all declaration events of default relating to the preferred securities have been cured, waived or otherwise eliminated, the institutional trustee will be acting solely on behalf of the holders of the preferred securities. Only the holders of the preferred securities will have the right to direct the institutional trustee with respect to certain matters under the declaration, and therefore the indenture. If a declaration event of default relating to the preferred securities is waived by the holders of the preferred securities, the holders of the common securities have agreed that the waiver also constitutes a waiver of the declaration event of default relating to the common securities for all purposes under the declaration without any further act, vote or consent of the holders of the common securities.

If the institutional trustee fails to enforce its rights under the junior subordinated debentures after a holder of preferred securities has made a written request, the holder of preferred securities may, to the fullest extent permitted by law, directly institute a legal proceeding against Colonial BancGroup to enforce those rights without first suing the institutional trustee or any other person or entity. If a declaration event of default has occurred and is continuing and the event is attributable to the failure of Colonial BancGroup to pay interest on or principal of the junior subordinated debentures on the date the interest or principal is otherwise payable, or in the case of redemption, the redemption date, then a holder of preferred securities may also bring a “direct action.” This means that a holder may directly sue Colonial BancGroup to enforce payment of the principal of or interest on the junior subordinated debentures having a principal amount equal to the aggregate liquidation amount of the preferred securities of the holder on or after the respective due date specified in the junior subordinated debentures. The holder need not first (1) direct the institutional trustee to enforce the terms of the junior subordinated debentures or (2) sue Colonial BancGroup to enforce the institutional trustee’s rights under the junior subordinated debentures.

In connection with the direct action, Colonial BancGroup, as holder of the common securities, will be subrogated to the rights of the holder of preferred securities under the declaration to the extent of any payment made by Colonial BancGroup to that holder of preferred securities in the direct action, but only after that holder has received full payment in respect of its preferred securities.

Upon the occurrence of an indenture event of default, the institutional trustee, as the sole holder of the junior subordinated debentures, will have the right to take certain actions under the indenture. See “Description of the Junior Subordinated Debentures—Indenture Events of Default” beginning on page 37. Colonial BancGroup and Colonial Capital Trust IV are each required to file annually with the institutional trustee an officer’s certificate as to its compliance with all conditions and covenants under the declaration.

Voting Rights

Except as described below and under “—Modification of the Declaration” on page 26, “—Mergers, Consolidations or Amalgamations” beginning on page 26, “Description of the Preferred Securities Guarantee—Modification; Assignment” on page 41, and as otherwise required by law and the declaration, the holders of the preferred securities will have no voting rights.

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The holders of a majority in aggregate liquidation amount of the preferred securities have the right to direct any proceeding for any remedy available to the institutional trustee. These holders also have the right to direct the institutional trustee under the declaration to:

(1) direct any proceeding for any remedy available to the debt trustee, or exercising any trust or power conferred on the debt trustee;

(2) waive any past indenture event of default that is waivable under the indenture;

(3) exercise any right to rescind or annul an acceleration of the maturity of the junior subordinated debentures; or

(4) consent to any amendment, modification or termination where that consent is required.

A waiver of an indenture event of default by the institutional trustee at the direction of the holders of the preferred securities will constitute a waiver of the corresponding declaration event of default.

Where a consent or action under the indenture would require the consent or act of holders of more than a majority in aggregate principal amount of the junior subordinated debentures, or a “super majority,” then only a super majority may direct the institutional trustee to give that consent or take that action. Where a consent or action under the indenture would require the consent or act of individual holders of the junior subordinated debentures, then only those individual holders may direct the institutional trustee to give that consent or take that action.

The institutional trustee is required to notify all holders of the preferred securities of any notice of default received from the debt trustee. The notice is required to state that the indenture event of default also constitutes a declaration event of default. Except for directing the time, method and place of conducting a proceeding for any remedy available to the institutional trustee, the institutional trustee will not take any of the actions described in clauses (1), (2), (3) or (4) of the third preceding paragraph unless the institutional trustee receives an opinion of a nationally recognized independent tax counsel. The opinion must state that, taking that action into account, the trust will continue to be classified as a grantor trust for United States federal income tax purposes.

If the consent of the institutional trustee is required under the indenture for any amendment, modification or termination of the indenture, the institutional trustee is required to request the written direction of the holders of the trust securities. In that case, the institutional trustee will vote as directed by a majority in aggregate liquidation amount of the trust securities voting together as a single class. Where any amendment, modification or termination under the indenture would require the consent of a super majority or an individual holder, however, the institutional trustee may only give that consent at the direction of the holders of the same super majority of the holders of the trust securities or that individual holder, as applicable.

Holders of the preferred securities may give any required approval or direction at a separate meeting of holders of preferred securities convened for that purpose, at a meeting of all of the holders of trust securities or by written consent. The regular trustees will mail to each holder of record of preferred securities a notice of any meeting at which those holders are entitled to vote. Each such notice will include a statement setting forth the following information:

• the date of the meeting;

• a description of any resolution proposed for adoption at the meeting on which those holders are entitled to vote; and

• instructions for the delivery of proxies.

No vote or consent of the holders of preferred securities will be required for Colonial Capital Trust IV to redeem and cancel preferred securities or distribute junior subordinated debentures in accordance with the declaration.

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Despite the fact that holders of preferred securities are entitled to vote or consent under the circumstances described above, holders of any of the preferred securities that are owned at the time by Colonial BancGroup or any entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, Colonial BancGroup, will not be entitled to vote or consent. Instead, these preferred securities will be treated as if they were not outstanding.

Holders of the preferred securities will have no rights to appoint or remove the trustees unless there is an indenture event of default, in which case holders of a majority in liquidation amount of the preferred securities will have the right to remove and appoint the institutional trustee and the Delaware trustee. Otherwise, the trustees may be appointed, removed or replaced solely by Colonial BancGroup as the indirect or direct holder of all of the common securities.

Modification of the Declaration

The declaration may be modified and amended if approved by the regular trustees, and in certain circumstances, the institutional trustee and the Delaware Trustee. However, if any proposed amendment provides for, or the regular trustees otherwise propose to effect:

1. any action that would adversely affect the powers, preferences or special rights of the trust securities, whether by way of amendment to the declaration or otherwise; or

2. the liquidation, dissolution, winding-up or termination of Colonial Capital Trust IV other than pursuant to the terms of the declaration,

then the holders of the trust securities voting together as a single class will be entitled to vote on the amendment or proposal. That amendment or proposal will not be effective except with the approval of a majority in aggregate liquidation amount of the trust securities affected thereby. If, however, any amendment or proposal referred to in clause (1) above would adversely affect only the preferred securities or the common securities, then only holders of the affected class will be entitled to vote on the amendment or proposal. The amendment or proposal will not be effective except with the approval of a majority in aggregate liquidation amount of that class of trust securities.

Despite the foregoing, no amendment or modification may be made to the declaration if the amendment or modification would:

1. cause Colonial Capital Trust IV not to be classified for United States federal income taxation purposes as a grantor trust;

2. reduce or otherwise adversely affect the powers of the institutional trustee; or

3. cause Colonial Capital Trust IV to be deemed an “investment company” required to be registered under the Investment Company Act.

Mergers, Consolidations or Amalgamations

Colonial Capital Trust IV may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety, to any corporation or other entity, except as described below or as described in “Description of the Junior Subordinated Debentures” beginning on page 30. Colonial Capital Trust IV may, with the consent of the regular trustees and without the consent of the holders of the trust securities, the institutional trustee or the Delaware trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State of the United States; provided, that:

(1) if Colonial Capital Trust IV is not the survivor, the successor entity either:

(a) expressly assumes all of the obligations of Colonial Capital Trust IV under the trust securities; or

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(b) substitutes for the trust securities other securities having substantially the same terms as the trust securities, so long as the successor securities rank the same as the trust securities rank regarding distributions and payments upon liquidation, redemption and otherwise;

(2) Colonial BancGroup expressly acknowledges a trustee of the successor entity possessing the same powers and duties as the institutional trustee, in its capacity as the holder of the junior subordinated debentures;

(3) the preferred securities or any successor securities are listed, or any successor securities will be listed upon notification of issuance, on any national securities exchange and each other organization, if any, on which the preferred securities are then listed or quoted;

(4) the merger, consolidation, amalgamation or replacement does not cause the rating of the preferred securities or any successor securities to be downgraded or withdrawn by any nationally recognized statistical rating organization;

(5) the merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the trust securities or any successor securities in any material respect, other than with respect to any dilution of the holders’ interest in the new successor entity;

(6) the successor entity has a purpose substantially identical to that of Colonial Capital Trust IV;

(7) after giving effect to the transaction, no event of default and no event which, after notice or lapse of time, or both, would become an event of default, has occurred and is continuing under the indenture;

(8) prior to the merger, consolidation, amalgamation or replacement, Colonial Capital Trust IV has received an opinion of a nationally recognized independent counsel to Colonial Capital Trust IV experienced in those matters that:

(a) the merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the holders of the trust securities or any successor securities in any material respect, other than with respect to any dilution of the holders’ interest in the new successor entity;

(b) following the merger, consolidation, amalgamation or replacement, neither Colonial Capital Trust IV nor the successor entity will be required to register as an investment company under the Investment Company Act; and

(c) following the merger, consolidation, amalgamation or replacement, Colonial Capital Trust IV or, if applicable, the successor entity will be treated as a grantor trust for United States federal income tax purposes; and

(9) Colonial BancGroup guarantees the obligations of the successor entity under the successor securities at least to the extent provided by the guarantee.

Despite the foregoing, Colonial Capital Trust IV will not, except with the consent of holders of 100% in aggregate liquidation amount of the trust securities, consolidate, amalgamate, merge with or into, or be replaced by, any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if the consolidation, amalgamation, merger or replacement would cause Colonial Capital Trust IV or, if applicable, the successor entity not to be classified as a grantor trust for United States federal income tax purposes.

Book-Entry Only Issuance—The Depository Trust Company

Upon issuance, all preferred securities, “book-entry securities,” will be represented by one or more fully registered global certificates, “global securities.” Each global security will be deposited with, or on behalf of, DTC and will be registered in the name of DTC or a nominee of DTC. DTC will thus be the only registered

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holder of the preferred securities and will be considered the sole owner of the preferred securities for purposes of the declaration.

Purchasers of book-entry securities may only hold interests in the global securities through DTC if they are a participant in the DTC system. Purchasers may also hold interests through a securities intermediary—banks, brokerage houses and other institutions that maintain securities accounts for customers—that has an account with DTC or its nominee. DTC will maintain accounts showing the preferred security holdings of its participants, and these participants will in turn maintain accounts showing the preferred security holdings of their customers. Some of these customers may themselves be securities intermediaries holding preferred securities for their customers. Thus, each beneficial owner of an interest in a global security will hold that interest indirectly through a hierarchy of intermediaries, with DTC at the “top” and the beneficial owner’s own securities intermediary at the “bottom.”

Each beneficial owner’s interest in a global security will be evidenced solely by entries on the books of the beneficial owner’s securities intermediary. The actual purchaser of the book-entry securities will generally not be entitled to have the preferred securities represented by the global securities registered in its name and will not be considered the owner under the declaration. In most cases, a beneficial owner will also not be able to obtain a paper certificate evidencing the holder’s ownership of preferred securities. The book-entry system for holding preferred securities eliminates the need for physical movement of certificates. However, the laws of some jurisdictions require some purchasers of securities to take physical delivery of their securities in definitive form. These laws may impair the ability to transfer book-entry securities.

A beneficial owner of an interest in a global security may exchange the securities for definitive (paper) securities only if:

(1) DTC is unwilling or unable to continue as depositary for the global preferred security and Colonial BancGroup is unable to find a qualified replacement for DTC within 90 days;

(2) at any time DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934;

(3) Colonial BancGroup in its sole discretion decides to allow all book-entry securities represented by global securities to be exchangeable for definitive securities in registered form; or

(4) a declaration event of default has occurred and is continuing.

Any global security that is so exchangeable will be exchangeable for definitive securities in registered form, with the same terms and of an equal aggregate principal amount, in denominations of $25 and whole multiples of $25. Definitive securities will be registered in the name or names of the person or persons specified by DTC in a written instruction to the registrar of the securities. DTC may base its written instruction upon directions it receives from its participants.

In this prospectus, for book-entry securities, references to actions taken by preferred security holders will mean actions taken by DTC upon instructions from its participants, and references to payments and notices of redemption to preferred security holders will mean payments and notices of redemption to DTC as the registered holder of the preferred securities for distribution to participants in accordance with DTC’s procedures.

DTC has advised Colonial Capital Trust IV and Colonial BancGroup that its current practice, upon receipt of any payment on the preferred securities, is to credit the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their respective holdings in liquidation amount of the preferred securities as shown on the records of DTC unless DTC has reason to believe it will not receive payment on the payment date. Payments by participants and indirect participants to the beneficial owners of preferred securities will be governed by standing instructions and customary practices and will be the responsibility of participants or indirect participants and will not be the responsibility of DTC, the institutional trustee, Colonial Capital Trust IV

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or Colonial BancGroup. None of Colonial Capital Trust IV, Colonial BancGroup or the institutional trustee will be liable for any delay by DTC or any of its participants or indirect participants in identifying the beneficial owners of the preferred securities, and Colonial BancGroup, Colonial Capital Trust IV and the institutional trustee may conclusively rely on, and will be protected in relying on, instructions from DTC or its nominee for all purposes.

If applicable, redemption notices shall be sent to Cede & Co. If less than all of the book-entry securities are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in such issue to be redeemed.

DTC has advised us that 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 New York Uniform Commercial Code and a “clearing agency” registered under section 17A of the Securities Exchange Act of 1934. The rules applicable to DTC and its participants are on file with the SEC.

None of Colonial Capital Trust IV, Colonial BancGroup or the institutional trustee 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 securities or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Colonial BancGroup, Colonial Capital Trust IV and the underwriters believe to be reliable, but none of Colonial BancGroup, Colonial Capital Trust IV or the underwriters take responsibility for the accuracy of that information.

Payment

Payments on the preferred securities represented by the global certificates will be made to DTC, which will credit the relevant accounts at DTC on the applicable distributions payment dates. In the case of preferred securities in definitive form, payments of interest will be made by check mailed to the address of the holder as that address appears on the records of registrar and transfer agent. However, payments on the stated maturity date or earlier redemption date will be made in same-day funds against surrender of the related preferred securities.

Registrar, Transfer Agent And Paying Agent

If the preferred securities do not remain in book-entry only form, the following provisions will apply:

(1) the institutional trustee will act as paying agent and may designate an additional or substitute paying agent at any time; and

(2) registration of transfers of preferred securities will be effected without charge by or on behalf of Colonial Capital Trust IV, but upon payment, with the giving of such indemnity as Colonial Capital Trust IV or Colonial BancGroup may require, in respect of any tax or other government charges that may be imposed in relation to it.

Information Concerning the Institutional Trustee

Prior to the occurrence of a default with respect to the trust securities and after the curing of any defaults that may have occurred, the institutional trustee is required to perform only such duties as are specifically set forth in the declaration. After such a default, the institutional trustee is required to exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. The institutional trustee is under no obligation to exercise any of the powers vested in it by the declaration at the request of any holder of

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preferred securities, unless offered indemnity reasonably satisfactory to it by the holder against the costs, expenses and liabilities that the institutional trustee might incur by exercising those powers. The holders of preferred securities will not be required to offer that indemnity if the holders, by exercising their voting rights, direct the institutional trustee to take any action following a declaration event of default.

The institutional trustee also serves as trustee under the guarantee and the indenture. Colonial BancGroup and certain of its subsidiaries conduct certain banking transactions with the institutional trustee in the ordinary course of their business.

Common Securities

In connection with the issuance of preferred securities, Colonial Capital Trust IV will issue common securities with terms, other than voting rights, that are substantially identical to the terms of the preferred securities. The common securities will rank equally, and payments will be made on the common securities pro rata, with the preferred securities. However, upon the occurrence of a declaration event of default, the rights of the holders of the common securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the preferred securities. Except in limited circumstances, the common securities carry the right to vote to appoint, remove or replace any of the trustees. All of the common securities will be directly or indirectly owned by Colonial BancGroup.

Miscellaneous

The regular trustees are authorized and directed to operate Colonial Capital Trust IV in such a way so that Colonial Capital Trust IV will not be required to register as an “investment company” under the Investment Company Act and will be characterized as a grantor trust for United States federal income tax purposes. Colonial BancGroup is authorized and directed to conduct its affairs so that the junior subordinated debentures will be treated as indebtedness of Colonial BancGroup for United States federal income tax purposes. In this connection, Colonial BancGroup and the regular trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of Colonial Capital Trust IV or the charter of Colonial BancGroup, that each of Colonial BancGroup and the regular trustees determine in their discretion to be necessary or desirable to achieve that end, as long as that action does not adversely affect the interests of the holders of the preferred securities or vary the terms of the preferred securities.

Holders of the preferred securities have no preemptive or similar rights.

Governing Law

The declaration and the preferred securities will be governed by, and construed in accordance with, the laws of the State of Delaware.

DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES

Colonial BancGroup will issue junior subordinated debentures as a series of debt securities under a base indenture, between Colonial BancGroup and The Bank of New York, as trustee, the “debt trustee,” as supplemented by a supplemental indenture or a resolution of Colonial BancGroup’s board of directors or a special committee appointed by the board of directors. The base indenture, as amended or supplemented from time to time is called the “indenture.” The indenture has been qualified as an indenture under the Trust Indenture Act. The debt trustee, The Bank of New York, will act as trustee for the junior subordinated debentures under the indenture for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the junior subordinated debentures will include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act.

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Set forth below is a summary of the material terms and provisions of the junior subordinated debentures. This summary is not intended to be complete and is qualified by the indenture, the form of which is filed as an exhibit to the registration statement which contains this prospectus, and by the Trust Indenture Act.

General

The junior subordinated debentures will initially be limited in aggregate principal amount to approximately $103,092,800. This amount is the sum of the aggregate liquidation amount of the trust securities.

The junior subordinated debentures are not subject to any sinking fund provision. The entire principal amount of the junior subordinated debentures will mature and become due and payable, together with any accrued and unpaid interest thereon, including compound interest, as defined on page 32 under “—Option to Extend Interest Payment Period” and additional interest, as defined on page 33 under “—Additional Interest,” if any, on October 1, 2033, unless redeemed prior to that date as described under “—Optional Redemption” on page             .

If junior subordinated debentures are distributed to holders of preferred securities upon dissolution and subsequent liquidation of Colonial Capital Trust IV and those preferred securities are represented by global securities, those junior subordinated debentures will initially be represented by one or more global certificates. The depositary arrangements for such junior subordinated debentures are expected to be substantially similar to those currently in effect for the preferred securities. Payments on junior subordinated debentures represented by one or more global certificates will be made to DTC. If junior subordinated debentures are issued in definitive form, those junior subordinated debentures will be in denominations of $25 and integral multiples of $25 and may be transferred or exchanged at the offices described below.

In the event junior subordinated debentures are issued in definitive form, principal and interest will be payable, the transfer of the junior subordinated debentures will be registrable and junior subordinated debentures will be exchangeable for junior subordinated debentures of other denominations of a like aggregate principal amount, at the corporate trust office of the debt trustee in The City of New York. At its option, Colonial BancGroup may make payment of interest by check mailed to the address of the holder entitled to that payment. Colonial BancGroup is required to make payments due on the stated maturity date or earlier redemption date in same-day funds against surrender of the related junior subordinated debentures.

If any interest payment date or the stated maturity date or any earlier redemption date is not a business day, then the required payment on such date will be made on the next business day and without any interest or other payment in respect of the delay. However, if the next business day is in the next calendar year, the payment will be made on the preceding business day.

Colonial BancGroup does not intend to issue and sell the junior subordinated debt securities to any purchasers other than Colonial Capital Trust IV.

There are no covenants or provisions in the indenture that would afford the holders of the junior subordinated debentures protection in the event of a highly leveraged or other similar transaction involving Colonial BancGroup that may materially and adversely affect those holders.

Interest

The junior subordinated debentures will bear interest at an annual rate of             % from the original date of issuance, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing January 1, 2004. Each date on which interest is payable is called an “interest payment date.”

Interest will be paid to the person in whose name the junior subordinated debenture is registered on the relevant record date. While the record dates for the junior subordinated debentures represented by one or more

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global certificates will be the close of business on the business day prior to the relevant interest payment date. The record dates for the junior subordinated debentures in definitive form will be the fifteenth calendar day prior to the relevant interest payment date.

The period beginning on and including September             , 2003 and ending on but excluding the first interest payment date and each successive period beginning on and including an interest payment date and ending on but excluding the next succeeding interest payment date is called an “interest period.”

The amount of interest payable for any interest period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full quarterly period will be computed on the basis of the actual number of days elapsed in a 30-day month.

Option to Extend Interest Payment Period

So long as no indenture event of default has occurred and is continuing, Colonial BancGroup is permitted to defer interest payments by extending the interest payment period for a period not exceeding 20 consecutive quarterly periods. However, no extension period may extend beyond the stated maturity date of the junior subordinated debentures or any earlier redemption date. If Colonial BancGroup exercises this extension option, interest would continue to accrue on the junior subordinated debentures (to the extent lawful) at an annual rate equal to             %, compounded quarterly. At the end of an extension period, Colonial BancGroup will pay all interest then accrued and unpaid, including any additional interest as described under “— Additional Interest” below, together with interest thereon compounded at the rate specified for the junior subordinated debentures to the extent permitted by applicable law, “compound interest.”

Prior to the termination of any extension period, Colonial BancGroup may further defer payments of interest by extending that extension period. However, the extension period, including all such previous and further extensions, may not exceed 20 consecutive quarters by periods and may not extend beyond the stated maturity date or an earlier redemption date. Upon the termination of any extension period and the payment of all amounts then due, Colonial BancGroup may commence a new extension period, subject to the terms set forth in this section. No interest during an extension period, except at the end of that extension period, will be due and payable.

Colonial BancGroup has no present intention of exercising its right to defer payments of interest by extending the interest payment period on the junior subordinated debentures. If the institutional trustee is the sole holder of the junior subordinated debentures, Colonial BancGroup will give the regular trustees, the institutional trustee and the debt trustee notice of its selection of the extension period one business day prior to the earlier of:

(1) the date distributions on the preferred securities are payable; or

(2) the date the regular trustees are required to give notice to the NYSE or any other applicable self-regulatory organization or to holders of the preferred securities of the record date or the date the distributions are payable.

The institutional trustee will give notice of Colonial BancGroup’s selection of the extension period to the holders of the preferred securities. If the institutional trustee is not the sole holder of the junior subordinated debentures, Colonial BancGroup will give the holders of the junior subordinated debentures notice of its selection of the extension period at least ten business days prior to the earlier of:

(1) the interest payment date; or

(2) if the junior subordinated debentures are then listed or quoted, the date upon which Colonial BancGroup is required to give notice to any applicable self-regulatory organization or to holders of the junior subordinated debentures of the record date or the interest payment date.

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Additional Interest

If Colonial Capital Trust IV or the institutional trustee is required to pay any taxes, duties, assessments or other governmental charges of whatever nature, other than withholding taxes, imposed by the United States, or any other taxing authority, then Colonial BancGroup will be required to pay additional interest on the junior subordinated debentures. “Additional interest” will be an amount sufficient so that the net amounts received and retained by Colonial Capital Trust IV and by the institutional trustee after paying any such taxes, duties, assessments or other governmental charges will be equal to the amounts Colonial Capital Trust IV and the institutional trustee would have received had no such taxes, duties, assessments or other governmental charges been imposed. This means that Colonial Capital Trust IV will be in the same position it would have been if it did not have to pay such taxes, duties, assessments or other governmental charges.

Subordination

Colonial BancGroup has agreed that any of the junior subordinated debentures issued under the indenture will rank junior to all of the senior indebtedness to the extent provided in the indenture. Upon any payment or distribution of Colonial BancGroup’s assets to creditors upon Colonial BancGroup’s liquidation, dissolution, winding up, reorganization, assignment for the benefit of creditors, marshalling of assets or any bankruptcy, insolvency, debt restructuring or similar proceedings in connection with any insolvency or bankruptcy proceeding involving Colonial BancGroup, the allocable amounts, as defined below, in respect of the senior indebtedness must be paid in full before the holders of the junior subordinated debentures will be entitled to receive or retain any payment in respect thereof.

No payments on account of principal or interest in respect of the junior subordinated debentures may be made, nor may Colonial BancGroup redeem, retire, purchase or otherwise acquire junior subordinated debentures, if there is a default in any payment with respect to senior indebtedness, or an event of default exists (or would exist ) with respect to any senior indebtedness permitting the acceleration of the maturity of such senior indebtedness.

“Allocable amounts,” when used with respect to any senior indebtedness, means all amounts due or to become due on such senior indebtedness less, if applicable, any amount that would have been paid to, and retained by, the holders of such senior indebtedness (whether as a result of the receipt of payments by the holders of such senior indebtedness from Colonial BancGroup or any other obligor thereon or from any holders of, or trustee in respect of, other indebtedness that is subordinate and junior in right of payment to such senior indebtedness pursuant to any provision of such indebtedness for the payment over of amounts received on account of such indebtedness to the holders of such senior indebtedness or otherwise) but for the fact that such senior indebtedness is subordinate or junior in right of payment to (or subject to a requirement that amounts received on such senior indebtedness be paid over to obligees on) trade accounts payable or accrued liabilities arising in the ordinary course of business.

“Indebtedness for money borrowed” means any of Colonial BancGroup’s obligations, or any obligation guaranteed by Colonial BancGroup, to repay borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, except that indebtedness for money borrowed does not include trade accounts payable or accrued liabilities arising in the ordinary course of business.

“Indebtedness ranking on a parity with the junior subordinated debentures” means:

• indebtedness for money borrowed, whether outstanding on the date the indenture is executed or created, assumed or incurred after the date that the indenture is executed, to the extent the indebtedness for money

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borrowed by its terms ranks equal to and not prior or senior to the junior subordinated debentures in the right of payment upon the happening of Colonial BancGroup’s dissolution, winding-up, liquidation or reorganization;

• all other debt securities issued to any trust other than Colonial Capital Trust IV, or a trustee of such trust, partnership or other entity affiliated with us, that is a financing vehicle of Colonial BancGroup, in connection with the issuance by such vehicle of equity securities or other securities that are similar to the preferred securities; and

• the securing of any indebtedness otherwise constituting indebtedness ranking on a parity with the junior subordinated debentures shall not be deemed to prevent such indebtedness from constituting indebtedness ranking on a parity with the junior subordinated debentures.

“Indebtedness ranking junior to the junior subordinated debentures” means any indebtedness for money borrowed, whether outstanding on the date the indenture is executed or created, assumed or incurred after the date the indenture is executed, to the extent the indebtedness for money borrowed by its terms ranks junior to and not equal with or prior to the junior subordinated debentures (and any other indebtedness ranking on a parity with the junior subordinated debentures) in right of payment upon the happening of Colonial BancGroup’s dissolution, winding-up, liquidation or reorganization. The securing of any indebtedness otherwise constituting indebtedness ranking junior to the junior subordinated debentures shall not be deemed to prevent such indebtedness for money borrowed from constituting indebtedness ranking junior to the junior subordinated debentures.

“Senior indebtedness” means the principal of (and premium, if any) and interest, if any, on all indebtedness for money borrowed, whether outstanding on the date the indenture is executed or created, assumed or incurred after the date the indenture is executed, except indebtedness ranking on a parity with the junior subordinated debentures or indebtedness ranking junior to the junior subordinated debentures, and any deferrals, renewals or extensions of the senior indebtedness.

Upon satisfaction of all claims of all senior indebtedness, the holders of the junior subordinated debentures will be subrogated to the rights of the holders of senior indebtedness of Colonial BancGroup to receive payments or distributions applicable to senior indebtedness until all amounts owing on the junior subordinated debentures are paid in full. That senior indebtedness will continue to be senior indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of that senior indebtedness.

As of June 30, 2003, senior indebtedness of Colonial BancGroup aggregated approximately $14.1 million (holding company only). In addition, liabilities of Colonial BancGroup’s subsidiaries, including depositors, as of June 30, 2003, aggregated approximately $14.7 billion.

The indenture does not limit the aggregate amount of senior indebtedness or other financial obligations, including secured indebtedness, that may be issued or entered into by Colonial BancGroup and its subsidiaries.

Colonial BancGroup is a non-operating holding company and almost all of the operating assets of Colonial BancGroup and its consolidated subsidiaries are owned primarily by its subsidiary, Colonial Bank, N.A. Colonial BancGroup relies primarily on dividends from Colonial Bank, N.A. to meet its obligations. Colonial BancGroup is a legal entity separate and distinct from its banking and non-banking affiliates. Colonial Bank, N.A. is subject to certain restrictions imposed by Federal law on any extensions of credit to, and certain other transactions with, Colonial BancGroup and certain other affiliates, and on investments in stock or other securities thereof. Such restrictions prevent Colonial BancGroup and such other affiliates from borrowing from Colonial Bank, N.A. unless the loans are secured by various types of collateral. Further, secured loans, other transactions and investments by Colonial Bank, N.A. are generally limited in amount as to Colonial BancGroup and as to each of

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such other affiliates to 10% of Colonial Bank, N.A.’s capital and surplus and as to Colonial BancGroup and all of such other affiliates to an aggregate of 20% of Colonial Bank, N.A.’s capital and surplus. In addition, payment of dividends to Colonial BancGroup by Colonial Bank, N.A. is subject to ongoing review by banking regulators and is subject to various statutory limitations and in certain circumstances requires approval by banking regulatory authorities. Because Colonial BancGroup is a holding company, the right of Colonial BancGroup to participate in any distribution of assets of any subsidiary upon the subsidiary’s liquidation or reorganization or otherwise, is subject to the prior claims of creditors of such subsidiary, except to the extent Colonial BancGroup may itself be recognized as a creditor of that subsidiary. Accordingly, the junior subordinated debentures will be effectively subordinated to all existing and future liabilities, including deposits, of all of Colonial BancGroup’s subsidiaries, including Colonial Bank, N.A., and holders of the junior subordinated debentures should look only to the assets of Colonial BancGroup for payments on the junior subordinated debentures.

Optional Redemption

Colonial BancGroup will have the right to redeem the junior subordinated debentures prior to their stated maturity date:

(1) in whole or in part, from time to time, on or after October 1, 2008; or

(2) at any time prior to October 1, 2008, in whole but not in part, upon the occurrence and continuation of a special event;

in either case, upon not less than 30 nor more than 60 days’ notice. The redemption price will be equal to 100% of the principal amount to be redeemed, plus unpaid interest accrued to the date of redemption. The redemption may require prior approval of the Federal Reserve Board if approval is then required under applicable law, rules, guidelines or policies.

A “special event” means a tax event, regulatory capital event or an investment company event, each as defined below.

A “tax event” means that Colonial Capital Trust IV will have received an opinion of nationally recognized independent tax counsel experienced in those matters that, as a result of:

(1) any amendment to, or change, including any announced prospective change, in, the laws of the United States or any regulations thereunder or any political subdivision or taxing authority of or in the United States; or

(2) any official administrative pronouncement or judicial decision interpreting or applying those laws or regulations,

which amendment or change is effective or the pronouncement or decision is announced on or after the date of original issuance of the junior subordinated debentures, there is more than an insubstantial risk that:

(1) Colonial Capital Trust IV is, or will be within 90 days of the date of the opinion, subject to United States federal income tax with respect to income received or accrued on the junior subordinated debentures;

(2) interest payable by Colonial BancGroup on the junior subordinated debentures is not, or within 90 days of the date of the opinion will not be, deductible by Colonial BancGroup, in whole or in part, for United States federal income tax purposes; or

(3) Colonial Capital Trust IV is, or will be within 90 days of the date of the opinion, subject to more than a de minimis amount of other taxes, duties or other governmental charges.

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A “regulatory capital event” means that Colonial BancGroup will have received an opinion of nationally recognized independent bank regulatory counsel experienced in those matters that, as a result of:

(1) any amendment to or change, including any announced prospective change, in the laws or any regulations thereunder of the United States or any rules, guidelines or policies of the Federal Reserve Board; or

(2) any official administrative pronouncement or judicial decision interpreting or applying the laws or regulations,

which amendment or change is effective or the pronouncement or decision is announced on or after the date of original issuance of the junior subordinated debentures, there is more than an insubstantial risk that:

(1) the preferred securities no longer constitute Tier 1 capital or its then equivalent for regulatory capital purposes, or

(2) within 90 days of the date of either of those events, the preferred securities will not constitute Tier 1 capital or its then equivalent for regulatory capital purposes;

provided, however, that the distribution of the junior subordinated debentures in connection with the dissolution of Colonial Capital Trust IV by Colonial BancGroup and the treatment of the junior subordinated debentures as other than Tier 1 capital will not constitute a regulatory capital event.

A regulatory capital event would include the potential change in Federal Reserve Board guidelines on the eligibility of trust preferred securities to qualify as “Tier 1” regulatory capital in light of recent accounting changes affecting the criteria for consolidation of variable interest entities such as Colonial Capital Trust IV (as described in FIN 46) and the appropriate financial reporting balance sheet classification of trust preferred securities (as described in FAS 150).

An “investment company event” means the receipt by Colonial Capital Trust IV of an opinion of a nationally recognized independent counsel experienced in those matters that, as a result of the occurrence of a change in law or regulation or a 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 Colonial Capital Trust IV 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 original issuance of the junior subordinated debentures.

Certain Covenants of Colonial BancGroup

If junior subordinated debentures are being held by the institutional trustee for the benefit of holders of trust securities and:

• an indenture event of default, or an event that, with notice or the lapse of time or both, would be an indenture event of default, has occurred and is continuing;

• Colonial BancGroup is in default relating to its payment of any obligations under the guarantee; or

• Colonial BancGroup has given notice of its election to defer payments of interest on the junior subordinated debentures by extending the interest payment period and that period, or any extension of that period, is continuing,

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then

• Colonial BancGroup will not declare or pay any dividend on, make any distributions or other payments relating to, or redeem, purchase, acquire or make a liquidation payment relating to, any of its capital stock other than:

(1) repurchases, redemptions or other acquisitions of shares of capital stock of Colonial BancGroup in connection with any employee benefit plans;

(2) as a result of an exchange or conversion of any class or series of Colonial BancGroup’s capital stock for any other class or series of Colonial BancGroup’s capital stock; or

(3) the purchase of fractional interests in shares of Colonial BancGroup’s capital stock pursuant to the conversion or exchange provisions of that capital stock or the security being converted or exchanged;

• Colonial BancGroup will not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by Colonial BancGroup which rank equally with or junior to the junior subordinated debentures; and

• Colonial BancGroup will not make any guarantee payments with respect to the foregoing, other than pursuant to the guarantee.

So long as the trust securities remain outstanding, Colonial BancGroup will covenant to:

• directly or indirectly maintain 100% ownership of the common securities of the trust, unless a permitted successor of Colonial BancGroup succeeds to its ownership of the common securities;

• use its best efforts to cause Colonial Capital Trust IV to:

(1) remain a statutory trust, except in connection with the distribution of junior subordinated debentures to the holders of trust securities in liquidation of the trust, the redemption of all of the trust securities of the trust, or mergers, consolidations or amalgamations, each as permitted by the declaration which established Colonial Capital Trust IV; and

(2) otherwise continue to be classified as a grantor trust for United States federal income tax purposes;

• use its best efforts to cause each holder of trust securities to be treated as owning an undivided beneficial interest in the junior subordinated debentures; and

• not to cause, as sponsor of Colonial Capital Trust IV, or permit, as holder of the common securities, the liquidation of Colonial Capital Trust IV, except as permitted in the declaration.

Indenture Events of Default

The indenture provides that the following are indenture events of default relating to the junior subordinated debentures:

• default in the payment of the principal of any junior subordinated debenture when due, whether at maturity, earlier redemption or otherwise;

• default for 30 days in the payment of any installment of interest, including additional interest and compound interest, on any junior subordinated debenture (subject to an extension period permitted under the indenture);

• default for 90 days after written notice in the performance of any other covenant in respect of any junior subordinated debenture;

• certain events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of Colonial BancGroup; and

• the dissolution, liquidation, winding-up or other termination of Colonial Capital Trust IV.

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If an indenture event of default occurs and is continuing, either the debt trustee or the holders of not less than 25 percent in aggregate principal amount of the junior subordinated debentures then outstanding may declare the principal of all junior subordinated debentures of that series to be due and payable immediately. The holders of a majority in aggregate principal amount of junior subordinated debentures may annul the declaration and waive the default if the default has been cured and a sum sufficient to pay all matured installments of interest and principal due other than by acceleration has been deposited with the debt trustee. The majority holders may not waive a payment default on the junior subordinated debentures which has become due solely by acceleration.

Prior to any declaration accelerating the maturity of the junior subordinated debentures, the holders of a majority in aggregate principal amount of the junior subordinated debentures may, on behalf of the holders of all the junior subordinated debentures, waive any past default, except a default in the payment of principal 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 debt 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 junior subordinated debenture.

The holders of a majority in aggregate principal amount of the junior subordinated debentures will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the debt trustee under the indenture, so long as the holders of the junior subordinated debentures have offered to the debt trustee indemnity reasonably satisfactory to it against expenses and liabilities.

The indenture requires the annual filing by Colonial BancGroup with the debt trustee of a certificate as to the absence of certain defaults under the indenture.

The debt trustee may withhold notice of any event of default from the holders of the junior subordinated debentures, except in the payment of principal or interest, if the debt trustee considers it in the interest of those holders to do so.

If the institutional trustee fails to enforce its rights under the junior subordinated debentures after a holder of the preferred securities has made a written request, the holder of the preferred securities may, to the fullest extent permitted by law, institute a legal proceeding directly against Colonial BancGroup to enforce the institutional trustee’s rights under the junior subordinated debentures without first instituting any legal proceeding against the institutional trustee or any other person or entity.

Despite the foregoing, if a declaration event of default has occurred and is continuing and that event is attributable to the failure of Colonial BancGroup to pay interest on or principal of the junior subordinated debentures when that interest or principal is otherwise payable, Colonial BancGroup acknowledges that, in that event, a holder of preferred securities may institute a direct action against Colonial BancGroup for payment on or after the respective due date specified in the junior subordinated debentures. Despite any payments made to the holder of preferred securities by Colonial BancGroup in connection with a direct action, Colonial BancGroup will remain obligated to pay the principal of or interest on the junior subordinated debentures held by Colonial Capital Trust IV or the institutional trustee. In connection with the direct action, Colonial BancGroup, as holder of the common securities, will be subrogated to the rights of the holder of preferred securities under the declaration to the extent of any payments made by Colonial BancGroup to that holder of preferred securities in the direct action, but only after that holder has received full payment in respect of its preferred securities.

Except as provided in the preceding paragraph and in the guarantee, the holders of preferred securities will not be able to exercise directly any other remedy available to the holders of the junior subordinated debentures unless a declaration event of default exists.

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Modification of the Indenture

Modifications and amendments to the indenture may be made by Colonial BancGroup and the debt trustee with the consent of the holders of a majority in aggregate principal amount of the junior subordinated debentures at the time outstanding. However, no such modification or amendment may, without the consent of the holder of each junior subordinated debenture affected:

• modify the payment terms of the junior subordinated debentures or the ability of holders to institute legal action to recover payments due and owing;

• reduce the percentage of holders of junior subordinated debentures necessary to modify or amend the indenture, to waive compliance by Colonial BancGroup with any covenant or to waive any past default; or

• make any change to the subordination provisions that would adversely affect the interests of the holders of junior subordinated debentures.

Modifications and amendments to the indenture may be made by Colonial BancGroup and the debt trustee without the consent of the holders of the junior subordinated debentures for specified purposes, including curing ambiguities, defects or inconsistencies that do not materially and adversely affect holders.

Consolidation, Merger, Sale of Assets and other Transactions

The indenture provides that Colonial BancGroup will not consolidate with or merge into any other person or convey, transfer or lease all or substantially all of Colonial BancGroup’s properties to any person, and no person shall consolidate with or merge into Colonial BancGroup or convey, transfer or lease all or substantially all of its properties to Colonial BancGroup, unless:

• if Colonial BancGroup consolidates with or merges into another person or conveys or transfers all or substantially all of its properties to any person, the successor is organized under the laws of the United States or any state or the District of Columbia and, if Colonial BancGroup is not the surviving corporation, the successor expressly assumes Colonial BancGroup’s obligations under the declaration, the indenture, the guarantee and the junior subordinated debentures;

• immediately after giving effect to the transaction, no debenture event of default, and no event which, after notice or lapse of time or both, would become a debenture event of default, exists; and

• certain other conditions as prescribed in the indenture are met.

The general provisions of the indenture do not afford holders of the junior subordinated debentures protection in the event of a highly leveraged or other transaction that Colonial BancGroup may become involved in that may adversely affect holders of the junior subordinated debentures.

Satisfaction and Discharge

The indenture provides that when, among other things:

• all junior subordinated debentures not previously delivered to the debt trustee for cancellation have become due and payable or will become due and payable at maturity or called for redemption within one year; and

• Colonial BancGroup deposits or causes to be deposited with the debt trustee funds, in trust, for the purpose and in an amount sufficient to pay and discharge the entire indebtedness on the junior subordinated debentures not previously delivered to the debt trustee for cancellation, for the principal and interest to the date of the deposit or to the stated maturity date, as the case may be, then the indenture will cease to be of further effect (except as to Colonial BancGroup’s obligations to pay all other sums due pursuant to the indenture and to provide the officers’ certificates and opinions of counsel), and Colonial BancGroup will be deemed to have satisfied and discharged the indenture.

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Miscellaneous

The indenture provides that Colonial BancGroup will pay all fees and expenses related to:

(1) the issuance and sale of the trust securities and the junior subordinated debentures;

(2) the organization, maintenance and dissolution of Colonial Capital Trust IV;

(3) the retention of the regular trustees; and

(4) the enforcement by the institutional trustee of the rights of the holders of the preferred securities.

Governing Law

The indenture and the junior subordinated debentures will be governed by, and construed in accordance with, the laws of the State of New York.

DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE

Colonial BancGroup will issue the guarantee for the benefit of the holders from time to time of preferred securities. The preferred securities guarantee has been qualified as an indenture under the Trust Indenture Act. The guarantee trustee, The Bank of New York, will act as trustee under the guarantee for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the guarantee will include those set forth in the guarantee and those made part of the guarantee by the Trust Indenture Act. The guarantee will be held by the guarantee trustee for the benefit of the holders of the preferred securities.

Set forth below is a summary of the material terms and provisions of the guarantee. This summary is not intended to be complete and is qualified by the guarantee, the form of which is filed as an exhibit to the registration statement which contains this prospectus, and the Trust Indenture Act.

General

Pursuant to and to the extent set forth in the guarantee, Colonial BancGroup will irrevocably and unconditionally agree to pay in full to the holders of the preferred securities, except to the extent paid by Colonial Capital Trust IV, as and when due, regardless of any defense, right of set-off or counterclaim which Colonial Capital Trust IV may have or assert, the following payments, which are referred to as “guarantee payments,” without duplication:

• any unpaid distributions that are required to be paid on the preferred securities, to the extent Colonial Capital Trust IV has funds available for distributions;

• the redemption price, plus all unpaid distributions, to the extent Colonial Capital Trust IV has funds available for redemption, relating to any preferred securities called for redemption by the trust; and

• upon a dissolution of Colonial Capital Trust IV, other than in connection with the distribution of junior subordinated debentures to the holders of preferred securities or the redemption of all of the preferred securities, the lesser of:

(1) the aggregate of the liquidation amount and all unpaid distributions on the preferred securities to the date of payment, to the extent Colonial Capital Trust IV has funds available therefor; or

(2) the amount of assets of the trust remaining for distribution to holders of the preferred securities in liquidation of Colonial Capital Trust IV.

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Colonial BancGroup’s obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by Colonial BancGroup to the holders of preferred securities or by causing Colonial Capital Trust IV to pay those amounts to those holders.

The guarantee will not apply to any payment of distributions except to the extent Colonial Capital Trust IV has funds available for those payments. If Colonial BancGroup does not make interest payments on the junior subordinated debentures, the trust will not have funds available for pay distributions on the preferred securities.

The guarantee, when taken together with Colonial BancGroup’s obligations under the junior subordinated debentures, the indenture and the declaration, including its obligations to pay costs, expenses, debts and liabilities of Colonial Capital Trust IV, other than those relating to trust securities, will provide a full and unconditional guarantee on a subordinated basis by Colonial BancGroup of payments due in respect of the preferred securities.

Colonial BancGroup has also agreed separately to irrevocably and unconditionally guarantee the obligations of Colonial Capital Trust IV with respect to the common securities to the same extent as the guarantee covering the preferred securities, except that upon an event of default under the indenture, holders of preferred securities will have priority over holders of common securities with respect to distributions and payments on liquidation, redemption or otherwise.

Modification; Assignment

The guarantee may be amended only with the prior approval of the holders of a majority in aggregate liquidation amount of the preferred securities. No vote will be required, however, for any changes that do not adversely affect in any material way the rights of holders of preferred securities. All guarantees and agreements contained in the guarantee will bind the successors, assignees, receivers, trustees and representatives of Colonial BancGroup and will be for the benefit of the holders of the preferred securities then outstanding.

Termination

The guarantee will terminate upon full payment of the redemption price of all preferred securities, upon distribution of the junior subordinated debentures to the holders of the trust securities or upon full payment of the amounts payable in accordance with the declaration upon liquidation of Colonial Capital Trust IV. The guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of preferred securities must restore payment of any sums paid under the preferred securities or the related guarantee.

Events of Default

An event of default under the guarantee will occur upon the failure of Colonial BancGroup to perform any of its payment or other obligations under the guarantee.

The holders of a majority in aggregate liquidation amount of the preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the 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 holder of preferred securities may institute a legal proceeding directly against Colonial BancGroup to enforce the guarantee trustee’s rights and the obligations of Colonial BancGroup under the guarantee, without first instituting a legal proceeding against Colonial Capital Trust IV, the guarantee trustee or any other person or entity.

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Status

The guarantee will constitute unsecured obligations of Colonial BancGroup and will rank:

(1) subordinate and junior in right of payment to all other liabilities of Colonial BancGroup, except those made equally with or subordinate to the guarantee by their terms;

(2) equally with the most senior preferred or preference stock now or hereafter issued by Colonial BancGroup and with any guarantee now or hereafter entered into by Colonial BancGroup in respect of any preferred or preference stock of any affiliate of Colonial BancGroup; and

(3) senior to Colonial BancGroup common stock.

The terms of the preferred securities provide that each holder of preferred securities by acceptance of those securities agrees to the subordination provisions and other terms of the guarantee.

The guarantee will constitute a guarantee of payment and not of collection. This means that the guaranteed party may sue the guarantor to enforce its rights under the guarantee without suing any other person or entity.

Information Concerning the Guarantee Trustee

Prior to the occurrence of a default relating to the guarantee, the guarantee trustee undertakes to perform only those duties as are specifically set forth in the guarantee. After default, the guarantee trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Provided that the foregoing requirements have been met, 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 preferred securities, unless offered indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred thereby.

Colonial BancGroup or its affiliates maintain certain accounts and other banking relationships with the guarantee trustee and its affiliates in the ordinary course of business.

Governing Law

The guarantee will be governed by, and construed in accordance with, the laws of the State of New York.

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EFFECT OF OBLIGATIONS UNDER THE PREFERRED SECURITIES,

THE GUARANTEE AND THE JUNIOR SUBORDINATED DEBENTURES

As set forth in the declaration, the sole purpose of Colonial Capital Trust IV is to issue and sell the trust securities and to invest the proceeds from that issuance and sale in the junior subordinated debentures.

As long as payments of interest and other payments are made when due on the junior subordinated debentures, those payments will be sufficient to cover the distributions and other payments due on the trust securities. This is due to the following factors:

(1) the aggregate principal amount of junior subordinated debentures will be equal to the sum of the aggregate liquidation amount of the trust securities;

(2) the interest rate and the interest and other payment dates on the junior subordinated debentures will match the distribution rate and distributions and other payment dates for the trust securities;

(3) under the indenture, Colonial BancGroup will pay, and Colonial Capital Trust IV will not be obligated to pay, directly or indirectly, all costs, expenses, debts and obligations of the trust, other than those relating to the trust securities; and

(4) the declaration further provides that the Colonial BancGroup trustees may not cause or permit Colonial Capital Trust IV to engage in any activity that is not consistent with its stated purposes.

The guarantee, when taken together with Colonial BancGroup’s obligations under the junior subordinated debentures, the indenture and the declaration, will provide a full and unconditional guarantee on a subordinated basis of distributions, redemption payments and liquidation payments on the preferred securities. If Colonial BancGroup does not make payments on the junior subordinated debentures, Colonial Capital Trust IV will not have sufficient funds to make the related payments, including distributions, on the preferred securities. The guarantee does not apply to any payment unless Colonial Capital Trust IV has sufficient funds for that payment from Colonial BancGroup. See “Description of the Preferred Securities Guarantee” beginning on page 40.

The declaration allows the holders of the preferred securities to direct the institutional trustee to enforce its rights under the junior subordinated debentures. If the institutional trustee fails to enforce these rights, any holder of preferred securities may, to the fullest extent permitted by law, directly sue Colonial BancGroup to enforce these rights without first suing the institutional trustee or any other person or entity. See “Description of the Preferred Securities—Voting Rights” beginning on page 24 and “—Book-Entry Only Issuance—The Depository Trust Company” beginning on page 27. Despite the foregoing, a holder of preferred securities may institute a direct action against Colonial BancGroup if a declaration event of default has occurred and is continuing and that event is attributable to the failure of Colonial BancGroup to pay interest on or principal of the junior subordinated debentures on the date the interest or principal is otherwise payable. A direct action may be brought against Colonial BancGroup without first (1) directing the institutional trustee to enforce the terms of the junior subordinated debentures or (2) suing Colonial BancGroup to enforce the institutional trustee’s rights under the junior subordinated debentures. In connection with that direct action, Colonial BancGroup, as holder of the common securities, will be subrogated to the rights of the holder of preferred securities under the declaration to the extent of any payment made by Colonial BancGroup to that holder of preferred securities but only after that holder has received full payment in respect of its preferred securities.

Colonial BancGroup acknowledges that the guarantee trustee will enforce the guarantee on behalf of the holders of the preferred securities. If Colonial BancGroup fails to make payments under the guarantee, the guarantee allows the holders of the preferred securities to direct the guarantee trustee to enforce its rights thereunder. If the guarantee trustee fails to enforce the guarantee, any holder of preferred securities may directly sue Colonial BancGroup to enforce the guarantee trustee’s rights under the guarantee. The holder need not first sue Colonial Capital Trust IV, the guarantee trustee, or any other person or entity.

Colonial BancGroup and Colonial Capital Trust IV believe that the above mechanisms and obligations, taken together, are equivalent to a full and unconditional guarantee by Colonial BancGroup, on a subordinated basis, of payments due in respect of the preferred securities.

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UNITED STATES FEDERAL INCOME TAXATION

General

In the opinion of Miller, Hamilton, Snider & Odom, L.L.C., counsel to Colonial BancGroup and Colonial Capital Trust IV, “tax counsel,” the following is a summary of certain of the material United States federal income tax consequences of the purchase, ownership and disposition of preferred securities held as capital assets by a holder who purchases those preferred securities upon initial issuance. It does not deal with special classes of holders such as banks, thrifts, real estate investment trusts, regulated investment companies, insurance companies, dealers in securities or currencies, tax-exempt investors, United States Alien Holders (as defined below) to the extent that the ownership of those preferred securities are held in connection with the conduct of a trade or business in the United States or persons that will hold the preferred securities as a position in a “straddle,” as part of a “synthetic security” or “hedge,” as part of a “conversion transaction” or other integrated investment or as other than a capital asset. This summary also does not address the tax consequences to persons that have a functional currency other than the U.S. dollar or the tax consequences to shareholders, partners or beneficiaries of a holder of preferred securities. Further, it does not include any description of any alternative minimum tax consequences or the tax laws of any state or local government or of any foreign government that may be applicable to the preferred securities. This summary is based on the Internal Revenue Code of 1986, as amended, the “Code,” Treasury regulations under the Code, the “regulations,” and administrative and judicial interpretations of the Code and the regulations, as of the date of this prospectus, all of which are subject to change, possibly on a retroactive basis.

Classification of the Junior Subordinated Debentures

In connection with the issuance of the junior subordinated debentures, tax counsel will render its opinion that, under current law and assuming full compliance with the terms of the indenture and certain other documents, and based on certain facts and assumptions contained in that opinion, the junior subordinated debentures will be classified for United States federal income tax purposes as indebtedness of Colonial BancGroup. In addition, by acceptance of a preferred security, each holder agrees to treat the junior subordinated debentures as indebtedness for all United States federal income tax purposes.

Classification of the Trust

In connection with the issuance of the preferred securities, tax counsel will render its opinion that, under current law and assuming full compliance with the terms of the declaration and the indenture and certain other documents, and based on certain facts and assumptions contained in that opinion, Colonial Capital Trust IV will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation. Accordingly, for United States federal income tax purposes, each holder of preferred securities generally will be considered the owner of a pro rata undivided interest in the junior subordinated debentures, and each holder will be required to include in its gross income any interest, or original issue discount, “OID,” paid or accrued with respect to its allocable share of those junior subordinated debentures.

Interest Income and Original Issue Discount

Under regulations promulgated under the OID provisions of the Code, a “remote” contingency that stated interest will not be timely paid will be ignored in determining whether a debt instrument is issued with OID. Colonial BancGroup believes that the likelihood of its exercising its option to defer payments of interest on the junior subordinated debentures is “remote” since exercising that option would prevent Colonial BancGroup from, among other things, declaring dividends on any class of its equity securities. Accordingly, Colonial BancGroup intends to take the position, based on the advice of tax counsel, that the junior subordinated debentures will not be considered to be issued with OID and, accordingly, stated interest on the junior subordinated debentures generally will be taxable to a holder as ordinary income at the time it is paid or accrued in accordance with the holder’s regular method of accounting for United States federal income tax purposes. However, the Internal Revenue Service, the “IRS,” could interpret the regulations with respect to OID in a manner contrary to the

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position Colonial BancGroup intends to take. If the IRS succeeded in asserting the contrary position, the OID rules would generally require you to include interest on the junior subordinated debentures in your taxable income as it accrues rather than when you receive payment, even though you use the cash method of accounting for United States federal income tax purposes.

Under the regulations, if Colonial BancGroup were to exercise its option to defer payments of interest on the junior subordinated debentures, the junior subordinated debentures would at that time be treated as having been reissued with OID, and all stated interest on the junior subordinated debentures would thereafter be treated as OID as long as the junior subordinated debentures remain outstanding. In that event, all of a holder’s taxable interest income with respect to the junior subordinated debentures would thereafter be accounted for on an economic accrual basis regardless of the holder’s method of tax accounting, and actual cash distributions of stated interest would not be reported as taxable income. Consequently, a holder of preferred securities would be required to include in gross income OID even if Colonial BancGroup does not make actual cash payments during an extension period. The amount of OID income includible in your taxable income would be determined on the basis of a constant yield method over the remaining term of the junior subordinated debentures and the actual receipt of future payments of stated interest on the junior subordinated debentures would no longer be separately reported as taxable income. The total amount of OID that would accrue during the deferred interest payment period would be approximately equal to the amount of the cash payment due at the end of that period. Any OID included in income would increase your adjusted tax basis in your preferred securities and junior subordinated debentures, and your actual receipt of cash interest payments would reduce that adjusted tax basis.

These regulations have not yet been addressed in any rulings or other interpretations by the Internal Revenue Service, and it is possible that the IRS could take a position contrary to tax counsel’s interpretation.

Because income on the preferred securities will constitute interest or OID, (i) corporate holders of the preferred securities will not be entitled to a dividends-received deduction with respect to any income recognized with respect to the preferred securities and (ii) noncorporate individual holders will not be entitled to any preferential tax rate with respect to any income received on the preferred securities.

Receipt of Junior Subordinated Debentures or Cash upon Liquidation of Colonial Capital Trust IV

Colonial BancGroup will have the right at any time to dissolve Colonial Capital Trust IV and cause the junior subordinated debentures to be distributed to the holders of the trust securities, subject to Colonial BancGroup’s receipt of an opinion of counsel that the resulting liquidation and distribution of the junior subordinated debentures would not result in a taxable event to holders of the preferred securities. Under current law, such a distribution, for United States federal income tax purposes, would be treated as a nontaxable event to each holder, and each holder would receive an aggregate tax basis in the junior subordinated debentures received equal to the holder’s aggregate tax basis in its preferred securities. A holder’s holding period in the junior subordinated debentures so received in dissolution of Colonial Capital Trust IV would include the period during which the preferred securities were held by the holder. If, despite the delivery of an opinion of counsel that the dissolution, resulting liquidation and distribution of junior subordinated debentures would not result in a taxable event to holders of the preferred securities, Colonial Capital Trust IV is ultimately characterized for United States federal income tax purposes as an association taxable as a corporation at the time of its dissolution and liquidation, the distribution of junior subordinated debentures would be a taxable event to holders of the preferred securities.

If you receive junior subordinated debentures in exchange for your preferred securities, you would continue to accrue interest, and OID if any, in respect of those junior subordinated debentures in the manner described above. Under certain circumstances described in this prospectus under “Description of the Preferred Securities,” the junior subordinated debentures may be redeemed for cash and the proceeds of that redemption distributed to holders in redemption of their preferred securities. Under current law, such a redemption would, for United States federal income tax purposes, constitute a taxable disposition of the redeemed preferred securities, and a holder would recognize gain or loss, if any, as if it sold those redeemed preferred securities for cash. See “—Sales of Preferred Securities” below.

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Sales of Preferred Securities

A holder that sells preferred securities, including a redemption of the preferred securities by Colonial Capital Trust IV, will recognize gain or loss equal to the difference between its adjusted tax basis in the preferred securities and the amount realized on the sale of those preferred securities (other than with respect to accrued and unpaid interest which has not yet been included in income, which will be treated as ordinary income). A holder’s adjusted tax basis in the preferred securities generally will be its initial purchase price increased by OID (if any) previously includable in the holder’s gross income to the date of disposition and decreased by payments received on the preferred securities in respect of OID (if any). The gain or loss generally will be a capital gain or loss and generally will be a long-term capital gain or loss if the preferred securities have been held by that holder for more than one year. Long-term capital gains of non-corporate holders are generally subject to reduced capital gain rates.

The preferred securities may trade at a price that does not accurately reflect the value of accrued but unpaid interest with respect to the underlying junior subordinated debentures. A holder who uses the accrual method of accounting for tax purposes, and a cash method holder, if the junior subordinated debentures are deemed to have been issued with OID, and who disposes of his or her preferred securities between record dates for payments of distributions thereon will be required to include accrued but unpaid interest on the junior subordinated debentures through the date of disposition in income as ordinary income (i.e., interest or, possibly, OID), and to add that amount to his or her adjusted tax basis in his or her pro rata share of the underlying junior subordinated debentures deemed disposed of. To the extent the selling price is less than the holder’s adjusted tax basis (which will include all accrued but unpaid interest), a holder 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.

United States Alien Holders

For purposes of this discussion, a “United States Alien Holder” is any corporation, individual, partnership, estate or trust that is not a U.S. Holder for United States federal income tax purposes.

A “U.S. Holder” is a beneficial owner of preferred securities who or which is:

(1) a citizen or individual resident (or is treated as a citizen or individual resident) of the United States for federal income tax purposes;

(2) a corporation or partnership (or other entity treated as a partnership or corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or any state of the United States, including the District of Columbia;

(3) an estate the income of which is includable in its gross income for federal income tax purposes without regard to its source; or

(4) a trust if, and only if, (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (b) the trust was in existence on August 20, 1996 and is treated as a United States holder under applicable regulations.

Under present United States federal income tax law:

(1) payments by Colonial Capital Trust IV or any of its paying agents to any holder of a preferred security who or which is a United States Alien Holder generally will not be subject to United States federal withholding tax, so long as

(a) the beneficial owner of the preferred security does not actually or constructively own 10 percent or more of the total combined voting power of all classes of stock of Colonial BancGroup entitled to vote;

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(b) the beneficial owner of the preferred security is not a controlled foreign corporation that is related to Colonial BancGroup through stock ownership;

(c) the beneficial owner of the preferred security is not a bank receiving interest described in Section 881(c)(3)(A) of the Code; and

(d) either (A) the beneficial owner of the preferred security certifies on an IRS Form W-8BEN to Colonial Capital Trust IV or its agent, under penalties of perjury, that it is not a U.S. Holder and provides its name and address, (B) a qualified securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business, a “financial institution,” and holds the preferred security in that capacity, certifies to Colonial Capital Trust IV or its agent, under penalties of perjury, that the statement has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes Colonial Capital Trust IV or its agent with a copy of the statement or (C) if the beneficial owner is neither an individual nor a corporation for federal income tax purposes, certain other reporting requirements are satisfied; and

(2) a United States Alien Holder of a preferred security generally will not be subject to United States federal withholding tax on any gain realized upon the sale or other disposition (including a redemption) of a preferred security; and

(3) a United States Alien Holder whose income with respect to its investment in a preferred security is effectively connected with the conduct of a U.S. trade or business would generally not be subject to United States federal withholding tax and would be taxed as if the holder was a U.S. Holder provided the holder provides a properly executed IRS Form W-8ECI.

Information Reporting to Holders

Generally, income on the preferred securities will be reported to holders on Forms 1099, which forms should be mailed to holders of preferred securities by January 31 following each calendar year.

Backup Withholding

Payments made on, and proceeds from the sale of, the preferred securities may be subject to a “backup” withholding tax at the applicable statutory rate unless the holder complies with certain identification requirements. Any withheld amounts will be allowed as a credit against the holder’s United States federal income tax, provided the required information is provided to the IRS.

The United States federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders should consult their own tax advisors with respect to the tax consequences to them of the purchase, ownership and disposition of the preferred securities, including the tax consequences under federal, state, local and foreign income and other tax laws and the possible effects of changes in United States federal or other tax laws.

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ERISA CONSIDERATIONS

Each fiduciary of a pension, profit-sharing or other employee benefit plan, a “plan,” subject to the Employee Retirement Income Security Act of 1974, as amended, “ERISA,” should consider the fiduciary standards of ERISA in the context of the plan’s particular circumstances before authorizing an investment in the preferred 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, and whether the investment would involve a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

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 the plan or account. A violation of these “prohibited transaction” rules may result in civil penalty or other liabilities under ERISA and/or an excise tax under Section 4975 of the Code for those persons, unless exemptive relief is available under an applicable statutory, regulatory 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)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code. However, governmental plans may be subject to similar provisions under applicable state laws.

Under a regulation, the “Plan Assets Regulation,” issued by the U.S. Department of Labor, the assets of Colonial Capital Trust IV would be deemed to be “plan assets” of a plan for purposes of ERISA and Section 4975 of the Code if a plan were to acquire an equity interest in Colonial Capital Trust IV and no exception was 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 law and which has no substantial equity features and specifically includes a beneficial interest in a trust.

Pursuant to the Plan Assets Regulation, the assets of Colonial Capital Trust IV would not be deemed to be “plan assets” of investing plans if, among other exceptions, at all times, less than 25% of the value of each class of equity interests in Colonial Capital Trust IV were held by plans, and entities holding assets deemed to be “plan assets” of any plan, collectively, “benefit plan investors,” or if the preferred securities were “publicly-offered securities” for purpose of the Plan Assets Regulation. No assurance can be given that the preferred securities held by benefit plan investors will be less than 25% of the total value of those preferred 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. In addition, no assurance can be given that the preferred securities would be considered to be “publicly-offered securities” under the Plan Assets Regulation. Accordingly, it is anticipated that investment in the preferred securities by plans may cause the assets of Colonial Capital Trust IV to be “plan assets” of investing plans.

Colonial BancGroup, the obligor with respect to the junior subordinated debentures held by Colonial Capital Trust IV, and its affiliates and the institutional trustee may be considered parties in interest with respect to many plans and, as a result of this transaction, may become parties in interest to plans that purchase the preferred securities. Accordingly, the purchase and/or holding of preferred securities by a plan with respect to which Colonial BancGroup, the institutional trustee or any affiliate is or becomes a party in interest may constitute or result in a prohibited transaction under ERISA or Section 4975 of the Code, unless those preferred securities are acquired pursuant to and in accordance with an applicable exemption.

The Department of Labor 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 preferred securities. These exemptions are:

(1) PTCE 84-14, an exemption for certain transactions determined by independent qualified professional asset managers;

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(2) PTCE 90-1, an exemption for certain transactions involving insurance company pooled separate accounts;

(3) PTCE 91-38, an exemption for certain transactions involving bank collective investment funds;

(4) PTCE 95-60, an exemption for transactions involving certain insurance company general accounts; or

(5) PTCE 96-23, an exemption for plan asset transactions managed by in-house asset managers.

The preferred securities may not be purchased or held by (1) any plan, (2) any entity whose underlying assets include “plan assets” by reason of any plan’s investment in the entity, a “plan asset entity,” or (3) any person investing “plan assets” of any plan, unless in each case the purchaser or holder is eligible for the exemptive relief available under any of the PTCEs listed above or another applicable similar exemption. Any purchaser or holder of the preferred securities or any interest in the preferred securities will be deemed to have represented by its purchase and holding of the preferred securities that it either,

(1) is not a plan or a plan asset entity and is not purchasing those securities on behalf of or with “plan assets” of any plan; or

(2) with respect to the purchase or holding, is eligible for the exemptive relief available under any of the PTCEs listed above or another applicable exemption with respect to the purchase or holding.

If a purchaser or holder of the preferred securities that is a plan or a plan asset entity elects to rely on an exemption other than one of the PTCEs listed above, Colonial BancGroup and Colonial Capital Trust IV may require a satisfactory opinion of counsel or other evidence with respect to the availability of that exemption for the purchase and holding.

In addition, because the assets of Colonial Capital Trust IV may be “plan assets” for ERISA purposes, the institutional trustee, as well as any other person exercising discretion with respect to the assets of Colonial Capital Trust IV, may become a fiduciary, party in interest or disqualified person with respect to investing plans. To avoid certain prohibited transactions under ERISA and the Code that could result, each investing plan, by its purchase of preferred securities, will be deemed to have directed Colonial Capital Trust IV to invest in the junior subordinated debentures, and to have consented to the appointment of the institutional trustee.

A plan fiduciary should consider whether the purchase of preferred securities could result in a delegation of fiduciary authority to the institutional trustee, and if so, whether this delegation is permissible under the plan’s governing documents.

Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt transactions, it is important that fiduciaries or other persons considering purchasing the preferred securities on behalf of or with “plan assets” of any plan consult with its ERISA counsel regarding the potential consequences if the assets of Colonial Capital Trust IV were deemed to be “plan assets” and the availability of exemptive relief under any of the PTCEs listed above or any other applicable exemption.

The sale of preferred securities to a plan is not a representation by Colonial Capital Trust IV, Colonial BancGroup, any trustee, the underwriters or any other person associated with the sale of the preferred securities that those securities meet relevant legal requirements with respect to investments by plans generally, or any particular plan.

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UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement, Colonial Capital Trust IV has agreed to sell to each of the underwriters named below, and each of the underwriters, for whom Lehman Brothers Inc. and Stifel, Nicolaus & Company, Incorporated are acting as representatives, has severally agreed to purchase, the number of preferred securities set forth opposite its name below. In the underwriting agreement, the several underwriters have agreed, subject to the terms and conditions set forth in the underwriting agreement, to purchase all the preferred securities offered hereby if any of the preferred securities are purchased. If an underwriter defaults, the underwriting agreement provides that, in certain circumstances, the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

Name of Underwriter	Number of Preferred Securities
Lehman Brothers Inc.
Stifel, Nicolaus & Company, Incorporated
Morgan Keegan & Company, Inc.
Sandler O’Neill & Partners, L.P.
Sterne, Agee and Leach, Inc.
Total	4,000,000

The underwriters propose to offer the preferred securities, in part, directly to the public at the initial public offering price set forth on the cover page of this prospectus, and, in part, to selected securities dealers at that price less a concession of $.         per preferred security. The underwriters may allow, and those dealers may re-allow, a concession not in excess of $.         per preferred security to selected brokers and dealers. After the initial public offering of the preferred securities, the initial public offering price and other selling terms may be changed.

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In view of the fact that the proceeds of the sale of the preferred securities will ultimately be used by Colonial Capital Trust IV to purchase the junior subordinated debentures of Colonial BancGroup, the underwriting agreement provides that Colonial BancGroup will pay as compensation to the underwriters arranging the investment therein of those proceeds, an amount in immediately available funds of $.         per preferred security, or $                     in the aggregate, for the accounts of the several underwriters.

The following table shows the per preferred security and total public offering price, underwriting commission to be paid by Colonial BancGroup and the proceeds to Colonial Capital Trust IV.

	Per Preferred Security		Total
Public offering price(1)	$	25.00	$	100,000,000
Underwriting commission to be paid by Colonial BancGroup	$	.	$
Proceeds to Colonial Capital Trust IV	$	25.00	$	100,000,000

(1) Plus accumulated distributions from September         , 2003, if settlement occurs after that date.

During a period of 30 days from the date of the prospectus, neither Colonial Capital Trust IV nor Colonial BancGroup will, without the prior written consent of the underwriters, directly or indirectly, sell, offer to sell, grant any option for sale of, or otherwise dispose of, any preferred securities, any security convertible into or exchangeable into or exercisable for preferred securities or junior subordinated debentures or any debt securities substantially similar to the junior subordinated debentures or equity securities substantially similar to the preferred securities, except for the securities offered by this prospectus.

Prior to this offering, there has been no public market for the preferred securities. It is anticipated that the preferred securities will be approved for listing on the NYSE, subject to official notice of issuance. Trading of the preferred securities on the NYSE is expected to commence within 30 days after the initial delivery of the preferred securities. The underwriters have advised Colonial BancGroup and Colonial Capital Trust IV that they intend to make a market in the preferred securities prior to commencement of trading on the NYSE, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the existence or liquidity of any trading market for the preferred securities.

In order to meet one of the requirements for listing the preferred securities on the NYSE, the underwriters have undertaken to sell preferred securities to a minimum of 400 beneficial owners.

Colonial Capital Trust IV and Colonial BancGroup have agreed to indemnify the underwriters against, or contribute to payments that the underwriters may be required to make in respect of, certain liabilities, including liabilities under the Securities Act of 1933.

Until the distribution of the preferred securities is completed, rules of the SEC may limit the ability of the underwriters and any selling group members to bid for and purchase the preferred securities. As an exception to these rules, the underwriters are permitted to engage in some transactions that stabilize the price of the preferred securities. Those transactions consist of bids or purchases for the purposes of pegging, fixing or maintaining the price of the preferred securities.

If the underwriters create a short position in the preferred securities in connection with the offering, i.e., if they sell more preferred securities than are set forth on the cover page of this prospectus, the underwriters may reduce the short position by purchasing preferred securities in the open market.

The underwriters may also impose a penalty bid on certain selling group members. This means that if the underwriters purchase preferred securities in the open market to reduce the underwriters’ short position or to stabilize the price of the preferred securities, they may reclaim the amount of the selling concession from the selling group members who sold those preferred securities as part of the offering.

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In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of those purchases. The imposition of a penalty bid might also have an effect on the price of a security to the extent that it were to discourage resales of the security.

None of Colonial BancGroup, Colonial Capital Trust IV or any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the preferred securities. In addition, none of Colonial BancGroup, Colonial Capital Trust IV or any of the underwriters makes any representation that the underwriters will engage in those transactions or that those transactions, once commenced, will not be discontinued without notice.

It is expected that delivery of the preferred securities will be made against payment for them on or about the date specified in the last paragraph of the cover page of this prospectus, which is the fifth business day following the date of pricing of the preferred securities (such settlement cycle being referred to in this prospectus as “T+5”). The ability to settle secondary market trades of the preferred securities effected on the date of pricing and the succeeding business day may be affected by T+5 settlement.

In the ordinary course of their business, some of the underwriters or their affiliates have engaged, and expect in the future to engage, in investment banking, commercial banking, financial advisory and/or other transactions with Colonial BancGroup and its subsidiaries, for which they have received, and may in the future receive, customary fees and commissions.

LEGAL MATTERS

Certain matters of Delaware law relating to the validity of the preferred securities will be passed upon on behalf of Colonial Capital Trust IV and Colonial BancGroup by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to Colonial Capital Trust IV and Colonial BancGroup. The validity of the junior subordinated debentures and the guarantee and certain matters relating thereto will be passed upon for Colonial BancGroup and certain United States federal income taxation matters will be passed upon for Colonial BancGroup and Colonial Capital Trust IV by Miller, Hamilton, Snider & Odom, L.L.C., Montgomery, Alabama, of which John C. H. Miller, Jr., a director of Colonial BancGroup, is a member. Such firm received fees for legal services performed in 2002 of approximately $2,148,028. John C. H. Miller, Jr. beneficially owns 98,810 shares of Colonial BancGroup common stock. Sidley Austin Brown & Wood LLP, New York, New York, will act as counsel to the underwriters.

EXPERTS

The financial statements incorporated in this Prospectus by reference to Colonial BancGroup’s Annual Report on Form 10-K for the year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing.

52

4,000,000 Preferred Securities

Colonial Capital Trust IV

        % Preferred Securities

(liquidation amount $25 per preferred security)

fully and unconditionally guaranteed by

The Colonial BancGroup, Inc.

PROSPECTUS

September     , 2003

LEHMAN BROTHERS

STIFEL, NICOLAUS & COMPANY

INCORPORATED

MORGAN KEEGAN & COMPANY, INC.

SANDLER O’NEILL & PARTNERS, L.P.

STERNE, AGEE AND LEACH, INC.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth all estimated expenses payable by us in connection with the sale of the preferred securities being registered (not including underwriting fees):

Registration fee	$	8,090
Printing expenses	$	20,000
Blue sky fees and expenses	$	2,500
Rating agency fees	$	75,000
Legal fees and expenses	$	100,000
Accounting fees and expenses	$	30,000
NYSE filing fees	$	44,300
Trustee’s fees and expenses	$	15,000
Miscellaneous	$	25,000
Total	$	317,890

Item 15. 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 directors’ insurance policy pursuant to which certain officers and all 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 The Colonial BancGroup, Inc. (“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

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opinion, or (iii) the stock holders, that indemnification is proper in the circumstances because the applicable 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 in 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.

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.

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The Indemnification Agreements would provide indemnification for liabilities arising under the Securities Act of 1933, as amended. 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 16. Exhibits.

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.

	Description
1	Form of Purchase Agreement.
4.1	Form of Junior Subordinated Indenture, filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-83390-01), effective March 11, 2002, and incorporated herein by reference.
4.2	Form of Second Supplemental Indenture.
4.3	Form of Junior Subordinated Debenture (included in Exhibit 4.2).
4.4	Certificate of Trust of Colonial Capital Trust IV.
4.5	Declaration of Trust.
4.6	Form of Amended and Restated Declaration of Trust.
4.7	Form of Preferred Security (included in Exhibit 4.6).
4.8	Form of Common Security (included in Exhibit 4.6).
4.9	Form of Preferred Securities Guarantee Agreement.
4.10	Form of Common Securities Guarantee Agreement.
5.1	Opinion of Miller, Hamilton, Snider & Odom, L.L.C.
5.2	Opinion of Richards, Layton & Finger, P.A.
8	Tax Opinion of Miller, Hamilton, Snider & Odom, L.L.C.
12	Computation of Earnings to Fixed Charges.
23.1	Consent of PricewaterhouseCoopers LLP.
23.2	Consent of Miller, Hamilton, Snider & Odom, L.L.C.
23.3	Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2).
24	Power of Attorney.
25.1	Form T-1 Statement of Eligibility under the Trust Indenture Act, as amended, for The Bank of New York, as trustee under the Amended and Restated Declaration of Trust of Colonial Capital Trust IV.
25.2	Form T-1 Statement of Eligibility under the Trust Indenture Act, as amended, for The Bank of New York, as trustee under the Indenture and Supplemental Indenture of The Colonial BancGroup, Inc.
25.3	Form T-1 Statement of Eligibility under the Trust Indenture Act, as amended, for The Bank of New York, as trustee for the Preferred Securities Guarantee Agreement.

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Item 17. Undertakings.

(a) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of our annual report pursuant to Section 13(a) or 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.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have 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 registrants of expenses incurred or paid by a director, officer or controlling person of either registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrants hereby undertake that:

(i) For purpose of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe it meets all requirements for filing on Form S-3 and has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montgomery, Alabama, on the 26th day of August, 2003.

THE COLONIAL BANCGROUP, INC.

By:  /s/    ROBERT E. LOWDER

Robert E. Lowder

Its Chairman of the Board of Directors

and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-3 has been signed below by the following persons in the capacities and on the dates indicated.

Signatures	Title	Date
/s/    ROBERT E. LOWDER     Robert E. Lowder	Chairman of the Board of Directors and Chief Executive Officer	**
/s/    W. FLAKE OAKLEY     W. Flake Oakley	President	**
/s/    SARAH H. MOORE     Sarah H. Moore	Chief Financial Officer (Principal Financial Officer)	**
/s/    SHEILA P. MOODY     Sheila P. Moody	Chief Accounting Officer (Principal Accounting Officer)	**
* Lewis E. Beville	Director	**
* William Britton	Director	**
* Jerry J. Chesser	Director	**
* Augustus K. Clements, III	Director	**
* Robert C. Craft	Director	**
* Patrick F. Dye	Director	**
* Clinton O. Holdbrooks	Director	**
* Harold D. King	Director	**
* John Ed Mathison	Director	**

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Signatures	Title	Date
* Milton E. McGregor	Director	**
* John C. H. Miller, Jr.	Director	**
* Joe D. Mussafer	Director	**
* William E. Powell, III	Director	**
* James W. Rane	Director	**
Frances E. Roper	Director
* Simuel Sippial	Director	**
* Edward V. Welch	Director	**

* The undersigned, acting pursuant to a power of attorney, has signed this Registration Statement on Form S-3 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/    SARAH H. MOORE

Sarah H. Moore

Attorney-in-Fact

** Dated: August 26, 2003

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montgomery, Alabama, on the 26th day of August, 2003.

COLONIAL CAPITAL TRUST IV

By:  /s/    SARAH H. MOORE

Sarah H. Moore

Regular Trustee

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EX-1

Exhibit 1

PURCHASE AGREEMENT

THE COLONIAL BANCGROUP, INC.

(a Delaware corporation); and

COLONIAL CAPITAL TRUST IV

(a Delaware statutory trust)

4,000,000 Preferred Securities

l% Preferred Securities

(Liquidation Amount $25 Per Preferred Security)

Dated: September l, 2003

Table of Contents

			Page
SECTION 1.	Representations and Warranties.		3
(a)	Representations and Warranties by the Company and the Trust		3
	(i)	Compliance with Registration Requirements	3
	(ii)	Incorporated Documents	4
	(iii)	Independent Accountants	4
	(iv)	Financial Statements	4
	(v)	No Material Adverse Change in Business	5
	(vi)	Maintenance of Controls and Procedures	5
	(vii)	Good Standing of the Company and its Significant Subsidiary	5
	(viii)	Existence of Trust	6
	(ix)	Authorization of Declaration	6
	(x)	Common Securities	6
	(xi)	Preferred Securities	6
	(xii)	Guarantee Agreement	7
	(xiii)	Authorization of Indenture	7
	(xiv)	Authorization of Debentures	7
	(xv)	Authorization of Agreement	7
	(xvi)	Capitalization	7
	(xvii)	Absence of Defaults and Conflicts	8
	(xviii)	Absence of Proceedings	8
	(xix)	Possession of Licenses and Permits	9
	(xx)	Investment Company Act	9
	(xxi)	Absence of Further Requirements	9
(b)	Officers’ Certificates		9
SECTION 2.	Sale and Delivery to Underwriters; Closing.		10
(a)	Preferred Securities		10
(b)	Payment		10
(c)	Denominations; Registration		10
SECTION 3.	Covenants of the Company and the Trust		11
(a)	Compliance with Securities Regulations and Commission Requests		11
(b)	Filing of Amendments		11
(c)	Delivery of Registration Statements		11
(d)	Delivery of Prospectus		11
(e)	Continued Compliance with Securities Laws		12
(f)	Blue Sky Qualifications		12
(g)	Reporting Requirements		12
(h)	Rule 158		13
(i)	DTC		13
(j)	Use of Proceeds		13
(k)	Restriction on Sale of Securities		13
(l)	Listing		13

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SECTION 4.	Payment of Expenses.	13
(a)	Expenses	13
(b)	Termination of Agreement	14
SECTION 5.	Conditions of Underwriters’ Obligations	14
(a)	Effectiveness of Registration Statement	14
(b)	Opinion of Counsel for Company	14
(c)	Opinion of Special Tax Counsel for the Trust and the Company	14
(d)	Opinion of Special Delaware Counsel for the Trust	15
(e)	Opinion of Counsel for The Bank of New York	15
(f)	Opinion of Counsel for Underwriters	15
(g)	Officers’ Certificates	15
(h)	Accountant’s Comfort Letter	16
(i)	Bring-down Comfort Letter	16
(j)	Maintenance of Rating	16
(k)	Additional Documents	16
(l)	Termination of Agreement	16
(m)	Approval of Listing	17
SECTION 6.	Indemnification.	17
(a)	Indemnification of Underwriters	17
(b)	Indemnification of Trust by Company	18
(c)	Indemnification of Trust, Company, Directors and Officers	18
(d)	Actions against Parties; Notification	18
(e)	Settlement without Consent if Failure to Reimburse	19
SECTION 7.	Contribution	19
SECTION 8.	Representations, Warranties and Agreements to Survive Delivery	20
SECTION 9.	Termination of Agreement.	20
(a)	Termination; General	20
(b)	Liabilities	21
SECTION 10.	Default by One or More of the Underwriters	21
SECTION 11.	Notices	22
SECTION 12.	Parties	22
SECTION 13.	Governing Law and Time	22
SECTION 14.	Effect of Headings	22

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SCHEDULES
	Schedule A — List of Underwriters	Sch. A-1
EXHIBITS
	Exhibit A — Form of Opinion of Company’s Counsel	A-1
	Exhibit B — Form of Opinion of Trust’s Special Delaware Counsel	B-1

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THE COLONIAL BANCGROUP, INC.

(a Delaware corporation)

COLONIAL CAPITAL TRUST IV

(a Delaware statutory trust)

4,000,000 Preferred Securities

l% Preferred Securities

(Liquidation Amount $25 Per Preferred Security)

PURCHASE AGREEMENT

September l, 2003

Lehman Brothers Inc.

Stifel, Nicolaus & Company, Incorporated  

as Representatives of the several Underwriters

c/o Lehman Brothers Inc.

745 Seventh Avenue

New York, NY 10019

Ladies and Gentlemen:

Colonial Capital Trust IV (the “Trust”), a statutory trust created under the Statutory Trust Act (the “Delaware Act”) of the State of Delaware (Chapter 38, Title 12 of the Delaware Code, 12 Del. Sections 3801 et seq.) confirms its agreement with Lehman Brothers Inc. (“Lehman”), Stifel, Nicolaus & Company, Incorporated (“Stifel”) and each of the other Underwriters named in Schedule A hereto (collectively the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Lehman and Stifel are acting as Representatives (in such capacity, the “Representatives”) with respect to the issue and sale by the Trust and the purchase by the Underwriters, acting severally and not jointly, of l% Preferred Securities (liquidation amount $25 per preferred security) in the respective numbers set forth in said Schedule A hereto (the “Preferred Securities”). The aforesaid 4,000,000 Preferred Securities (the “Preferred Securities”) are more fully described in the Prospectus (as defined below).

The Preferred Securities will be guaranteed by The Colonial BancGroup, Inc., a Delaware corporation (the “Company”), to the extent set forth in the Prospectus, with respect to distributions and amounts payable upon liquidation or redemption (the “Preferred Securities Guarantee”) pursuant to the Preferred Securities Guarantee Agreement (the “Preferred Securities Guarantee Agreement”), to be dated as of Closing Time (as defined below), executed and delivered by the Company and The Bank of New York (the “Guarantee Trustee”), a New York banking corporation, not in its individual capacity but solely as trustee, for the benefit of the holders from time to time of the Preferred Securities. The entire proceeds from the sale of the Preferred Securities will be combined with the entire proceeds from the sale by the Trust to the

Company of its common securities (the “Common Securities”) guaranteed by the Company, to the extent set forth in the Prospectus, with respect to distributions and amounts payable upon liquidation or redemption pursuant to the Common Securities Guarantee Agreement (the “Common Securities Guarantee Agreement” and, together with the Preferred Securities Agreement, the “Guarantee Agreements”), to be dated as of Closing Time, executed and delivered by the Company for the benefit of the holders from time to time of the Common Securities, and will be used by the Trust to purchase $l aggregate principal amount of l% Junior Subordinated Debentures due 2033 (the “Debentures”) issued by the Company. The Preferred Securities and the Common Securities will be issued pursuant to the Amended and Restated Declaration of Trust, to be dated as of Closing Time (the “Declaration”), among the Company, as Sponsor, The Bank of New York, as institutional trustee (the “Institutional Trustee”), The Bank of New York (Delaware), as Delaware trustee (the “Delaware Trustee”), and Kamal S. Hosein, William A. McCrary and Sarah H. Moore as regular trustees (the “Regular Trustees,” and together with the Institutional Trustee and the Delaware Trustee, the “Trustees”), and the holders from time to time of undivided beneficial interests in the assets of the Trust. The Debentures will be issued pursuant to an Indenture, dated as of March 21, 2002 (the “Base Indenture”), between the Company and The Bank of New York, as trustee (the “Indenture Trustee”), as supplemented by the Second Supplemental Indenture, to be dated as of Closing Time (the “Second Supplemental Indenture,” and together with the Base Indenture, the “Indenture”) between the Company and the Indenture Trustee. The Preferred Securities, the Preferred Securities Guarantee and the Debentures are collectively referred to herein as the “Securities.” Capitalized terms used herein without definition have the respective meanings specified in the Prospectus.

The Company and the Trust each understand that the Underwriters propose to make a public offering of the Preferred Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.

The Company and the Trust have filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (No. 333-             and 333-             - 01), including the relevant forms of prospectus and preliminary prospectus, covering the registration of the Securities under the Securities Act of 1933, as amended (the “1933 Act”), and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”). Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the 1933 Act Regulations, if applicable, and paragraph (b) of Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 (“Rule 434”) of the 1933 Act Regulations, prepare and file a term sheet (a “Term Sheet”) in accordance with the provisions of Rule 434 and Rule 424(b). The information included in such prospectus or in such Term Sheet, as the case may be, that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred to as “Rule 430A Information” or (b) pursuant to paragraph (d) of Rule 434 is referred to as “Rule 434 Information.” Any prospectus used before such registration statement became effective, and any prospectus that omitted, as applicable, the Rule 430A Information or the Rule 434 Information, that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “preliminary prospectus.” Such registration statement, including the exhibits

2

thereto, schedules thereto, if any, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, the Rule 430A Information and the Rule 434 Information, if any, at the time it became effective, is herein called the “Registration Statement.” Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the “Rule 462(b) Registration Statement,” and after such filing the term “Registration Statement” shall include the Rule 462(b) Registration Statement. The final prospectus, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for use in connection with the offering of the Preferred Securities, is herein called the “Prospectus.” If Rule 434 is relied on, the term “Prospectus” shall refer to the preliminary prospectus together with the Term Sheet and all references in this Agreement to the date of the Prospectus shall mean the date of the Term Sheet. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be, prior to the execution and delivery of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall include the filing of any document under the Securities Exchange Act of 1934, as amended (the “1934 Act”), which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be, at or after the execution and delivery of this Agreement.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company and the Trust. The Company and the Trust jointly and severally represent and warrant to each Underwriter as of the date hereof and as of the Closing Time (the “Representation Date”), and agrees with each Underwriter, as follows:

(i) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company and the Trust, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with.

At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective, at the date hereof, and at each Representation Date, the Registration Statement, the Rule 462(b) Registration Statement

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and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Trust Indenture Act of 1939 (the “1939 Act”) and the rules and regulations of the Commission under the 1939 Act (the “1939 Act Regulations”) and did not 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. Neither the Prospectus nor any amendment or supplement thereto, at the time the Prospectus or any such amendment or supplement was issued or at the Closing Time included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If Rule 434 is used, the Company and the Trust will comply with the requirements of Rule 434. The representations and warranties in this subsection shall not apply (A) to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Trust or the Company in writing by any Underwriter through Lehman expressly for use in the Registration Statement or the Prospectus or (B) to that part of the Registration Statement that constitutes the Statements of Eligibility on Form T-1 (the “Forms T-1”) under the Trust Indenture Act of the Indenture Trustee, the Institutional Trustee and the Guarantee Trustee.

The relevant forms of prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and any preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(ii) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”) and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective, at the date hereof, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Time did not and will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(iii) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Registration Statement and the Prospectus are independent public accountants as required by the 1933 Act and the 1933 Act Regulations.

(iv) Financial Statements. The financial statements included in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified. Said financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a

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consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement and no pro-forma financial statements of the Company and its subsidiaries are required to be included in the Registration Statement under Regulation S-K.

(v) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, except for dividends paid by the Company in the ordinary course of business consistent with past practice.

(vi) Maintenance of Controls and Procedures. Each of the Company and its subsidiaries has established and maintains “disclosure controls and procedures” (as defined in Rule 13a-15 and 15d-15 under the 1934 Act) that (A) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s Chief Executive officer and its Chief Financial Officer by others within those entities, particularly during the periods in which the filings made by the Company with the Commission which it may make under Section 13(a), 13(c), 14 or 15(d) of the 1934 Act are being prepared, (B) have been evaluated for effectiveness as of the end of the period reported in the Company’s most recent annual or quarterly report filed with the Commission and (C) are effective to perform the functions for which they were established. The Company’s accountants and the audit committee of the Board of Directors of the Company have been advised of (x) any significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data and (y) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls. Any material weaknesses in internal controls have been identified for the Company’s accountants. Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

(vii) Good Standing of the Company and its Significant Subsidiary. Each of the Company and its subsidiary, Colonial Bank, N.A., has been duly organized and is validly existing as a corporation and as a national association, respectively, in good standing under the laws of the jurisdiction where it is chartered or organized, with full corporate power and authority to own its properties and conduct its business as described in the Prospectus and enter into and perform its obligations under the Purchase Agreement and the transactions contemplated thereunder and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business (except where the failure to so qualify or be in good standing would not have a Material Adverse Effect). All of the issued and outstanding capital stock of Colonial Bank, N.A. has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, except that 21,750 shares of Colonial Bank, N.A. stock are pledged to SunTrust Bank pursuant to that certain Intangible Personal Property Security Agreement, dated as of June 2, 2003, as security for Colonial Bank, N.A.’s $25 million line of credit with SunTrust Bank. None of the outstanding shares of capital stock of Colonial Bank, N.A. was issued in violation of the preemptive or similar rights of any securityholder of Colonial Bank. N.A. Other than Colonial Bank, N.A., there is no other “significant subsidiary” (as defined in Rule 1-02 of Regulation S-X), individually or in the aggregate, of the Company. The Company is duly registered as a financial holding company under the Bank Holding Company Act of 1956, as amended.

(viii) Existence of Trust. The Trust has been duly created and is validly existing in good standing as a statutory trust under the Delaware Act, is and will be treated as a “grantor trust” for federal income tax purposes under existing law, has the statutory trust power and authority to conduct its business as presently conducted and as described in the Prospectus and is not required to be authorized to do business in any other jurisdiction.

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(ix) Authorization of Declaration. The Declaration has been duly authorized by the Company and duly qualified under the 1939 Act and, when validly executed and delivered by the Company and the Regular Trustees, and assuming the due authorization, execution and delivery of the Declaration by the Delaware Trustee and the Institutional Trustee, the Declaration will constitute a valid and binding obligation of the Company and the Regular Trustees, enforceable against the Company and the Regular Trustees in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(x) Common Securities. The Common Securities have been duly authorized by the Declaration and, when issued and delivered by the Trust to the Company in accordance with the terms of the Declaration and against payment therefor as described in the Prospectus, will be validly issued and (subject to the terms of the Declaration) fully paid and nonassessable undivided beneficial interests in the assets of the Trust. The issuance of the Common Securities is not subject to preemptive or other similar rights. No holder of Common Securities will be subject to personal liability by reason of being such a holder. At the Closing Time, all of the issued and outstanding Common Securities of the Trust will be directly owned by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.

(xi) Preferred Securities. The Preferred Securities have been duly authorized by the Declaration and, when authenticated in the manner provided for in the Declaration and issued and delivered pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and (subject to the terms of the Declaration) fully paid and nonassessable undivided beneficial interests in the assets of the Trust entitled to the benefits of the Declaration and the Preferred Securities Guarantee Agreement. The issuance of the Preferred Securities is not subject to preemptive or other similar rights. Holders of Preferred Securities 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.

(xii) Guarantee Agreement. The Guarantee Agreement has been duly authorized by the Company and duly qualified under the 1939 Act and, when validly executed and delivered by the Company, and assuming due authorization, execution and delivery of the Preferred Securities Guarantee Agreement by the Guarantee Trustee, will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Preferred Securities Guarantee Agreement has been duly qualified under the 1939 Act.

(xiii) Authorization of Indenture. The Indenture has been duly authorized by the Company and duly qualified under the 1939 Act and, when duly executed and delivered by the Company and assuming the due authorization, execution and delivery of the Indenture by the

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Indenture Trustee, will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(xiv) Authorization of Debentures. The Debentures have been duly authorized by the Company and, when executed, authenticated, issued and delivered in the manner provided for in the Indenture and sold and paid for as contemplated in this Agreement, will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(xv) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by each of the Company and the Trust.

(xvi) Capitalization. The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus in the column entitled “Actual” under the caption “Capitalization” (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to the Company’s Registration Statement on Form S-4 (No. 333-107697), filed with the SEC on August 6, 2003 and declared effective August 14, 2003, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus). The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company.

(xvii) Absence of Defaults and Conflicts. None of the Company, its subsidiaries or the Trust is in violation of its charter or by-laws or other organizational documents, or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company, any such subsidiary or the Trust is a party or by which any of them may be bound, or to which any of the property or assets of the Company, any such subsidiary or the Trust is subject, except for such defaults that would not result in a Material Adverse Effect. The execution and delivery by the Company and the Trust of, and the performance by the Company and the Trust of their obligations under, this Agreement, the Declaration, the Preferred Securities Guarantee Agreement, the Indenture and the Debentures, the issuance and delivery by the Trust of the Common Securities and Preferred Securities, the consummation of the sale of the Preferred Securities and the issuance and sale by the Company of the Debentures to the Trust and the fulfillment of the terms herein and therein contemplated do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or result in a breach of any of the terms or provisions of, or constitute a default under (in each case material to the Company and its subsidiaries (including the Trust)

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considered as a whole or as to the Trust separately), any indenture, mortgage, deed of trust, loan agreement, guarantee, lease, financing agreement or other similar agreement or instrument to which the Company or any of its subsidiaries (including the Trust) is a party or by which the Company or any of its subsidiaries (including the Trust) is bound or to which any of the property or assets of the Company or any of its subsidiaries (including the Trust) is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or the Declaration of the Trust, nor will such actions result in any violation (in each case material to the Company and its subsidiaries (including the Trust) considered as a whole or as to the Trust separately) of any statute or any order, rule or regulation of any court or regulatory authority or other governmental body having jurisdiction over the Trust or the Company or any of its subsidiaries or any of their properties. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for, and the absence of which would materially affect, the performance by the Company and the Trust of their obligations under this Agreement, the Declaration, the Preferred Securities Guarantee Agreement and the Indenture and the issuance and sale of the Preferred Securities and the Debentures, except such approvals as will be obtained under the 1933 Act, the 1934 Act or the 1939 Act and as may be required by the securities or Blue Sky laws of the various states or the securities laws of non-U.S. jurisdictions in connection with the sale of the Preferred Securities.

(xviii) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Trust, threatened, against or affecting the Company or any subsidiary of the Company (including the Trust), which is required to be disclosed in the Registration Statement (other than as disclosed therein), or which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets of the Company and its subsidiaries taken as a whole or the consummation of the transactions contemplated in this Agreement or the performance by the Company or the Trust of its obligations hereunder. The aggregate of all pending legal or governmental proceedings to which the Company or any subsidiary is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect.

(xix) Possession of Licenses and Permits. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except for such Governmental Licenses the absence of which would not cause a Material Adverse Effect. The Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply could not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which could, singly or in the

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aggregate, if the subject of an unfavorable decision, ruling or finding, reasonably be expected to result in a Material Adverse Effect.

(xx) Investment Company Act. Neither the Company nor the Trust is, and upon the issuance and sale of the Preferred Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus neither will be, an “investment company” or an entity “controlled” by an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

(xxi) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company or the Trust of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, the Declaration or the Indenture or for the execution, delivery or performance of this Agreement, the Declaration, the Preferred Securities, the Preferred Securities Guarantee Agreement, the Indenture or the Debentures, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws and except for the qualification of the Declaration, the Preferred Securities Guarantee Agreement and the Indenture under the 1939 Act.

(b) Officers’ Certificates. Any certificate signed by any officer of the Company or the Trust delivered to Underwriters or to counsel for the Underwriters shall be deemed a representation and warranty by the Company or the Trust, respectively, to each Underwriter as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto.

SECTION 2. Sale and Delivery to Underwriters; Closing.

(a) Preferred Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Trust agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the purchase price of $25 per Preferred Security, the number of Preferred Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Preferred Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, subject, in each case, to such adjustments among the Underwriters as they in their sole discretion shall make to eliminate any sales or purchases of fractional securities.

(b) Payment. As compensation to the Underwriters for their commitments hereunder and in view of the fact that the proceeds of the sale of the Preferred Securities will be used to purchase the Debentures, the Company hereby agrees to pay at the Closing Time to the Underwriters a commission of $0.7875 per Preferred Security purchased by the Underwriters. Payment of the purchase price for, and delivery of certificates for, the Preferred Securities shall be made at the offices of Sidley Austin Brown & Wood LLP, 787 Seventh Avenue, New York, New York 10019, or at such other place as shall be agreed upon by the Underwriters, the Company and the Trust, at 9:00 A.M. (Eastern time) on the third (fourth, if

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the pricing occurs after 4:30 p.m. (Eastern time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Underwriters, the Company and the Trust (such time and date of payment and delivery being herein called the “Closing Time”).

Payment shall be made to the Trust by wire transfer of immediately available funds to the order of the Trust, against delivery to the Underwriters of certificates for the Preferred Securities to be purchased by them. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for the Preferred Securities which it has agreed to purchase. Lehman, individually and not as Representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Preferred Securities to be purchased by any Underwriter whose funds have not been received by the Closing Time but such payment shall not relieve such Underwriter from its obligations hereunder.

At the Closing Time the Company will pay, or cause to be paid, the commission payable to the Underwriters at such time under this Section 2 to Lehman on behalf of the Underwriters by wire transfer of immediately available funds.

(c) Denominations; Registration. Certificates for the Preferred Securities shall be in such denominations and registered in such names as the Representatives may request in writing at least two full business days before the Closing Time. The certificates for the Preferred Securities will be made available for examination and packaging by the Representatives in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time.

SECTION 3. Covenants of the Company and the Trust. The Company and the Trust jointly and severally covenant with each Underwriter as follows:

(a) Compliance with Securities Regulations and Commission Requests. The Company and the Trust, subject to Section 3(b), will comply with the requirements of Rule 424, Rule 430A or Rule 434, as applicable, and will notify the Underwriters immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, any prospectus, or of the suspension of the

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qualification of the Preferred Securities for offering or sale in any jurisdiction or of the initiation or threatening of any proceedings for any of such purposes. The Company and the Trust will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company and the Trust will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

(b) Filing of Amendments. The Company and the Trust will give the Representatives notice of their intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Representatives with copies of any such documents to, and consult with, the Representatives and their counsel within a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Representatives shall reasonably object.

(c) Delivery of Registration Statements. The Company has furnished or will deliver to the Representatives and counsel for the Representatives, without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith and, upon request, documents incorporated or deemed to be incorporated by reference therein), and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Representatives. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(d) Delivery of Prospectus. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will deliver to each Underwriter, without charge, as many copies of the Prospectus and any amendment or supplement thereto as such Underwriter reasonably requests, and the Company and the Trust hereby consent to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(e) Continued Compliance with Securities Laws. The Company and the Trust will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. If, at any time when a prospectus is required by the

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1933 Act to be delivered in connection with sales of the Preferred Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters and for the Company or the Trust, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company and the Trust will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.

(f) Blue Sky Qualifications. The Company and the Trust will each use its best efforts, in cooperation with the Underwriters, to qualify the Preferred Securities and the Debentures for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Underwriters may designate and to maintain such qualifications in effect for a period of not less than one year from the later of the effective date of the Registration Statement and any Rule 462(b) Registration Statement; provided, however, that neither the Company nor the Trust shall be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Preferred Securities and the Debentures have been so qualified, the Company and the Trust will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the date hereof. The Company and the Trust will also supply the Underwriters with such information as is necessary for the determination of the legality of the Preferred Securities for investment under the laws of such jurisdictions as the Underwriters may request.

(g) Reporting Requirements. The Company and the Trust, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations.

(h) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

(i) DTC. The Trust and the Company will cooperate with the Underwriters and use their best efforts to permit the Preferred Securities and, if applicable, the Debentures, to be eligible for clearance and settlement through the facilities of The Depository Trust Company.

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(j) Use of Proceeds. The Trust and the Company will use the proceeds referred to in the Prospectus under “Use of Proceeds” in the manner described therein.

(k) Restriction on Sale of Securities. During a period of 30 days from the date of the Prospectus, neither the Company nor the Trust will, without the prior written consent of Lehman, directly or indirectly, sell, offer to sell, grant any option for sale of, or otherwise dispose of, any Preferred Securities, any security convertible into or exchangeable into or exercisable for Preferred Securities or Debentures or any debt securities substantially similar to the Debentures or equity securities substantially similar to the Preferred Securities. The foregoing sentence shall not apply to the Preferred Securities or Debentures to be sold hereunder.

(l) Listing. The Company will use its best efforts to effect the listing of the Preferred Securities and, if applicable, the Debentures, on the New York Stock Exchange.

SECTION 4. Payment of Expenses.

(a) Expenses. The Company will pay all expenses incident to the performance of its and the Trust’s obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Preferred Securities, (iii) the preparation, issuance and delivery of the certificates for the Preferred Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Preferred Securities to the Underwriters, (iv) the fees and disbursements of the Company’s and the Trust’s counsel, accountants and other advisors, (v) the qualification of the Preferred Securities and the Debentures under state securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, if any, (vi) the printing and delivery to the Underwriters of copies of any preliminary prospectus, any Term Sheet and the Prospectus and any amendments or supplements thereto, (vii) the printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, if any, (viii) the fees and expenses of any transfer agent or registrar for the Preferred Securities, (ix) the fees and expenses of the Indenture Trustee, the Institutional Trustee and the Guarantee Trustee, including the fees and disbursements of their counsel, (x) any fees payable in connection with the rating of the Preferred Securities and the Debentures, (xi) the cost and charges associated with the approval of the Preferred Securities by The Depository Trust Company for clearance and settlement, (xii) any filing fees required by the National Association of Securities Dealers, Inc., and (xiii) the fees and expenses incurred in connection with the listing of the Preferred Securities and, if applicable, the Debentures on the New York Stock Exchange.

(b) Termination of Agreement. If this Agreement is terminated in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.

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SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company and the Trust contained herein or in certificates of any officer or representative of the Company or any Trustee delivered pursuant to the provisions hereof, to the performance by the Company and the Trust of their respective covenants and other obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus shall have been filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing such information shall have been filed and declared effective) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b).

(b) Opinion of Counsel for Company. At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Miller, Hamilton, Snider & Odom, L.L.C., counsel for the Company, together with signed or reproduced copies of such letter for each of the other Underwriters, to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(c) Opinion of Special Tax Counsel for the Trust and the Company. At the Closing Time, the Representatives shall have received an opinion, dated the Closing Time, of Miller, Hamilton, Snider & Odom, L.L.C., special tax counsel to the Trust and the Company, that (i) the Debentures will be classified for United States federal income tax purposes as indebtedness of the Company, (ii) the Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation and (iii) although the discussion set forth in the Prospectus under the heading “United States Federal Income Taxation” does not purport to discuss all possible United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities, such discussion constitutes, in all material respects, a fair and accurate summary of the United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities under current law. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(d) Opinion of Special Delaware Counsel for the Trust. At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Richards, Layton & Finger, P.A., special Delaware counsel to the Trust and the Company, together with signed or reproduced copies of such letter for each of the Underwriters, to the effect set forth in

14

Exhibit B hereto and to such further effect as counsel to the Underwriters may reasonably request.

(e) Opinion of Counsel for The Bank of New York. At the Closing Time, the Representatives shall have received an opinion, dated the Closing Time, of Emmit, Marvin & Martin, LLP, counsel to The Bank of New York, as Institutional Trustee, Indenture Trustee and Guarantee Trustee, in form and substance satisfactory to the Underwriters.

(f) Opinion of Counsel for Underwriters. At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Sidley Austin Brown & Wood LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to the validity of the Securities, the disclosure in the Registration Statement and the Prospectus and such other matters as the Underwriters may reasonably request. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States, upon the opinions of counsel satisfactory to the Underwriters. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(g) Officers’ Certificates. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus, (A) any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the Chairman of the Board and Chief Executive Officer or President of the Company and of the Chief Financial Officer of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties contained herein are true and correct with the same force and effect as though expressly made at and as of the Closing Time (except for representations or warranties which by their terms speak as of a different date or dates), (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or are, to the best of the Company’s knowledge, threatened by the Commission, or (B) any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Trust, and the Representatives shall have received a certificate of a Regular Trustee of the Trust, dated the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties contained herein are true and correct with the same force and effect as though expressly made at and as of the Closing Time (except for representations or warranties which by their terms speak as of a different date or dates), (iii) the Trust has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or are, to the best of the Trust’s knowledge, threatened by the Commission.

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(h) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the Representatives shall have received from PricewaterhouseCoopers LLP a letter dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and financial information contained in the Registration Statement and the Prospectus.

(i) Bring-down Comfort Letter. At the Closing Time, the Representatives shall have received from PricewaterhouseCoopers LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (h) of this Section 5, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

(j) Maintenance of Rating. At the Closing Time, the Preferred Securities shall be rated l by Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., l by Moody’s Investors Service, Inc., and l by Fitch, Inc., and the Company shall have delivered to the Underwriters a letter, dated the Closing Time, from each such rating agency, or other evidence satisfactory to the Representatives, confirming that the Preferred Securities have such rating; and since the execution of this Agreement, there shall not have occurred a downgrading in or withdrawal of the rating assigned to the Preferred Securities or any of the Company’s preferred or debt securities by any “nationally recognized statistical rating agency,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization shall have publicly announced that it has under surveillance or review its rating of the Preferred Securities or any of the Company’s preferred or debt securities.

(k) Additional Documents. At the Closing Time and at each Date of Delivery, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to render the opinion referred to in Section 5(f), or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and Trust in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Underwriters.

(l) Termination of Agreement. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriters by notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6 and 7 shall survive any such termination and remain in full force and effect.

(m) Approval of Listing. At the Closing Time, the Preferred Securities and, if applicable, the Debentures shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance.

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SECTION 6. Indemnification.

(a) Indemnification of Underwriters. Each of the Company and the Trust jointly and severally agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission provided that (subject to Section 6(e) below) any such settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Lehman expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto).

(b) Indemnification of Trust by Company. The Company agrees to indemnify the Trust against all loss, liability, claim, damage and expense whatsoever as due from the Trust under Section 6(a) hereunder.

(c) Indemnification of Trust, Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company and the Trust, the Company’s directors, each of the Company’s officers and Trustees of the Trust who signed the Registration

17

Statement, and each person, if any, who controls the Company and the Trust within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information and Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Lehman expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus, if any, or the Prospectus (or any amendment or supplement thereto).

(d) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by the Representatives, and, in the case of parties indemnified pursuant to Section 6(c) above, counsel to the indemnified parties shall be selected by the Company, in each case reasonably acceptable to the indemnifying party. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding 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.

(e) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

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SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein; then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Trust, on the one hand, and the Underwriters, on the other hand, from the offering of the Preferred Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Trust, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions, which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company and the Trust, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Preferred Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Preferred Securities pursuant to this Agreement (before deducting expenses) indirectly received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of the Preferred Securities as set forth on such cover.

The relative fault of the Company and the Trust, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Trust or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company, the Trust and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters 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 above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Preferred Securities set forth opposite their respective names in Schedule A hereto and not joint.

Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities

19

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 any 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 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company and Trustee of the Trust who signed the Registration Statement, and each person, if any, who controls the Company or the Trust within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company and the Trust. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Preferred Securities set forth opposite their respective names in Schedule A hereto and not joint.

SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or the Trustees of the Trust or any of its other subsidiaries submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Preferred Securities to the Underwriters.

SECTION 9. Termination of Agreement.

(a) Termination; General. The Representatives may terminate this Agreement, by notice to the Company and the Trust, at any time at or prior to the Closing Time if (i) there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (ii) there has occurred any material adverse change in the financial markets in the United States, any outbreak of hostilities or escalation thereof, including, without limitation, an act of terrorism, or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the Preferred Securities or to enforce contracts for the sale of the Preferred Securities, (iii) trading in any securities of the Company has been suspended or materially limited by the Commission or the New York Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or a material disruption has occurred in commercial

20

banking or securities settlement or clearance services in the United States or (iv) a banking moratorium has been declared by either Federal, New York or Alabama authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6 and 7 shall survive such termination and remain in full force and effect.

SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time to purchase the Preferred Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:

(a) if the number of Defaulted Securities does not exceed 10% of the number of Preferred Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the number of Preferred Securities to be purchased on such date, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.

SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Representatives shall be directed to Lehman at Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, attention of Fixed Income Syndicate (with a copy to the General Counsel); notices to the Trust shall be directed to it at The Bank of New York, c/o The Bank of New York Trust Company of Florida, N.A., 10161

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Centurion Parkway, Jacksonville, Florida 32256, attention of Corporate Trust Administration and notices to the Company shall be directed to it at The Colonial BancGroup, Inc., One Commerce Street, P.O. Box 1108, Montgomery, Alabama 36101-1108, attention of William A. McCrary, General Counsel.

SECTION 12. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company and the Trust and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company and the Trust and their respective successors and the controlling persons and officers, trustees and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Trust and their respective successors, and said controlling persons and officers, trustees and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Preferred Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

SECTION 13. Governing Law and Time. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of laws principles thereof. Specified times of day refer to New York City time.

SECTION 14. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Trust a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Trust in accordance with its terms.

Very truly yours,
THE COLONIAL BANCGROUP, INC.
By:
	Name: Sarah H. Moore
	Title: Chief Financial Officer
COLONIAL CAPITAL TRUST IV
By:
	Name: William A. McCrary
	Title: Regular Trustee

CONFIRMED AND ACCEPTED,

as of the date first above written:

LEHMAN BROTHERS INC.

STIFEL, NICOLAUS & COMPANY, INCORPORATED

For themselves and as Representatives of the several Underwriters

named in Schedule A hereto.

By:	LEHMAN BROTHERS INC.
By:
	Authorized Signatory
By:	STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:
	Authorized Signatory

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SCHEDULE A

Name of Underwriter	Number of Preferred Securities
Lehman Brothers Inc.
Stifel, Nicolaus & Company, Incorporated
Morgan Keegan & Company, Inc.
Sandler O’Neill & Partners, L.P.
Sterne, Agee and Leach, Inc.
Total	4,000,000

Sch. A-1

Exhibit A

Form of opinion, dated as of Closing Time, of Miller, Hamilton, Snider & Odom, L.L.C., counsel for the Company and the Trust, substantially to the effect that:

(i) The Company has been duly incorporated and is validly existing as a corporation and in good standing under the laws of the State of Delaware, and is duly registered as a financial holding company under the Bank Holding Company Act of 1956, as amended.

(ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Purchase Agreement and the transactions contemplated thereunder.

(iii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

(iv) The Company has 200,000,000 shares of its common stock authorized, and, as of June 30, 2003, 124,255,988 shares of common stock were issued and outstanding; all of the issued and outstanding capital stock of the Company has been duly authorized and validly issued and is fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company.

(v) Colonial Bank, N.A. has been duly organized and is validly existing as a national association in good standing under the laws of the United States, has full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; all of the issued and outstanding capital stock of Colonial Bank, N.A. has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, [and except that such shares act as security for the Company’s $25 million line of credit pursuant to a Revolving Credit Facility Letter, dated [July 21, 1999], between the Company and SunTrust Bank, Atlanta,] to our knowledge such shares are free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the outstanding shares of capital stock of Colonial Bank, N.A. was issued in violation of the preemptive or similar rights of any securityholder of Colonial Bank, N.A.

(vi) The Purchase Agreement has been duly authorized by the Company and has been duly executed and delivered by each of the Company and the Trust.

(vii) The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy,

A-1

insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(viii) The Debentures have been duly authorized, executed and delivered by the Company and, when the Debentures have been duly authenticated by the Indenture Trustee in accordance with the provisions of the Indenture and delivered to and paid for by the Trust, will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(ix) The Declaration has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery of the Declaration by The Bank of New York and The Bank of New York (Delaware), constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(x) The Guarantee Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(xi) The Indenture, the Declaration and the Guarantee Agreement have each been duly qualified under the 1939 Act.

(xii) Based solely upon our review of the Delaware General Corporation Law and the Company’s Amended and Restated Certificate of Incorporation and Bylaws, no holder of any outstanding share of capital stock of the Company is entitled to any preemptive or similar rights to subscribe for the Preferred Securities or the Debentures.

(xiii) The documents incorporated by reference in the Prospectus (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which such counsel need express no opinion), when they were filed with the Commission complied as to form in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations.

A-2

(xiv) The statements made in (1) the Prospectus under the captions “Summary Information—Q&A,” “Risk Factors,” “Regulation and Supervision,” “Description of the Preferred Securities,” “Description of the Junior Subordinated Debentures,” “Description of the Preferred Securities Guarantee” and “Effect of Obligations Under the Preferred Securities, the Guarantee and Junior Subordinated Debentures,” (2) the Registration Statement under Item 15., (3) the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, and (4) the Company’s Quarterly Reports on Form 10-Q for the periods ending March 31, 2003 and June 30, 2003, under the caption “Item 1. Business—Certain Regulatory Considerations,” insofar as such statements purport to summarize certain provisions of the Preferred Securities, the Common Securities, the Debentures, the Indenture, the Declaration, the Guarantee Agreement and the Articles of Incorporation and By-Laws of the Company or to the extent that they constitute matters of law or legal conclusions, have been reviewed by such counsel and are correct in all material respects.

(xv) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (other than under the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may be required under the securities or blue sky laws of the various states, as to which we need express no opinion, and except for the qualification of the Declaration, the Indenture and the Guarantee Agreement under the 1939 Act, which has been effected) is necessary or required in connection with the due authorization, execution and delivery of the Purchase Agreement or the due execution, delivery or performance of the Indenture, the Declaration and the Guarantee Agreement by the Company or for the offering, issuance, sale or delivery of the Securities.

(xvi) The execution, delivery and performance of the Purchase Agreement, the Indenture, the Declaration, the Guarantee Agreement and the Securities and the consummation of the transactions contemplated in the Purchase Agreement and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company and the Trust with their obligations under the Purchase Agreement, the Indenture, the Declaration, the Guarantee Agreement, the Debentures and the Preferred Securities do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidies (including the Trust) that would result in a Material Adverse Effect pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to us, to which the Company or any such subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any such subsidiary is subject, nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary of the Company or of the Declaration or other organizational documents of the Trust, or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries (including the Trust) or any of their respective property or assets.

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(xvii) Neither the Company nor the Trust is, and upon the issuance and sale of the Preferred Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus neither will be, required to be registered under the 1940 Act.

(xviii) There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of such counsel, threatened, against or affecting the Company or any of its subsidiaries (including the Trust), of a character which is required to be disclosed in the Registration Statement which is not so disclosed or which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in the Purchase Agreement or the performance by the Company of its obligations thereunder or contemplated thereunder

(xix) The Registration Statement was declared effective under the 1933 Act on September l, 2003; any required filing of the Prospectus pursuant to Rule 424(b) under the 1933 Act has been made in the manner and within the time period required by Rule 424(b) and, to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose is pending or threatened by the Commission.

(xx) To the knowledge of such counsel, no holders of securities of the Company have rights to the registration of such securities under the Registration Statement.

(xxi) The Registration Statement, as of its effective date, and the Prospectus, as of its date, complied as to form in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, except that in each case such counsel need not express an opinion as to the financial statements, schedules and other financial data included therein or omitted therefrom or the exhibits to the Registration Statement.

Additionally, in giving its opinion, such counsel shall state that nothing has come to the attention of such counsel that would lead it to believe that the Registration Statement or any post-effective amendment thereto (except for financial statements and supporting schedules and other financial data included therein or omitted therefrom and for the Form T-1s, as to which such counsel need make no statement), at the time the Registration Statement or any post-effective amendment thereto became effective or at the date of the Purchase Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto (except for financial statements and supporting schedules and other financial data included therein or omitted therefrom, as to which such counsel need make no statement), at the time the Prospectus was issued, at the time any such amended or supplemented prospectus was issued or at the Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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Exhibit B

Form of opinion, dated as of Closing Time, of Richards, Layton & Finger, P.A., special Delaware counsel for the Trust, substantially to the effect that:

(i) The Trust has been duly created and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act (12 Del. C. Sections 3801, et seq.) (the “Act”). All filings required under the laws of the State of Delaware with respect to the creation and valid existence of the Trust as a statutory trust have been made. Under the Declaration and the Act, the Trust has the requisite trust power and authority to conduct its business as described in the Prospectus.

(ii) The Declaration constitutes a legal, valid and binding obligation of the Company and each of the Trustees, and is enforceable against the Company and each of the Trustees, in accordance with its terms.

(iii) The Preferred Securities have been duly authorized for issuance by the Declaration, and, when duly issued, executed, authenticated, delivered and paid for in accordance with the Declaration and the Purchase Agreement, will be validly issued, fully paid and, subject to the qualifications set forth in paragraph 4 below, nonassessable undivided beneficial interests in the assets of the Trust and will entitle the Preferred Security Holders to the benefits of the Declaration. The issuance of the Preferred Securities is not subject to preemptive or other similar rights under the Act or the Declaration.

(iv) Under the Declaration and the Act, the Preferred Security Holders, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; such counsel may express no opinion with respect to the liability of any Preferred Security Holder who is, was or may become a named trustee of the Trust. Such counsel may note that the Preferred Security Holders may be obligated, pursuant to the Declaration, (A) to provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Preferred Security Certificates and the issuance of replacement Preferred Security Certificates, and (B) to provide security or indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and powers under the Declaration.

(v) The Common Securities have been duly authorized for issuance by the Declaration and, when duly issued, executed, delivered and paid for in accordance with the Declaration, will be validly issued and fully paid undivided beneficial interests in the assets of the Trust and will entitle the Common Securityholder to the benefits of the Declaration. The issuance of the Common Securities is not subject to preemptive or other similar rights under the Act or the Declaration.

(vi) Under the Declaration and the Act, the Common Securityholder, as a beneficial owner 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; such counsel may express no opinion with respect to the liability of the

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Common Securityholder to the extent that it is, was or may become a named trustee of the Trust. Such counsel may note that the Common Securityholder may be obligated, pursuant to the Declaration to make payments or to provide indemnity or security as set forth in the Declaration.

(vii) Under the Declaration and the Act, the Trust has the requisite trust power and authority to execute and deliver the Purchase Agreement and to perform its obligations under the Purchase Agreement and to consummate the transactions contemplated thereby. Under the Declaration and the Act, the execution and delivery by the Trust of the Purchase Agreement, and the performance of its obligations thereunder, have been duly authorized by all requisite trust action on the part of the Trust.

(viii) Such counsel has reviewed the statements made in the Prospectus under the captions “Colonial Capital Trust IV” and “Description of the Preferred Securities” and, insofar as they contain statements of Delaware law, such statements are fairly presented.

The opinions expressed in paragraph (ii), (iii) and (v) above are subject, as to enforcement, to the effect upon the Declaration of (i) bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation, fraudulent conveyance and transfer, and other similar laws relating to or affecting the rights and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of applicable public policy on the enforceability of provisions relating to indemnification or contribution.

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EX-4.2

Exhibit 4.2

SECOND SUPPLEMENTAL INDENTURE

between

THE COLONIAL BANCGROUP, INC.

and

THE BANK OF NEW YORK

Dated as of September l, 2003

Table of Contents*

		Page
ARTICLE I
DEFINITIONS
SECTION 1.1.	Definition of Terms.	1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1.	Designation and Principal Amount.	3
SECTION 2.2.	Maturity.	3
SECTION 2.3.	Form and Payment.	3
SECTION 2.4.	Global Debenture.	3
SECTION 2.5.	Interest.	5
SECTION 2.6.	Denomination.	5
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1.	Optional Redemption.	6
SECTION 3.2.	Redemption Procedures.	6
SECTION 3.3.	No Sinking Fund.	6
SECTION 3.4.	Required Approval.	6
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1.	Extension of Interest Payment Period.	6
SECTION 4.2.	Notice of Extension.	7
SECTION 4.3.	Limitation of Transactions.	7
ARTICLE V
EXPENSES
SECTION 5.1.	Payment of Expenses.	8
SECTION 5.2.	Payment Upon Resignation or Removal.	9

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ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1.	Listing on an Exchange.	9
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1.	Form of Debenture.	9
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1.	Original Issue of Debentures.	15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1.	Ratification.	16
SECTION 9.2.	Trustee Not Responsible for Recitals.	16
SECTION 9.3.	Separability.	16
SECTION 9.4.	Counterparts.	16
SECTION 9.5.	Governing Law.	16

* THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A PART OF THIS SECOND SUPPLEMENTAL INDENTURE.

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SECOND SUPPLEMENTAL INDENTURE, dated as of September l, 2003 (the “Second Supplemental Indenture”), between The Colonial BancGroup, Inc., a Delaware corporation (the “Company”), and The Bank of New York, a New York banking corporation, as trustee (the “Trustee”).

WHEREAS, the Company executed and delivered the Indenture, dated as of March 21, 2002, between the Company and the Trustee (the “Original Indenture” and together with the First Supplemental Indenture, dated as of March 21, 2002, between the Company and the Trustee, and this Second Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s debt securities from time to time in one or more series as might be determined by the Company under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture;

WHEREAS, pursuant to the terms of the Original Indenture, the Company desires to provide for the establishment of a new series of unsecured debt securities to be known as its l% Junior Subordinated Debentures due 2033 (the “Debentures”), the form and substance of such Debentures and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Second Supplemental Indenture;

WHEREAS, the Company and Colonial Capital Trust IV, a Delaware statutory trust (the “Trust”), has offered to the public up to $100,000,000 aggregate liquidation amount of its l% Preferred Securities (the “Preferred Securities”), representing preferred undivided beneficial interests in the assets of the Trust, and proposes to invest the proceeds from such offering, together with the proceeds of the issuance and sale by the Trust to the Company of up to $25 aggregate liquidation amount of its l% Common Securities (the “Common Securities”, and together with the Preferred Securities, the “Trust Securities”), in up to $l aggregate principal amount of the Debentures; and

WHEREAS, the Company has requested that the Trustee execute and deliver this Second Supplemental Indenture, and all requirements necessary to make this Second Supplemental Indenture a valid instrument in accordance with its terms, and to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company have been performed, and the execution and delivery of this Second Supplemental Indenture has been duly authorized in all respects.

NOW THEREFORE, in consideration of the purchase and acceptance of the Debentures by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Debentures and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Definition of Terms.

Unless the context otherwise requires:

(a) a term defined in the Indenture or, if not defined in the Indenture, the Declaration has the same meaning when used in this Second Supplemental Indenture;

(b) a term defined anywhere in this Second Supplemental Indenture has the same meaning throughout;

(c) the singular includes the plural and vice versa;

(d) a reference to a Section or Article is to a Section or Article of this Second Supplemental Indenture;

(e) headings are for convenience of reference only and do not affect interpretation; and

(f) the following terms have the meanings given to them in this Section 1.1(f):

“Additional Interest” shall have the meaning set forth in Section 2.5(c).

“Compound Interest” shall have the meaning set forth in Section 2.5(d).

“Coupon Rate” shall have the meaning set forth in Section 2.5(a).

“Creditor” shall have the meaning set forth in Section 5.1.

“Declaration” means the Amended and Restated Declaration of Trust of Colonial Capital Trust IV, a Delaware statutory trust, dated as of September l, 2003.

“Deferred Interest” shall have the meaning set forth in Section 4.1.

“Dissolution Event” means the dissolution and subsequent liquidation of the Trust and distribution of the Debentures held by the Institutional Trustee pro rata to the registered holders of the Trust Securities in accordance with the Declaration.

“Extension Period” shall have the meaning set forth in Section 4.1.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

“Global Debenture” shall have the meaning set forth in Section 2.4(a).

“Holder” means any person in whose name at the time a Debenture is registered on the Security Register.

“Interest Payment Date” shall have the meaning set forth in Section 2.5(a).

“Redemption Price” shall have the meaning set forth in Section 3.1.

“Stated Maturity” means the date on which the Debentures mature and on which the principal shall be due and payable, together with all accrued and unpaid interest, including

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Compound Interest and Additional Interest, if any, thereon, which date shall be [October] 1, 2033.

ARTICLE II

GENERAL TERMS AND CONDITIONS OF THE DEBENTURES

SECTION 2.1. Designation and Principal Amount.

There is hereby authorized a series of Securities designated as the “l% Junior Subordinated Debentures due 2033”, in aggregate principal amount of up to $103,092,800.

SECTION 2.2. Maturity.

The Debentures shall mature on [October] 1, 2033; provided, however, that the Company may redeem the Debentures prior to their Stated Maturity in accordance with Article III herein and the Original Indenture.

SECTION 2.3. Form and Payment.

Except as provided in Section 2.4, the Debentures shall be issued in definitive registered form. Principal of and interest on the Debentures issued in definitive registered form will be payable, the transfer of such Debentures will be registrable and such Debentures will be exchangeable for Debentures bearing identical terms and provisions at the office or agency of the Trustee in the Borough of Manhattan, The City of New York; provided, however, that payment of interest on an Interest Payment Date may be made at the option of the Company by check mailed to the Holder entitled thereto at such address as shall appear in the Security Register or by wire transfer to an account appropriately designated by the Holder entitled thereto, while payments due at Stated Maturity or earlier redemption will be made by the Company in same-day funds against presentation and surrender of the related Debentures. Notwithstanding the foregoing, so long as the Holder of any Debentures is the Institutional Trustee, the payment of the principal of and interest (including Compound Interest and Additional Interest, if any) on such Debentures held by the Institutional Trustee will be made by the Company in same-day funds at such place and to such account as may be designated by the Institutional Trustee. Payments on the Debentures issued as a Global Debenture will be made by the Company in same-day funds to the Depository Institution.

SECTION 2.4. Global Debenture.

(a) In connection with a Dissolution Event,

(i) if the Preferred Securities are represented by one or more Global Certificates, the Debentures in definitive registered form may be presented to the Trustee by the Institutional Trustee in exchange for one or more global certificates representing the aggregate principal amount of all outstanding Debentures (each, a “Global Debenture”), to be registered in the name of the Depository Institution, or its nominee, and delivered by the Trustee to the Depository Institution for crediting to the accounts of its participants pursuant to the instructions of the Regular Trustees, and the Company, upon any such presentation, shall execute a Global Debenture in such aggregate principal

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amount and deliver the same to the Trustee for authentication and delivery in accordance with the Original Indenture and this Second Supplemental Indenture.

(ii) if any Preferred Securities are evidenced by one or more Definitive Preferred Security Certificates, the Debentures in definitive registered form may be presented to the Trustee by the Institutional Trustee and any Definitive Preferred Security Certificate evidencing Preferred Securities will be deemed to represent beneficial interests in Debentures presented to the Trustee by the Institutional Trustee having an aggregate principal amount equal to the aggregate liquidation amount of such Preferred Securities until such Definitive Preferred Security Certificate is presented to the Security Registrar for transfer or reissuance, at which time such Definitive Preferred Security Certificates will be canceled and a Debenture, registered in the name of the registered holder of such Definitive Preferred Security Certificate or the transferee of the holder of such Definitive Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Definitive Preferred Security Certificate canceled, will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Original Indenture and this Second Supplemental Indenture. On issuance of a new Debenture, Debentures in definitive form with an equivalent aggregate principal amount that were presented by the Institutional Trustee to the Trustee will be deemed to have been canceled.

(b) Notwithstanding any other provision of the Original Indenture and this Second Supplemental Indenture, a Global Debenture may not be transferred as a whole except by the Depository Institution to a nominee of the Depository Institution or another nominee of the Depository Institution or by the Depository Institution or any such nominee to a successor Depository Institution or a nominee of such successor Depository Institution.

(c) If Debentures are represented by one or more Global Debentures and if (i) at any time the Depository Institution notifies the Company that it is unwilling or unable to continue as Depository Institution or if at any time the Depository Institution shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depository Institution is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, (ii) the Company at any time determines that the Debentures shall no longer be solely represented by one or more Global Debentures or (iii) there shall have occurred an Event of Default or an event that with notice or the lapse of time or both would be an Event of Default, then the Company shall execute, and, subject to Article II of the Original Indenture, the Trustee shall authenticate and deliver, Debentures in definitive registered form in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Debenture in exchange for such Global Debenture. Upon the exchange of the Global Debenture for Debentures in definitive registered form, in authorized denominations, the Global Debenture shall be canceled by the Trustee. Such Debentures in definitive registered form issued in exchange for the Global Debenture shall be registered in such names and in such authorized denominations as the Depository Institution, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Debentures to the Depository Institution for delivery to the Persons in whose names such Debentures are so registered.

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SECTION 2.5. Interest.

(a) Each Debenture will bear interest at the rate of l% per annum (the “Coupon Rate”) from September l, 2003 until the principal thereof becomes due and payable, and on any overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on [January 1], 2004 (each, an “Interest Payment Date”), to the Person in whose name such Debenture or any predecessor Debenture is registered at the close of business on the relevant record date, which will be, as long as the Preferred Securities remain in book-entry form (or if no Preferred Securities remain outstanding, as long as the Debentures remain in book entry form), the Business Day prior to the relevant Interest Payment Date and, in the event the Preferred Securities are not in book-entry form (or if no Preferred Securities remain outstanding, in the event the Debentures are not in book entry form), the fifteenth calendar day preceding the relevant Interest Payment Date, except as otherwise provided pursuant to the provisions of Article IV hereof.

(b) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full quarterly period for which interest is computed will be computed on the basis of the actual number of days elapsed in a calendar month (but not to exceed 30 days in any month). In the event that any Interest Payment Date is not a Business Day, then payment of interest payable on such date will be made on the next Business Day (and without any interest or other payment in respect of any such delay), except that, if such next Business Day is in the next succeeding calendar year, such payment shall be made on the preceding Business Day, in each case with the same force and effect as if made on the date that such interest otherwise would have been payable.

(c) If, at any time while the Institutional Trustee is the Holder of any Debentures, the Trust or the Institutional Trustee is required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any such case, the Company will pay as additional interest (“Additional Interest”) on the Debentures held by the Institutional Trustee such additional amounts as shall be required so that the net amounts received and retained by the Institutional Trustee after paying such taxes, duties, assessments or other governmental charges will be equal to the amounts the Institutional Trustee would have received had no such taxes, duties, assessments or other governmental charges been imposed.

(d) Interest shall accrue on any overdue principal and (to the extent enforceable under applicable law) on any overdue interest at the Coupon Rate, compounded quarterly (“Compound Interest”).

SECTION 2.6. Denomination.

The Debentures shall be issued in denominations of $25 and integral multiples thereof.

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ARTICLE III

REDEMPTION OF THE DEBENTURES

SECTION 3.1. Optional Redemption.

The Debentures are redeemable prior to their Stated Maturity at the option of the Company (i) in whole or in part, from time to time, on or after [October] 1, 2008 or (ii) at any time prior to [October] 1, 2008, in whole but not in part, upon the occurrence and continuation of a Special Event, in either case at a redemption price (the “Redemption Price”) equal to 100% of the principal amount thereof, plus unpaid interest thereon (including Additional Interest and Compound Interest, if any) accrued to the date of redemption.

SECTION 3.2. Redemption Procedures.

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Debentures to be redeemed at its registered address. Unless the Company defaults in payment of the Redemption Price, on and after the redemption date interest shall cease to accrue on such Debentures called for redemption. If the Debentures are only partially redeemed pursuant to Section 3.1, the Debentures will be redeemed pro rata or by lot or by any other method utilized by the Trustee; provided, that if at the time of redemption the Debentures are represented by a Global Debenture, the Depository Institution shall determine, in accordance with its procedures, the principal amount of such Debentures held by each Depository Institution participant to be redeemed. The Redemption Price shall be paid prior to 10:00 a.m., New York City time, on the date of such redemption or at such earlier time as the Company determines; provided that the Company shall deposit with the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New York City time, on the date of such redemption.

SECTION 3.3. No Sinking Fund.

The Debentures are not entitled to the benefit of, nor is subject to, any sinking fund.

SECTION 3.4. Required Approval.

Any redemption of the Debentures in accordance with this Article may require the prior approval of the Federal Reserve Board if such approval is then required under applicable law, rules, guidelines or policies.

ARTICLE IV

EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.1. Extension of Interest Payment Period.

So long as no Event of Default under the Indenture has occurred and is continuing, the Company shall have the right, at any time and from time to time during the term of the Debentures, to defer payments of interest by extending the interest payment period of such Debentures for a period not exceeding 20 consecutive quarterly periods (the “Extension Period”), during which Extension Period no interest shall be due and payable; provided that no Extension

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Period may extend beyond the Stated Maturity or earlier redemption of the Debentures. To the extent permitted by applicable law, interest, the payment of which has been deferred because of the extension of the interest payment period pursuant to this Section 4.1, will bear interest thereon at the Coupon Rate compounded quarterly for each quarter of the Extension Period. At the end of each Extension Period, the Company shall pay all interest, including any Additional Interest and Compound Interest (collectively, “Deferred Interest”), accrued and unpaid on the Debentures that shall be payable to the Holders in whose names the Debentures are registered in the Security Register on the record date for the first Interest Payment Date after the end of such Extension Period. Before the termination of any Extension Period, the Company may further extend such period, provided that such period together with all such previous and further extensions within such Extension Period shall not exceed 20 consecutive quarterly periods, or extend beyond the Stated Maturity or earlier redemption of the Debentures. Upon the termination of any Extension Period and upon the payment of all Deferred Interest then due, the Company may commence a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof, but the Company may prepay at any time all or any portion of the interest accrued during an Extension Period.

SECTION 4.2. Notice of Extension.

(a) If the Institutional Trustee is the only Holder of Debentures at the time the Company selects an Extension Period, the Company shall give written notice to the Regular Trustees, the Institutional Trustee and the Trustee of its selection of such Extension Period one Business Day before the earlier of (i) the next succeeding date on which Distributions on the Trust Securities issued by the Trust are payable, or (ii) the date the Trust is required to give notice of the record date, or the date such Distributions are payable, to the New York Stock Exchange or other applicable self-regulatory organization or to registered holders of the Preferred Securities issued by the Trust, but in any event at least one Business Day before such record date.

(b) If the Institutional Trustee is not the only Holder at the time the Company selects an Extension Period, the Company shall give the Holders of the Debentures and the Trustee written notice of its selection of such Extension Period at least ten Business Days before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the Company is required to give notice of the record date or the Interest Payment Date to the New York Stock Exchange or other applicable self-regulatory organization or to Holders of the Debentures.

(c) The quarterly period in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20 quarterly periods permitted in the maximum Extension Period permitted under Section 4.1.

SECTION 4.3. Limitation of Transactions.

If (i) the Company shall exercise its right to defer payment of interest as provided in Section 4.1 and the Extension Period is continuing, or (ii) there shall have occurred any Event of Default under the Indenture, or (iii) there shall have occurred any default under the Preferred Securities Guarantee, then (a) the Company shall not declare or pay any dividend on, make any distribution or other payment with respect to, or redeem, purchase, acquire or make a liquidation

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payment with respect to, any of its capital stock (other than (1) repurchases, redemptions or other acquisitions of shares of capital stock in connection with the satisfaction by the Company of its obligations under any employee benefit plans, (2) as a result of an exchange or conversion of any class or series of the Company’s capital stock for any other class or series of the Company’s capital stock or (3) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged), (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company that rank pari passu with or junior to the Debentures and (c) the Company shall not make any guarantee payments with respect to the foregoing (other than pursuant to the Preferred Securities Guarantee).

ARTICLE V

EXPENSES

SECTION 5.1. Payment of Expenses.

In connection with the offering, sale and issuance of the Trust Securities by the Trust and the sale of the Debentures by the Company to the Trust, the Company, in its capacity as borrower with respect to the Debentures, shall:

(a) pay all costs and expenses relating to the offering, sale and issuance of the Debentures, including commissions payable to the underwriters in respect of the Preferred Securities pursuant to the Purchase Agreement and compensation of the Trustee under the Indenture in accordance with the provisions of Section 6.06 of the Indenture;

(b) be responsible for and shall pay all debts and obligations (other than with respect to the Trust Securities) and all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization, maintenance and dissolution of the Trust, the offering, sale and issuance of the Trust Securities (including commissions to the underwriters in connection therewith), the fees and expenses (including reasonable counsel fees and expenses) of the Institutional Trustee, the Delaware Trustee and the Regular Trustees (including any amounts payable under Article 10 of the Declaration), the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing, and disposition of Trust assets and the enforcement by the Institutional Trustee of the rights of the holders of the Preferred Securities);

(c) be liable for any indemnification obligations arising with respect to the Declaration; and

(d) pay any and all taxes (other than United States withholding taxes attributable to the Trust or its assets) and all liabilities, costs and expenses with respect to such taxes of the Trust.

8

The Company’s obligations under this Section 5.1 shall be for the benefit of, and shall be enforceable by, any Person to whom such debts, obligations, costs, expenses and taxes are owed (a “Creditor”), whether or not such Creditor has received notice hereof. Any such Creditor may enforce the Company’s obligations under this Section 5.1 directly against the Company and the Company irrevocably waives any right of remedy to require that any such Creditor take any action against the Trust or any other Person before proceeding against the Company. The Company agrees to execute such additional agreements as may be necessary or desirable in order to give full effect to the provisions of this Section 5.1.

The provisions of this Section shall survive the termination of this Second Supplemental Indenture.

SECTION 5.2. Payment Upon Resignation or Removal.

Upon termination of this Second Supplemental Indenture or the Indenture or the removal or resignation of the Trustee, unless otherwise stated, the Company shall pay to the Trustee all amounts accrued to the date of such termination, removal or resignation that are payable pursuant to Section 6.06 of the Indenture. Upon termination of the Declaration or the removal or resignation of the Delaware Trustee or the Institutional Trustee, as the case may be, pursuant to Section 5.6 of the Declaration, the Company shall pay to the Delaware Trustee or the Institutional Trustee, as the case may be, all amounts accrued to the date of such termination, removal or resignation that are payable pursuant thereto.

ARTICLE VI

COVENANT TO LIST ON EXCHANGE

SECTION 6.1. Listing on an Exchange.

If the Debentures are distributed to the registered holders of the Preferred Securities issued by the Trust, and the Preferred Securities are then so listed, the Company will use its best efforts to list such Debentures on the New York Stock Exchange, Inc. or on such other exchange or quotation system as the Preferred Securities are then listed or quoted.

ARTICLE VII

FORM OF DEBENTURE

SECTION 7.1. Form of Debenture.

The Debentures and the Trustee’s Certificate of Authentication to be endorsed thereon are to be substantially in the following forms:

(FORM OF FACE OF DEBENTURE)

IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture is a Global Debenture within the meaning of the Indenture and is registered in the name of The Depository Trust Company (the “Depository”) or a nominee of the Depository. This Debenture is exchangeable for Debentures registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and no

9

transfer of this Debenture (other than a transfer of this Debenture as a whole by the Depository to a nominee of the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository) may be registered except in limited circumstances.

Unless this Debenture is presented by an authorized representative of the Depository to the Company or its agent for registration of transfer, exchange or payment, and any Debenture issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of the Depository and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

No. 1

THE COLONIAL BANCGROUP, INC.

l% JUNIOR SUBORDINATED DEBENTURE DUE 2033

$             CUSIP No.            

THE COLONIAL BANCGROUP, INC., a Delaware corporation (the “Company”, which term includes any successor entity under the Indenture hereinafter referred to), for value received, hereby promises to pay to The Bank of New York, as Institutional Trustee of Colonial Capital Trust IV under that certain Amended and Restated Declaration of Trust dated as of September l, 2003, or registered assigns, the principal sum of [            ] ($            ) on [October] 1, 2033; unless redeemed by the Company prior to the Stated Maturity in accordance with the terms specified herein and in the Indenture. The Company further promises to pay interest on said principal sum from September l, 2003, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on [January] 1, 2004 (each, an “Interest Payment Date”), at the rate of l% per annum (the “Coupon Rate”) until the principal hereof shall have become due and payable, and on any overdue principal and (to the extent enforceable under applicable law) on any overdue interest at the Coupon Rate, compounded quarterly.

The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months and, except as provided in the following sentences, the amount of interest payable for any period shorter than a full quarterly period for which interest is computed will be computed on the basis of the actual number of days elapsed in a calendar month (but not to exceed 30 days in any month).

In the event that any Interest Payment Date is not a Business Day, then payment of interest payable on such date will be made on the next Business Day (and without any interest or other payment in respect of any such delay), except that, if such next Business Day is in the next succeeding calendar year, such payment shall be made on the preceding Business Day, in each case with the same force and effect as if made on the date such payment otherwise would have been payable.

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The interest installment 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 Debenture (or one or more Predecessor Securities, as defined in the Indenture) is registered at the close of business on the relevant record dates, which will be, as long as this Debenture remains in book-entry form, the Business Day prior to the relevant Interest Payment Date and, in the event this Debenture is not in book-entry form, the fifteenth calendar day preceding the relevant Interest Payment Date. Payments of interest may be deferred by the Company pursuant to the provisions of the Indenture. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the Holders on such regular record date and may be paid to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the Holders of Debentures not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Debentures may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

The principal of and the interest on this Debenture shall be payable at the office or agency of the Trustee maintained for that purpose in the Borough of Manhattan, The City of New York, in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest on an Interest Payment Date may be made at the option of the Company by check mailed to the Holder at such address as shall appear in the Security Register or by wire transfer to an account appropriately designated by the Holder entitled thereto, while payments due at Stated Maturity or earlier redemption will be made by the Company in same-day funds against presentation and surrender of this Debenture. Notwithstanding the foregoing, so long as the Holder of this Debenture is the Institutional Trustee, the payment of the principal of and interest on this Debenture will be made by the Company in same-day funds at such place and to such account as may be designated by the Institutional Trustee.

The indebtedness evidenced by this Debenture 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 (as defined in the Indenture) and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Debenture, 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 action as may be necessary or appropriate to acknowledge or 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 his or her acceptance hereof, hereby 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. Each Holder hereof, by his or her acceptance hereof, hereby agrees to treat this Debenture as indebtedness for all United States federal income tax purposes.

This Debenture shall not be entitled to any benefit under the Indenture or be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.

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THIS DEBENTURE IS NOT A SAVINGS OR DEPOSIT ACCOUNT OR OTHER OBLIGATION OF A BANK AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

The provisions of this Debenture are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

THE COLONIAL BANCGROUP, INC.
By:
Name:	Sarah H. Moore
Title:	Chief Financial Officer

Attest:
By:
Name:	Kamal S. Hosein
Title:	Treasurer

(FORM OF CERTIFICATE OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

Dated: [    ]

This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.

The Bank of New York, as Trustee
By:
	Authorized Signatory

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(FORM OF REVERSE OF DEBENTURE)

This Debenture is one of a duly authorized series of debt securities (the “Securities”) of the Company issued or to be issued under and pursuant to the Indenture, dated as of March 21, 2002, duly executed and delivered between the Company and The Bank of New York, as trustee (the “Indenture”) (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of March 21, 2002, between the Company and the Trustee, as supplemented by the Second Supplemental Indenture, dated as of September ·, 2003, between the Company and the Trustee (the “Second Supplemental Indenture”). The series of Securities of which this Debenture is a part is entitled the “l% Junior Subordinated Debentures due 2033” (the “Debentures”). This series of Debentures is limited in aggregate principal amount as specified in said Second Supplemental Indenture. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Debentures.

This Debenture is redeemable by the Company (i) in whole but not in part at any time prior to [October] 1, 2008 upon the occurrence and continuation of a Special Event (as defined in the Indenture) or (ii) in whole or in part on or after [October] 1, 2008. Any redemption pursuant to this paragraph will be made, upon not less than 30 days nor more than 60 days’ prior written notice, at a redemption price equal to 100% of the principal amount to be redeemed plus any unpaid interest (including Additional Interest and Compound Interest, if any) accrued thereon to the date of such redemption (the “Redemption Price”). The Redemption Price shall be paid prior to 10:00 a.m., New York City time, on the date of such redemption or at such earlier time as the Company determines. If the Debentures are only partially redeemed by the Company, the Debentures will be redeemed pro rata or by lot or by any other method utilized by the Trustee (in integral multiples of $25); provided that if, at the time of redemption, the Debentures are represented by a Global Debenture, the Depository shall determine the principal amount of such Debentures held by each Holder to be redeemed in accordance with its procedures.

In the event of redemption of this Debenture in part only, a new Debenture or Debentures for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of a majority in aggregate principal amount of the Securities of each series affected at the time outstanding, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities; provided, however, that no such supplemental indenture shall (i) change the Stated Maturity of any Securities of any series, or reduce the principal amount thereof or any premium thereon, or reduce the rate (or change the manner of calculation of the rate) or

13

extend the time of payment of interest thereon or change the dates on which interest thereon is payable, or change any date on which or period in which the Securities of any series may be redeemed or reduce the amount payable on any redemption thereof, or make the principal thereof or any interest thereon payable in any coin or currency other than that provided in the Securities of any series, or impair or affect the right of any Holder of the Securities of any series to institute suit for payment in respect thereof, or (ii) reduce the percentage of the Securities of any series the Holders of which are required to consent to any such supplemental indenture or (iii) change any of the subordination provisions applicable to the Securities of any series in a manner that has a material adverse effect on the interests of Holders thereof; provided, however, that if the Institutional Trustee is the Holder of this Debenture, such supplemental indenture shall not be effective until the registered holders of a majority in aggregate liquidation amount of the Preferred Securities or, in the case of clause (i), (ii) or (iii) above, each registered holder of Preferred Securities, as the case may be, consents thereto. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Securities of any series at the time outstanding affected thereby, on behalf of all of the Holders of the Securities of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Securities of such series. Any such consent or waiver by the Holder of this Debenture (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Debenture and of any Debenture issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Debenture.

No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the time and place and at the rate and in the money herein prescribed.

The Company shall have the right, on one or more occasions during the term of the Debentures, and from time to time to extend the interest payment period of such Debentures for up to 20 consecutive quarterly periods (an “Extension Period”), at the end of which period the Company shall pay all interest then accrued and unpaid (together with interest thereon at the Coupon Rate to the extent that payment of such interest is enforceable under applicable law); provided that no Extension Period may extend beyond the Stated Maturity or earlier redemption of the Debentures. Before the termination of any such Extension Period, the Company may further extend such Extension Period, provided that such Extension Period together with all such previous and further extensions within such Extension Period shall not exceed 20 consecutive quarterly periods or extend beyond the Stated Maturity or earlier redemption of the Debentures. At the termination of any Extension Period and upon the payment of all accrued and unpaid interest, including any Additional Interest and Compound Interest, the Company may commence a new Extension Period, subject to the foregoing requirements.

As provided in the Indenture and subject to certain limitations therein set forth, this Debenture is transferable by the Holder hereof on the Security Register, upon surrender of this Debenture for registration of transfer at the office or agency of the Trustee in the Borough of

14

Manhattan, The City of New York, accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Debentures of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.

The Debentures are issuable only in fully registered form without interest coupons in denominations of $25 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations herein and therein set forth, Debentures so issued are exchangeable for a like aggregate principal amount of Debentures of a different authorized denomination, as requested by the Holder surrendering the same.

Prior to due presentment for registration of transfer of this Debenture, the Company, the Trustee, any paying agent, any transfer agent and any security registrar may deem and treat the Holder hereof as the absolute owner hereof (whether or not this Debenture shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than a security registrar) for the purpose of receiving payment of or on account of the principal hereof and interest hereon and for all other purposes, and none of the Company, the Trustee, any paying agent, any transfer agent or any security registrar shall be affected by any notice to the contrary.

All terms used in this Debenture that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

This Debenture shall be governed by, and construed in accordance with, the laws of the State of New York.

ARTICLE VIII

ORIGINAL ISSUE OF DEBENTURES

SECTION 8.1. Original Issue of Debentures.

Debentures in the aggregate principal amount of up to $103,092,800 may, upon execution of this Second Supplemental Indenture or upon any written order of the Company setting forth the amount therefor, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Debentures to or upon the written order of the Company, signed by its Chairman, its President, or any Executive Vice President and its Treasurer, its Secretary, any Assistant Treasurer, or any Assistant Secretary, without any further action by the Company.

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ARTICLE IX

MISCELLANEOUS

SECTION 9.1. Ratification.

The Indenture, as amended and supplemented by the Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.

SECTION 9.2. Trustee Not Responsible for Recitals.

The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. Except with respect to its due authorization, execution and delivery of this Second Supplemental Indenture, the Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture.

SECTION 9.3. Separability.

In case any one or more of the provisions contained in this Second Supplemental Indenture or in the Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Second Supplemental Indenture or of the Debentures, but this Second Supplemental Indenture and the Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

SECTION 9.4. Counterparts.

This Second Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

SECTION 9.5. Governing Law.

This Second Supplemental Indenture and each Debenture shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles thereof.

16

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

		THE COLONIAL BANCGROUP, INC.
Attest:
By:		By:
	Name: William A. McCrary		Name: Sarah H. Moore
	Title:    Secretary		Title:   Chief Financial Officer
		THE BANK OF NEW YORK, as Trustee
		By:
			Name:
			Title:

17

EX-4.4

EXHIBIT 4.4

CERTIFICATE OF TRUST

OF

COLONIAL CAPITAL TRUST IV

This Certificate of Trust of Colonial Capital Trust IV (the “Trust”), dated August 22, 2003, is being duly executed and filed by the undersigned, as trustees of Colonial Capital Trust IV, for the purpose of forming a statutory trust under the Delaware Statutory Trust Act (12 Del.C. § 3801 et seq.) (the “Trust Act”).

1. Name. The name of the statutory trust formed hereby is Colonial Capital Trust IV.

2. Delaware Trustee. The name and business address of the trustee of the Trust which has its principal place of business in the State of Delaware, as required by the Trust Act, is The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711.

3. Effective Date. This Certificate of Trust shall be effective upon filing with the Secretary of State of the State of Delaware.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have executed this Certificate of Trust as of the date first above written in accordance with Section 3811(a) of the Trust Act.

/s/ Sarah H. Moore

Name: Sarah H. Moore

Title: Regular Trustee

/s/ Kamal Hosein

Name: Kamal Hosein

Title: Regular Trustee

/s/ William A. McCrary

Name: William A. McCrary

Title: Regular Trustee

THE BANK OF NEW YORK

(DELAWARE),

as Delaware Trustee

By: /s/ Patrick Burns          

Name: Patrick Burns, SVP

Title:    

2

EX-4.5

EXHIBIT 4.5

DECLARATION OF TRUST

OF

COLONIAL CAPITAL TRUST IV

DECLARATION OF TRUST (“Declaration”) dated and effective as of August 22, 2003 by the Trustees (as defined herein), the Sponsor (as defined herein), and by the holders, from time to time, of undivided beneficial interests in the assets of the Trust to be issued from time to time.

WHEREAS, the Trustees and the Sponsor desire to establish a trust (the “Trust”) pursuant to the Delaware Statutory Trust Act for the purpose of issuing and selling the Preferred Securities (as defined herein) and investing the proceeds thereof in certain Debentures of the Debenture Issuer (as both terms are defined herein); and

NOW, THEREFORE, it being the intention of the parties hereto that the Trust constitute a statutory trust under the Statutory Trust Act and that this Declaration constitute the governing instrument of such statutory trust, the Trustees declare that all assets contributed to the Trust will be held in trust for the exclusive benefit of the holders, from time to time, of the securities representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration.

ARTICLE I

DEFINITIONS

SECTION 1.1. Definitions.

Unless the context otherwise requires:

(a) capitalized terms used in this Declaration 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 Declaration has the same meaning throughout;

(c) all references to “the Declaration” or “this Declaration” are to this Declaration of Trust as modified, supplemented or amended from time to time;

(d) all references in this Declaration to Articles and Sections are to Articles and Sections of this Declaration unless otherwise specified; and

(e) a reference to the singular includes the plural and vice versa.

-1-

“Affiliate” has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder.

“Business Day” means any day other than a day on which banking institutions in New York, New York are authorized or required by law to close.

“Commission” means the Securities and Exchange Commission.

“Common Security” means a security representing an undivided beneficial interest in the assets of the Trust with such terms as may be set out in any amendment to this Declaration.

“Company Indemnified Person” means (a) any Regular Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers, directors, shareholders, members, partners, employees, representatives or agents of any Regular Trustee; or (d) any employee or agent of the Trust or its Affiliates.

“Covered Person” means (a) any officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust’s Affiliates and (b) any holder of Securities.

“Debenture Issuer” means the Parent in its capacity as the issuer of the Debentures under the Indenture.

“Debentures” means the series of Debentures to be issued by the Debenture Issuer and acquired by the Trust.

“Debenture Trustee” means The Bank of New York, as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee.

“Delaware Trustee” has the meaning set forth in Section 3.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time or any successor legislation.

“Fiduciary Indemnified Person” has the meaning set forth in Section 4.3(b).

“Indemnified Person” means a Company Indemnified Person or a Fiduciary Indemnified Person.

“Indenture” means the indenture to be entered into between the Parent and the Debenture Trustee and any indenture supplemental thereto pursuant to which the Debentures are to be issued.

“Institutional Trustee” has the meaning set forth in Section 3.4.

-2-

“Parent” means the Colonial BancGroup, Inc., a Delaware corporation, or any successor entity in a merger.

“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.

“Preferred Security” means a security representing an undivided beneficial interest in the assets of the Trust with such terms as may be set out in any amendment to this Declaration.

“Regular Trustee” means any Trustee other than the Delaware Trustee and the Institutional Trustee.

“Securities” means the Common Securities and the Preferred Securities.

“Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor legislation.

“Sponsor” means the Parent in its capacity as sponsor of the Trust.

“Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C Section 3801 et seq., as it may be amended from time to time, or any successor legislation.

“Trustee” or “Trustees” means each Person who has signed this Declaration as a trustee, so long as such Person shall continue in office in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder.

ARTICLE 11

ORGANIZATION

SECTION 2.1. Name.

The Trust created by this Declaration is named “Colonial Capital Trust IV.” The activities of the Trust may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees.

SECTION 2.2. Office.

The address of the principal office of the Trust is c/o The Colonial BancGroup, Inc., One Commerce Street, Suite 800, Montgomery, Alabama 36104. At any time, the Regular Trustees may designate another principal office.

-3-

SECTION 2.3. Purpose.

The exclusive purposes and functions of the Trust are to issue and sell the Securities and use the proceeds from such sale to acquire the Debentures and to engage in only those other activities necessary or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets or otherwise undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified for United States federal income tax purposes as a grantor trust.

SECTION 2.4. Authority.

Subject to the limitations provided in this Declaration, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust. In dealing with the Regular Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Regular Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Regular Trustees as set forth in this Declaration.

SECTION 2.5. Title to Property of the Trust.

Legal title to all assets of the Trust shall be vested in the Trust.

SECTION 2.6. Powers of the Trustees.

The Regular Trustees shall have the exclusive power and authority to cause the Trust to engage in the following activities:

(a) to issue the Preferred Securities and the Common Securities in accordance with this Declaration, in connection with the sale of the Preferred Securities; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities, and, provided further, that there shall be no interests in the Trust other than the Securities and the issuance of the Securities shall be limited to the simultaneous issuance of both Preferred Securities and Common Securities;

(b) in connection with the issue and either sale or exchange of the Preferred Securities to:

(i) execute and file with the Commission one or more registration statements on Form S-3 prepared by the Sponsor, including any and all amendments thereto in relation to the Preferred Securities;

-4-

(ii) execute and file any documents prepared by the Sponsor, or take any acts as determined by the Sponsor to be necessary in order to qualify or register all or part of the Preferred Securities in any State in which the Sponsor has determined to qualify or register such Preferred Securities for sale or exchange;

(iii) execute and file an application, prepared by the Sponsor, to the New York Stock Exchange or any other national stock exchange or the Nasdaq Stock Market’s National Market for listing or quotation upon notice of issuance of any Preferred Securities;

(iv) execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act;

(v) execute and enter into a purchase agreement, an underwriting agreement and/or a pricing agreement providing for the sale of the Preferred Securities; and

(vi) execute and enter into letters, documents or instruments with The Depository Trust Company.

(c) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and provide for reasonable compensation for such services;

(d) to incur expenses which are necessary or incidental to carry out any of this purposes of this Declaration; and

(e) to execute all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing.

SECTION 2.7. Filing of Certificate of Trust.

On or after the date of execution of this Declaration, the Trustees shall cause the filing of the Certificate of Trust for the Trust with the Secretary of State of the State of Delaware.

SECTION 2.8. Duration of Trust.

The Trust, absent dissolution pursuant to the provisions of Section 5.2, shall have existence for fifty-five (55) years from the date hereof.

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SECTION 2.9. Responsibilities of the Sponsor.

In connection with the issue and sale of the Preferred Securities, the Sponsor shall have the exclusive right and responsibility to engage in the following activities:

(a) to prepare for filing by the Trust with the Commission one or more registration statements on Form S-3 in relation to the Preferred Securities, including any amendments thereto;

(b) to determine the States in which to take appropriate action to qualify or register for sale or exchange of all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States;

(c) to prepare for filing by the Trust an application to the New York Stock Exchange or any other national stock exchange or the Nasdaq National Market for listing or quotation upon notice of issuance of any Preferred Securities;

(d) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the class of Preferred Securities under Section 12(b) of the Exchange Act, including any amendments thereto;

(e) to negotiate the terms of purchase agreement, an underwriting agreement and/or a pricing agreement providing for the sale of the Preferred Securities; and

(f) to negotiate the terms of letters, documents or instruments with The Depository Trust Company.

SECTION 2.10. Declaration Binding on Securities Holders.

Every Person by virtue of having become a holder of a Security or any interest therein in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Declaration.

ARTICLE III

TRUSTEES

SECTION M. Trustees.

The number of Trustees initially shall be four (4), and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the

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Sponsor. The Sponsor is entitled to appoint or remove without cause any Trustee at any time; provided, however, that the number of Trustees shall in no event be less than two (2); provided further that one Trustee, in the case of a natural person, shall be a person who is a resident of the State of Delaware or that, if not a natural person, is an entity which has its principal place of business in the State of Delaware (the “Delaware Trustee”); provided further that there shall be at least one trustee who is an employee or officer of, or is affiliated with the Parent (a “Regular Trustee”).

SECTION 3.2. Regular Trustees.

The initial Regular Trustees shall be Sarah H. Moore, Kamal Hosein, and William A. McCrary.

(a) except as expressly set forth in this Declaration, any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular Trustee.

(b) Except as otherwise required by applicable law, any Regular Trustee is authorized to execute on behalf of the Trust any documents which the Regular Trustees have the power and authority to cause the Trust to execute pursuant to Section 2.6; and

(c) a Regular Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purposes of signing any documents which the Regular Trustees have power and authority to cause the Trust to execute pursuant to Section 2.6.

SECTION 3.3. Delaware Trustee.

The initial Delaware Trustee shall be The Bank of New York (Delaware).

Notwithstanding any other provision of this Declaration, the Delaware Trustee shall not be entitled to exercise any of the powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Regular Trustees described in this Declaration. The Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Statutory Trust Act. Notwithstanding anything herein to the contrary, the Delaware Trustee shall not be liable for the acts or omissions to act of the Trust or of the Regular Trustees except such acts as the Delaware Trustee is expressly obligated or authorized to undertake under this Declaration or the Statutory Trust Act and except for the gross negligence or willful misconduct of the Delaware Trustee.

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SECTION 3.4. Institutional Trustee.

Prior to the issuance of the Preferred Securities and Common Securities, the Sponsor shall appoint another trustee (the “Institutional Trustee”) meeting the requirements of an eligible trustee of the Trust Indenture Act of 1939, as amended, by the execution of an amendment to this Declaration executed by the Regular Trustees, the Sponsor, the Institutional Trustee and the Delaware Trustee.

SECTION 3.5. Not Responsible for Recitals or Sufficiency of Declaration.

The recitals contained in this Declaration shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Declaration.

ARTICLE IV

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 4.1. Exculpation.

(a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions; and

(b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which distributions to holders of Securities might properly be paid.

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SECTION 4.2. Fiduciary Duty.

(a) To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Declaration shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person;

(b) Unless otherwise expressly provided herein:

(i) whenever a conflict of interest exists or arises between a Covered Person and an Indemnified Person; of

(ii) whenever this Declaration or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any holder of Securities,

the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise.

(c) Whenever in this Declaration an Indemnified Person is permitted or required to make a decision:

(i) in its “discretion” or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or

(ii) in its “good faith” or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to

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any other or different standard imposed by this Declaration or by applicable law.

SECTION 4.3. Indemnification.

(a)(i) Debenture issuer shall indemnify, to the full extent permitted by law, any Company Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was a Company Indemnified Person against expenses (including attorneys, fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Company Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

    (ii) The Debenture Issuer shall indemnify, to the full extent permitted by law, any Company Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was a Company Indemnified Person against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Company Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper.

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(iii) To the extent that a Company Indemnified Person shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in defense of any claim, issue or matter therein, he shall be indemnified, to the fullest extent permitted by law, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

(iv) Any indemnification under paragraphs (i) and (ii) of this Section 4.3(a) (unless ordered by a court) shall be made by the Debenture Issuer only as authorized in the specific case upon a determination that indemnification of the Company Indemnified Person is proper in the circumstances because he has met the applicable standard of conduct set forth, in paragraphs (i) and (ii). Such determination shall be made (1) by the Regular Trustees by a majority vote of a quorum consisting of such Regular Trustees who were not parties to such action, suit or proceeding, (2) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Regular Trustees so directs, by independent legal counsel in a written opinion, or (3) by the Common Security Holder of the Trust.

(v) Expenses (including attorneys’ fees) incurred by a Company Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 4.3(a) shall be paid by the Debenture Issuer in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Debenture Issuer as authorized in this Section 4.3(a). Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer if a determination is reasonably and promptly made (i) by the Regular Trustees by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a quorum is not obtainable, of, even if obtainable, if a quorum of disinterested Regular Trustees so directs, by independent legal counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based upon the facts known to the Regular Trustees, counsel or the Common Security Holder at the time such determination is made, such Company Indemnified Person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Trust, or, with respect to any criminal proceeding, that Such Company Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In no event shall

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any advance be made in instances where the Regular Trustees, independent legal counsel or Common Security Holder reasonably determine that such person deliberately breached his duty to the Trust or its Common or Preferred Security Holders.

(vi) The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 4.3(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Debenture Issuer or Preferred Security Holders or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. All rights to indemnification under this Section 4.3(a) shall be deemed to be provided by a contract between the Debenture Issuer and each Company Indemnified Person who serves in such capacity at any time while this Section 4.3(a) is in effect. Any repeal or modification of this Section 4.3(a) shall not affect any rights or obligations then existing.

(vii) The Debenture Issuer or the Trust may purchase and maintain insurance on behalf of any Person who is or was a Company Indemnified Person against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Debenture Issuer would have the power to indemnify him against such liability under the provisions of this Section 4.3(a).

(viii) For purposes of this Section 4.3(a), references to “the Trust” shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any Person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 4.3(a) with respect to the resulting or surviving entity as he would have with respect to such constituent entity if its separate existence had continued.

(ix) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 4.3(a) shall, unless otherwise provided when authorized or ratified, continue as to a Person who has ceased to be a Company Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a Person.

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(b) The Debenture Issuer agrees to indemnify (i) the Delaware Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Delaware Trustee (each of the Persons in (i) through (iii) being referred to as a “Fiduciary Indemnified Person”) for, and to hold each Fiduciary 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 costs and expenses (including reasonable legal fees 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 obligation to indemnify as set forth in this Section 4.3(b) shall survive the termination of this Declaration,

SECTION 4.4. Outside Businesses.

Any Covered Person, the Sponsor and the Delaware Trustee may engage in of possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the holders of Securities shall have no rights by virtue of this Declaration 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 Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor or the Delaware Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the Delaware Trustee 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 Covered Person and the Delaware Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for or, may act on any committee or body of holders of securities or other obligations of the Sponsor or its Affiliates

ARTICLE V

AMENDMENTS, TERMINATION, MISCELLANEOUS

SECTION 5.1. Amendments.

At any time before the issue of any Securities, this Declaration may be amended by, and only by, a written instrument executed by all of the Regular Trustees and the Sponsor.

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SECTION 5.2. Dissolution of Trust.

(a) The Trust shall dissolve:

(i) upon the bankruptcy of the Sponsor;

(ii) upon the filing of a certificate of dissolution or its equivalent with respect to the Sponsor or the revocation of the Sponsor’s charter or of the Trust’s certificate of trust;

(iii) upon the entry of a decree of judicial dissolution of the Sponsor or the Trust; and

(iv) before the issue of any Securities, with the consent of all of the Regular Trustees and the Sponsor; and

(b) As soon as is practicable after the occurrence of an event referred to in Section 5.2(a), the Trustees shall wind up the affairs of the Trust and file a certificate of cancellation with the Secretary of State of the State of Delaware. Upon such filing, the Trust shall terminate.

SECTION 5.3. Governing Law.

This Declaration and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws.

SECTION 5.4. Headings.

Headings contained in this Declaration are inserted for convenience of reference only and do not affect the interpretation of this Declaration or any provision hereof.

SECTION 5.5. Successors and Assigns.

Whenever in this Declaration any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed.

SECTION 5.6. Partial Enforceability.

If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such

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provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

SECTION 5.7. Counterparts.

This Declaration may contain more than one counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

[SIGNATURE PAGE FOLLOWS)

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IN WITNESS WHEREOF, the undersigned have caused these presents to be executed as of the day and year first above written.

SARAH H. MOORE, as Regular Trustee

/s/ Sarah H. Moore

KAMAL HOSEIN, as Regular Trustee

/s/ Kamal Hosein

WILLIAM A. MCCRARY, as Regular Trustee

/s/ William A. McCrary

THE BANK OF NEW YORK (DELAWARE)

as Delaware Trustee

/s/ Patrick Burns

Name: Patrick Burns

Title:   SVP

THE COLONIAL BANCGROUP, INC.,

as Sponsor and Debenture Issuer

/s/ W. Flake Oakley

Name: W. Flake Oakley

Title:   President

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EX-4.6

Exhibit 4.6

AMENDED AND RESTATED

DECLARATION OF TRUST

OF

COLONIAL CAPITAL TRUST IV

Dated as of September ·, 2003

TABLE OF CONTENTS

	Page
ARTICLE I INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.	1
ARTICLE II TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.	8
SECTION 2.2 Lists of Holders of Securities.	9
SECTION 2.3 Reports by the Institutional Trustee.	9
SECTION 2.4 Periodic Reports to Institutional Trustee.	9
SECTION 2.5 Evidence of Compliance with Conditions Precedent.	10
SECTION 2.6 Events of Default; Waiver.	10
SECTION 2.7 Event of Default; Notice.	12
ARTICLE III ORGANIZATION
SECTION 3.1 Name.	13
SECTION 3.2 Office.	13
SECTION 3.3 Purposes.	13
SECTION 3.4 Authority.	14
SECTION 3.5 Title to Property of the Trust.	14
SECTION 3.6 Powers and Duties of the Regular Trustees.	14
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.	17
SECTION 3.8 Powers and Duties of the Institutional Trustee.	17
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.	20
SECTION 3.10 Certain Rights of the Institutional Trustee.	21
SECTION 3.11 Delaware Trustee.	23
SECTION 3.12 Execution of Documents.	24
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.	24
SECTION 3.14 Duration of Trust.	24
SECTION 3.15 Mergers.	24
ARTICLE IV SPONSOR
SECTION 4.1 Sponsor’s Purchase of Common Securities.	26
SECTION 4.2 Responsibilities of the Sponsor.	26
SECTION 4.3 Right to Proceed.	26
SECTION 4.4 Expenses.	27

i

ARTICLE V TRUSTEES
SECTION 5.1 Number of Trustees.	27
SECTION 5.2 Delaware Trustee.	28
SECTION 5.3 Institutional Trustee; Eligibility.	28
SECTION 5.4 Certain Qualifications of the Regular Trustees and the Delaware Trustee Generally.	29
SECTION 5.5 Regular Trustees.	29
SECTION 5.6 Appointment, Removal and Resignation of Trustees.	30
SECTION 5.7 Vacancies among Trustees.	31
SECTION 5.8 Effect of Vacancies.	32
SECTION 5.9 Meetings.	32
SECTION 5.10 Delegation of Power.	32
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.	32
ARTICLE VI DISTRIBUTIONS
SECTION 6.1 Distributions.	33
ARTICLE VII ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.	33
SECTION 7.2 Paying Agent.	34
SECTION 7.3 Outstanding Preferred Securities.	35
ARTICLE VIII DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.	36
ARTICLE IX TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.	37
SECTION 9.2 Transfer of Certificates.	37
SECTION 9.3 Deemed Security Holders.	38
SECTION 9.4 Book-Entry Interests.	39
SECTION 9.5 Notices to Depository Institution.	40
SECTION 9.6 Appointment of Successor Depository Institution.	40
SECTION 9.7 Definitive Preferred Security Certificates.	40
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.	41

ii

ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.	41
SECTION 10.2 Exculpation.	42
SECTION 10.3 Fiduciary Duty.	42
SECTION 10.4 Indemnification.	43
SECTION 10.5 Outside Businesses	46
SECTION 10.6 Compensation; Fees	47
ARTICLE XI ACCOUNTING
SECTION 11.1 Fiscal Year.	47
SECTION 11.2 Certain Accounting Matters.	47
SECTION 11.3 Banking.	48
SECTION 11.4 Withholding.	48
ARTICLE XII AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.	49
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.	50
ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.	52
SECTION 13.2 Representations and Warranties of Delaware Trustee.	52
ARTICLE XIV MISCELLANEOUS
SECTION 14.1 Notices.	53
SECTION 14.2 Governing Law.	54
SECTION 14.3 Intention of the Parties.	55
SECTION 14.4 Headings.	55
SECTION 14.5 Successors and Assigns.	55
SECTION 14.6 Partial Enforceability.	55
SECTION 14.7 Counterparts.	55
ANNEX I	A-1
Exhibit A-1 Form of Preferred Securities Certificate	A1-1
Exhibit A-1 Form of Common Securities Certificate	A2-1

iii

CROSS-REFERENCE TABLE*

Section of Trust Indenture Act of 1939, as amended	Section of Declaration
310(a)	5.3(a)
310(b)	5.3(c)
310(c)	Inapplicable
311(a) and (b)	5.3(c)
311(c)	Inapplicable
312(a)	2.2(a)
312(b)	2.2(b)
313	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)	3.9(b)
315(b)	2.7(a)
315(c)	3.9(a)
315(d)	3.9(b)
316(a) and (b)	2.6 and Annex I (Sections 5 and 6)
316(c)	3.6(e)
317(a)	3.8(e) and (g)
317(b)	3.8(h)

* This Cross-Reference Table does not constitute part of the Declaration and shall not affect the interpretation of any of its terms or provisions.

iv

AMENDED AND RESTATED

DECLARATION OF TRUST

OF

COLONIAL CAPITAL TRUST IV

September ·, 2003

THIS AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”) is dated and effective as of September ·, 2003 by the Trustees (as defined herein), the Sponsor (as defined herein) and by the holders, from time to time, of undivided beneficial interests in the assets of the Trust to be issued pursuant to this Declaration.

WHEREAS, certain of the Trustees and the Sponsor established Colonial Capital Trust IV (the “Trust”), a statutory trust under the Statutory Trust Act (as defined herein), pursuant to a Declaration of Trust, dated as of September ·, 2003 (the “Original Declaration”), and a Certificate of Trust filed with the Secretary of State of the State of Delaware on September ·, 2003 (the “Certificate of Trust”) for the purpose of issuing and selling Securities (as defined herein) and investing the proceeds therefrom in Debentures of the Debenture Issuer (each as defined herein); and

WHEREAS, as of the date hereof, no Securities have been issued; and

WHEREAS, the parties hereto, by this Declaration, hereby amend and restate each and every term and provision of the Original Declaration.

NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a statutory trust under the Statutory Trust Act and that this Declaration constitutes the governing instrument of such statutory trust, the Trustees declare that all assets contributed to the Trust will be held in trust for the benefit of the Holders, subject to the provisions of this Declaration.

ARTICLE I

INTERPRETATION AND DEFINITIONS

SECTION 1.1 Definitions.

Unless the context otherwise requires:

(a) capitalized terms used in this Declaration 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 Declaration has the same meaning throughout;

(c) all references to “the Declaration” or “this Declaration” are to this Declaration as modified, supplemented or amended from time to time;

(d) all references in this Declaration to Articles, Sections, Annexes and Exhibits are to Articles and Sections of, and Annexes and Exhibits to, this Declaration;

(e) a term defined in the Trust Indenture Act has the same meaning when used in this Declaration unless otherwise defined in this Declaration or unless the context otherwise requires; and

(f) a reference to the singular includes the plural and vice versa.

“Additional Interest” has the meaning set forth in Section 2(d) of Annex I.

“Affiliate” has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder.

“Agent” means any Paying Agent.

“Authorized Officer” of a Person means any executive officer, president, vice-president, assistant vice-president, treasurer, assistant treasurer, secretary, assistant secretary or other officer of such Person generally authorized to bind such Person.

“Book-Entry Interest” means a beneficial interest in a Global Certificate, ownership and transfers of which shall be maintained and made through book entries by a Depository Institution as described in Section 9.4.

“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banking institutions in The City of New York are permitted or required by any applicable law, regulation or executive order to close.

“Certificate” means a Common Security Certificate and/or a Preferred Security Certificate, as the context requires.

“Certificate of Trust” has the meaning set forth in the first recital hereto.

“Closing Date” means the “Closing Time” and each “Date of Delivery,” each as defined in the Purchase Agreement.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation.

“Commission” means the Securities and Exchange Commission.

“Common Securities” has the meaning set forth in Section 7.1(a).

“Common Securities Guarantee” means the guarantee agreement, to be dated as of the Closing Time, of the Sponsor in respect of the Common Securities.

“Common Security Certificate” means a definitive certificate in fully registered form evidencing one or more Common Securities substantially in the form of Exhibit A-2.

“Company Indemnified Person” means (a) any Regular Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers, directors, shareholders, members, partners, employees,

2

representatives or agents of any Regular Trustee; or (d) any officer, employee or agent of the Trust or its Affiliates.

“Compound Interest” has the meaning set forth in Section 2(a) of Annex I.

“Corporate Trust Office” means the office of the Institutional Trustee at which the corporate trust business of the Institutional Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Declaration is located at 101 Barclay Street, New York, New York 10286.

“Covered Person” means: (a) any officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust’s Affiliates; and (b) any Holder of Securities.

“Coupon Rate” has the meaning set forth in Section 2(a) of Annex I.

“Creditor” has the meaning set forth in Section 4.4.

“Debenture Issuer” means The Colonial BancGroup, Inc., a Delaware corporation, in its capacity as issuer of the Debentures under the Indenture.

“Debenture Purchase Agreement” means the purchase agreement to be dated as of the Closing Time, between the Debenture Trustee and the Trust, relating to the Debentures.

“Debentures” means the ·% Junior Subordinated Debentures due 2033 issued by the Debenture Issuer to the Trust.

“Debt Trustee” means The Bank of New York, as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee.

“Declaration” has the meaning set forth in the preamble hereto.

“Definitive Preferred Security Certificate” has the meaning set forth in Section 9.4.

“Delaware Trustee” has the meaning set forth in Section 5.2.

“Depository Institution” shall mean DTC or any other clearing agency or any successor registered as a clearing agency under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Debenture Issuer pursuant to either Section 2.03 or 2.11 of the Indenture.

“Depository Institution Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depository Institution effects book-entry transfers and pledges of securities deposited with the Depository Institution.

“Direct Action” has the meaning set forth in Section 3.8(e).

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“Distribution” means a distribution payable to Holders of Securities in accordance with Section 6.1.

“Distribution Payment Date” has the meaning set forth in Section 2(b) of Annex I.

“DTC” means The Depository Trust Company.

“Event of Default” in respect of the Securities means an event of default within the meaning of, and as defined under, the Indenture has occurred and is continuing in respect of the Debentures.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation.

“Extension Period” has the meaning set forth in Section 2(b) of Annex I.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

“Fiduciary Indemnified Person” has the meaning set forth in Section 10.4(b).

“Fiscal Year” has the meaning set forth in Section 11.1.

“Global Certificate” has the meaning set forth in Section 9.4.

“Holder” means a Person in whose name a Certificate representing a Security is registered, such Person being a beneficial owner thereof within the meaning of the Statutory Trust Act.

“Indemnified Person” means a Company Indemnified Person or a Fiduciary Indemnified Person.

“Indenture” means the Indenture dated as of March 21, 2002, as supplemented by the First Supplemental Indenture, dated March 21, 2002, as supplemented by the Second Supplemental Indenture, dated on the Closing Date, each between the Debenture Issuer and the Debt Trustee, and any indenture supplemental thereto applicable to the Debentures.

“Institutional Trustee” means the Trustee meeting the eligibility requirements set forth in Section 5.3.

“Institutional Trustee Account” has the meaning set forth in Section 3.8(c).

“Investment Company” means an investment company as defined in the Investment Company Act.

“Investment Company Act” means the Investment Company Act of 1940, as amended from time to time, or any successor legislation.

“Investment Company Event” has the meaning set forth in Section 4(c) of Annex I hereto.

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“Legal Action” has the meaning set forth in Section 3.6(g).

“Liquidation Distribution” has the meaning set forth in Section 3 of Annex I.

“List of Holders” has the meaning set forth in Section 2.2(a).

“Majority in Liquidation Amount of Securities” means, except as provided in the terms of the Preferred Securities set forth in Annex I hereto or by the Trust Indenture Act, Holder(s) of outstanding Securities voting together as a single class, excluding the Trust, the Debenture Issuer and any Affiliate of the Trust or the Debenture Issuer, or, as the context may require, Holders of outstanding Preferred 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 liquidation 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.

“NYSE” means the New York Stock Exchange, Inc.

“Officers’ Certificate” means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Declaration shall include:

(a) a statement that each Authorized Officer signing the Certificate has read the covenant or condition and the definitions relating thereto;

(b) a brief statement of the nature and scope of the examination or investigation undertaken by each Authorized Officer in rendering the Certificate;

(c) a statement that each such Authorized Officer has made such examination or investigation as, in such Authorized Officer’s opinion, is necessary to enable such Authorized Officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such Authorized Officer, such condition or covenant has been complied with.

“Original Declaration” has the meaning set forth in the first recital hereto.

“Paying Agent” has the meaning set forth in Section 7.2.

“Payment Amount” has the meaning set forth in Section 6.1.

“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.

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“Preferred Guarantee Trustee” means The Bank of New York, as trustee under the Preferred Securities Guarantee until a successor is appointed thereunder, and thereafter means such successor trustee.

“Preferred Securities” has the meaning set forth in Section 7.1(a).

“Preferred Securities Guarantee” means the guarantee agreement, to be dated as of the Closing Time, between the Sponsor and the Preferred Guarantee Trustee, in respect of the Preferred Securities.

“Preferred Security Beneficial Owner” means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest, as reflected on the books of the Depository Institution, or on the books of a Person maintaining an account with such Depository Institution (directly as a Depository Institution Participant or as an indirect participant, in each case in accordance with the rules of such Depository Institution).

“Preferred Security Certificate” means a certificate in fully registered form evidencing one or more Preferred Securities substantially in the form of Exhibit A-1.

“Prepayment Price” has the meaning set forth in Section 4(b) of Annex I.

“Pro Rata” has the meaning set forth in Section 8 of Annex I.

“Prospectus” means the prospectus included in the Registration Statement at the time the Registration Statement was declared effective, as amended or supplemented by any prospectus supplement and by all other amendments, including post-effective amendments, and supplements thereto, and all other material incorporated by reference therein.

“Purchase Agreement” means the Purchase Agreement for the offering and sale of Preferred Securities in the form of Exhibit B.

“Quorum” means a majority of the Regular Trustees or, if there are only two Regular Trustees, both of them.

“Redemption/Distribution Notice” has the meaning set forth in Section 4(f)(i) of Annex I.

“Redemption Price” shall have the meaning set forth in Section 4(a) of Annex I.

“Registration Statement” means the registration statement (File No. 333-             and 333-            01·) relating to the Preferred Securities, the Preferred Securities Guarantee and the Debentures that has been filed with the Commission pursuant to this Declaration, and all amendments (including post-effective amendments) thereto, and all exhibits and material incorporated by reference therein.

“Regular Trustee” has the meaning set forth in Section 5.1(a).

“Regulatory Capital Event” has the meaning set forth in Section 4(c) of Annex I.

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“Related Party” means, with respect to the Sponsor, any direct or indirect wholly owned subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the outstanding voting securities of the Sponsor.

“Resignation Request” has the meaning set forth in Section 5.6(c).

“Responsible Officer” means, with respect to the Institutional Trustee, any officer within the Corporate Trust Office of the Institutional Trustee, including any vice president, any assistant vice president, any assistant secretary, any assistant treasurer or other officer or agent of the Corporate Trust Office of the Institutional Trustee customarily performing functions similar to those performed by any of the above designated officers or agents and also means, with respect to a particular corporate trust matter, any other officer or agent to whom such matter is referred because of that officer’s or agent’s knowledge of and familiarity with the particular subject.

“Rule 3a-5” means Rule 3a-5 under the Investment Company Act.

“Securities” means the Common Securities and the Preferred Securities.

“Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor legislation.

“Securities Guarantees” means the Common Securities Guarantee and the Preferred Securities Guarantee.

“Special Event” has the meaning set forth in Section 4(c) of Annex I.

“Sponsor” means The Colonial BancGroup, Inc., a Delaware corporation, or any permitted successor entity in a merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.

“Stated Maturity” has the meaning set forth in Section 4(a) of Annex I.

“Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time, or any successor legislation.

“Successor Delaware Trustee” has the meaning set forth in Section 5.6(b)(ii).

“Successor Entity” has the meaning set forth in Section 3.15(b)(i).

“Successor Institutional Trustee” has the meaning set forth in Section 5.6(b)(i).

“Successor Securities” has the meaning set forth in Section 3.15(b)(i)(B).

“Super Majority” has the meaning set forth in Section 2.6(a)(ii).

“Tax Event” has the meaning set forth in Section 4(c) of Annex I hereto.

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“10% in liquidation amount” means, except as provided in the terms of the Preferred Securities set forth in Annex I hereto or by the Trust Indenture Act, Holder(s) of outstanding Securities voting together as a single class, excluding the Trust, the Debenture Issuer and any Affiliate of the Trust or the Debenture Issuer, or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of 10% or more of the aggregate liquidation amount (including the liquidation 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.

“Transfer Agent” has the meaning set forth in Section 9.2(e).

“Treasury Regulations” means the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Trust” has the meaning set forth in the first recital hereto.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation.

“Trustee” or “Trustees” means each Person who has signed this Declaration as a trustee, so long as such Person shall continue in office in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder.

ARTICLE II

TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application.

(a) This Declaration is subject to the provisions of the Trust Indenture Act that are required to be part of this Declaration and shall, to the extent applicable, be governed by such provisions.

(b) The Institutional Trustee shall be the only Trustee which is a trustee for the purposes of the Trust Indenture Act.

(c) If, and to the extent that, any provision of this Declaration limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, the duties imposed by the Trust Indenture Act shall control.

(d) The application of the Trust Indenture Act to this Declaration shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust.

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SECTION 2.2 Lists of Holders of Securities.

(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the Institutional Trustee (i) within 14 days after each record date for payment of Distributions, a list, in such form as the Institutional Trustee may reasonably require, of the names and addresses of the Holders (“List of Holders”) as of such record date, provided that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall 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 Institutional Trustee by the Sponsor and the Regular Trustees on behalf of the Trust and (ii) at any other time, within 30 days of receipt by the Trust of a written request for a List of Holders as of a date no more than 15 days before such List of Holders is given to the Institutional Trustee. The Institutional Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in the Lists of Holders given to it or which it receives in its capacity as Paying Agent (if acting in such capacity) provided that the Institutional Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.

(b) The Institutional 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 the Institutional Trustee.

(a) The Institutional Trustee shall transmit to Holders such reports concerning the Institutional 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. If required by Section 313(a) of the Trust Indenture Act, the Institutional Trustee shall, within sixty days after each May 15 following the date of this Indenture deliver to Holders a brief report which complies with the provisions of such Section 313(a).

(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Institutional Trustee with each stock exchange, if any, upon which the Securities are listed, with the Commission and with the Trust. The Trust will promptly notify the Institutional Trustee when the Securities are listed on any stock exchange and of any delisting thereof.

SECTION 2.4 Periodic Reports to Institutional Trustee.

(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust covenants and agrees to file with the Institutional Trustee, within 15 days after the Trust is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Trust may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Trust is not required to file information, documents or reports pursuant to either of such sections, then to file with the Institutional Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the

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Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations.

(b) Each of the Sponsor and the Regular Trustees on behalf of the Trust covenants and agrees to file with the Institutional Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Trust with the conditions and covenants provided for in this Declaration as may be required from time to time by such rules and regulations.

(c) Each of the Sponsor and the Regular Trustees on behalf of the Trust covenants and agrees to transmit by mail to all holders of Securities, as the names and addresses of such holders appear upon the security register, within 30 days after the filing thereof with the Institutional Trustee, such summaries of any information, documents and reports required to be filed by the Trust pursuant to subsections (a) and (b) of this Section 2.4 as may be required by rules and regulations prescribed from time to time by the Commission.

(d) Each of the Sponsor and the Regular Trustees on behalf of the Trust covenants and agrees to furnish to the Institutional Trustee within 120 days of the end of each fiscal year the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act.

(e) Delivery of such reports, information and documents to the Institutional Trustee is for informational purposes only and the Institutional Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Trust’s compliance with any of its covenants hereunder (as to which the Institutional Trustee is entitled to rely exclusively on Officers’ Certificates).

SECTION 2.5 Evidence of Compliance with Conditions Precedent.

Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Institutional Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Declaration 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 Events of Default; Waiver.

(a) Subject to Section 2.6(c), the Holders of a Majority in Liquidation Amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in respect of the Preferred Securities and its consequences, provided that, if the underlying event of default under the Indenture:

(i) is not waivable under the Indenture, the Event of Default shall also not be waivable; or

(ii) requires the consent or vote of more than a simple majority in aggregate principal amount of the holders of the Debentures (a “Super Majority”) to be waived

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under the Indenture, then the Event of Default may be waived only by the vote of the Holders of at least the proportion in aggregate liquidation amount of the Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; or

(iii) requires the consent or vote of each holder of Debentures to be waived under the Indenture, then the Event of Default may be waived only by each Holder of Preferred Securities.

The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Upon such waiver, the related default shall cease to exist, and any Event of Default with respect to the Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or an Event of Default with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Event of Default with respect to the Common Securities for all purposes of this Declaration without any further act, vote or consent of the Holders of the Common Securities.

(b) Subject to Section 2.6(c), the Holders of a Majority in Liquidation Amount of the Common Securities may, by vote, on behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect to the Common Securities and its consequences, provided that, if the underlying event of default under the Indenture:

(i) is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Event of Default as provided below in this Section 2.6(b), then the Event of Default shall also not be waivable; or

(ii) requires the consent or vote of (A) a Super Majority to be waived, then the Event of Default may be waived only by the vote of the Holders of at least the proportion in aggregate liquidation amount of the Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding or (B) each holder of Debentures to be waived, then the Event of Default may only be waived by each Holder of Preferred Securities, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 2.6(b).

Notwithstanding the foregoing, each Holder of Common Securities will be deemed to have waived any such Event of Default and all Events of Default with respect to the Common Securities and its consequences if all Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated, and until such Events of Default have been so cured, waived or otherwise eliminated, the Institutional Trustee will be deemed to be acting solely on behalf of the Holders of the Preferred Securities and only the Holders of the Preferred

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Securities will have the right to direct the Institutional Trustee in accordance with the terms of the Securities set forth in Annex I hereto. If any Event of Default with respect to the Preferred Securities is waived by the Holders of Preferred Securities as provided in this Declaration, the Holders of Common Securities agree that such waiver shall also constitute the waiver of such Event of Default with respect to the Common Securities for all purposes under this Declaration without any further act, vote or consent of the Holders of the Common Securities. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, the related default shall cease to exist, and any Event of Default with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Common Securities or impair any right consequent thereon. The foregoing provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any such default shall cease to exist and any Event of Default with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Common Securities or impair any right consequent thereon.

(c) The right of any Holder to receive payment of Distributions, the Redemption Price and Liquidation Distribution in accordance with this Declaration and the terms of the Securities set forth in Annex I on or after the respective due dates therefor, or to institute suit for the enforcement of any such payment on or after such dates, shall not be impaired without the consent of each such Holder.

(d) A waiver of an event of default under the Indenture by the Institutional Trustee at the written direction of the Holders of the Preferred Securities constitutes a waiver of the corresponding Event of Default. The foregoing provisions of this Section 2.6(d) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act.

SECTION 2.7 Event of Default; Notice.

(a) The Institutional Trustee shall, within 60 days after its occurrence, transmit by mail, first class postage prepaid, to the Holders, notice of each default with respect to the Securities actually known to a Responsible Officer, unless such default has been cured before the giving of such notice (the term “default” for the purposes of this Section 2.7(a) being hereby defined to be any default under the Indenture, not including any periods of grace provided for therein and irrespective of the giving of any notice provided therein); provided that, except for a default in the payment of principal of or interest on any of the Debentures, the Institutional Trustee shall be protected in withholding such notice if and so long as a Responsible Officer in good faith determines that the withholding of such notice is in the interests of the Holders; and provided further, that in the case of any default of the character specified in Section 5.01(c) of the

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Indenture, no such notice to Holders shall be given until at least 60 days after the occurrence thereof but shall be given within 90 days after such occurrence.

(b) The Institutional Trustee shall not be deemed to have knowledge of any default except:

(i) a default in the payment of principal of or interest on the Debentures; or

(ii) any default as to which the Institutional Trustee shall have received written notice or of which a Responsible Officer charged with the administration of the Declaration shall have actual knowledge.

ARTICLE III

ORGANIZATION

SECTION 3.1 Name.

The Trust is named “Colonial Capital Trust IV,” as such name may be modified from time to time by the Regular Trustees following written notice to the Holders. The Trust’s activities may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees.

SECTION 3.2 Office.

The address of the principal office of the Trust is c/o The Colonial BancGroup, Inc., One Commerce Street, P.O. Box 1108, Montgomery, Alabama 36101-1108. Upon ten (10) Business Days’ written notice to the Holders of Securities, the Regular Trustees may designate another principal office.

SECTION 3.3 Purposes.

The exclusive purposes and functions of the Trust are (i) to issue and sell (a) its Preferred Securities pursuant to the Purchase Agreement in exchange for cash and (b) its Common Securities to the Sponsor in exchange for cash, and to use the aggregate proceeds of the sale of the Securities to purchase the Debentures, (ii) to enter into such agreements and arrangements as may be necessary in connection with the issuance and sale of the Securities and to take all actions, and exercise such discretion, as may be necessary or desirable in connection with the issuance and sale of the Securities and to file such registration statements or make such other filings under the Securities Act, the Exchange Act or State securities or “Blue Sky” laws as may be necessary or desirable in connection with the offer and the issuance and sale of the Securities, (iii) to make distributions and (iv) except as otherwise limited herein, to engage in only those other activities necessary or incidental thereto. As more specifically provided in Section 3.7, the Trust shall not borrow money, incur debt, reinvest proceeds derived from investments, pledge any of its assets, or otherwise undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified for United States federal income tax purposes as a grantor trust.

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SECTION 3.4 Authority.

Subject to the limitations provided in this Declaration and to the specific duties of the Institutional Trustee, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. Any action taken by the Regular Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust and any action taken by the Institutional Trustee on behalf of the Trust in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Declaration.

SECTION 3.5 Title to Property of the Trust.

Except as provided in Section 3.8 with respect to the Debentures and the Institutional Trustee Account or as otherwise provided in this Declaration, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust.

SECTION 3.6 Powers and Duties of the Regular Trustees.

The Regular Trustees shall have the exclusive power, duty and authority to cause the Trust to engage in the following activities:

(a) to issue and sell the Securities in accordance with this Declaration; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities; and, provided further, that there shall be no interests in the Trust other than the Securities, and the issuance of Securities shall be limited to simultaneous issuance of both Preferred Securities and Common Securities on the Closing Date;

(b) in connection with the issue of the Preferred Securities, at the direction of the Sponsor, to:

(i) execute and file with the Commission one or more registration statements on Form S-3 prepared by the Sponsor, including any and all amendments thereto, pertaining to the Preferred Securities;

(ii) execute and file any documents prepared by the Sponsor, or take any acts as determined by the Sponsor to be necessary in order to qualify or register all or part of the Preferred Securities in any jurisdiction in which the Sponsor has determined to qualify or register such Preferred Securities for sale;

(iii) execute and file an application, prepared by the Sponsor, to the NYSE or any other national stock exchange or the NASDAQ Stock Market’s National Market for listing or quotation upon notice of issuance of any Preferred Securities;

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(iv) execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor, relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, as the case may be;

(v) execute and enter into the Purchase Agreement providing for the sale of the Preferred Securities; and

(vi) execute and deliver letters, documents or instruments with DTC.

(c) to acquire the Debentures with the proceeds of the sale of the Preferred Securities and the Common Securities, and to execute and deliver the Debenture Purchase Agreement; provided, however, that the Regular Trustees shall cause legal title to the Debentures to be held of record in the name of the Institutional Trustee for the benefit of the Holders;

(d) to give the Sponsor and the Institutional Trustee prompt written notice of the occurrence of a Special Event;

(e) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c) of the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of Securities as to such actions and applicable record dates;

(f) to take all actions and perform such duties as may be required of the Regular Trustees pursuant to the terms of the Securities set forth in Annex I hereto;

(g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust claims or demands of or against the Trust (“Legal Action”), unless pursuant to Section 3.8(e), the Institutional Trustee has the exclusive power to bring such Legal Action;

(h) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors and consultants and pay reasonable compensation for such services;

(i) to cause the Trust to comply with the Trust’s obligations under the Trust Indenture Act and, if applicable, the Exchange Act;

(j) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the Institutional Trustee, which certificate may be executed by any Regular Trustee;

(k) to incur expenses that are necessary or incidental to carry out any of the purposes of the Trust;

(l) to act as, or appoint another Person to act as, registrar, transfer agent and paying agent for the Preferred Securities;

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(m) to give prompt written notice to the Holders of any notice received from the Debenture Issuer of its election to defer payments of interest on the Debentures by extending the interest payment period under the Indenture;

(n) to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust’s valid existence, rights, franchises and privileges as a statutory trust under the laws of the State of Delaware and each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders or to enable the Trust to effect the purposes for which the Trust was created;

(o) to take any action, not inconsistent with this Declaration or with applicable law, that the Regular Trustees determine in their discretion to be necessary or desirable in carrying out the activities of the Trust as set out in this Section 3.6, including, but not limited to:

(i) causing the Trust not to be deemed to be an Investment Company required to be registered under the Investment Company Act;

(ii) causing the Trust to be classified for United States federal income tax purposes as a grantor trust; and

(iii) cooperating with the Debenture Issuer to ensure that the Debentures will be treated as indebtedness of the Debenture Issuer for United States federal income tax purposes,

provided that such actions do not materially adversely affect the interests of Holders;

(p) to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of the Trust; and

(q) to execute all certificates, documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing.

The Regular Trustees shall exercise the powers set forth in this Section 3.6 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Regular Trustees shall not take any action that is inconsistent with the purposes and functions of the Trust set forth in Section 3.3.

Subject to this Section 3.6, the Regular Trustees shall have none of the powers or the authority of the Institutional Trustee set forth in Section 3.8.

Any expenses incurred by the Regular Trustees pursuant to this Section 3.6 shall be reimbursed by the Debenture Issuer.

The Regular Trustees shall take all actions on behalf of the Trust that are not specifically required by this Declaration to be taken by any other Trustee.

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SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.

(a) The Trust shall not, and the Trustees (including the Institutional Trustee) shall not and shall cause the Trust not to, engage in any activity other than in connection with the purposes of the Trust or other than as required or authorized by this Declaration. In particular, the Trust shall not, and the Trustees (including the Institutional Trustee) shall not and shall cause the Trust not to:

(i) invest any proceeds received by the Trust from holding the Debentures, but shall distribute all such proceeds to Holders pursuant to the terms of this Declaration and the Securities;

(ii) acquire any assets other than as expressly provided herein;

(iii) possess Trust property for other than a Trust purpose or execute any mortgage in respect of, or pledge, any Trust property;

(iv) make any investments other than investments represented by the Debentures;

(v) possess any power or otherwise act in such a way as to vary the Trust assets or the terms of the Securities in any way whatsoever;

(vi) issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Securities;

(vii) make any loans other than in respect of the Debentures or incur any indebtedness for borrowed money; or

(viii) other than as provided in this Declaration or Annex I hereto, (A) direct the time, method and place of exercising any trust or power conferred upon the Debt Trustee with respect to the Debentures, (B) waive any past default that is waivable under the Indenture, (C) exercise any right to rescind or annul any declaration that the principal of all the Debentures held in the Trust shall be due and payable, or (D) consent to any amendment, modification or termination of the Indenture or the Debentures if such action would cause the Trust to be classified for United States federal income tax purposes as other than a grantor trust or would cause the Trust to be deemed an Investment Company required to be registered under the Investment Company Act.

SECTION 3.8 Powers and Duties of the Institutional Trustee.

(a) The legal title to the Debentures shall be owned by and held of record in the name of the Institutional Trustee in trust for the benefit of the Holders. The right, title and interest of the Institutional Trustee to the Debentures shall vest automatically in each Person who may hereafter be appointed as Institutional Trustee in accordance with Section 5.6. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Debentures have been executed and delivered.

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(b) The Institutional Trustee shall not transfer its right, title and interest in the Debentures to the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee does not also act as Delaware Trustee).

(c) The Institutional Trustee shall:

(i) establish and maintain a segregated non-interest bearing trust account (the “Institutional Trustee Account”) in the name of and under the exclusive control of the Institutional Trustee on behalf of the Holders and, upon the receipt of payments of funds made in respect of the Debentures held by the Institutional Trustee, deposit such funds into the Institutional Trustee Account and make payments to the Holders from the Institutional Trustee Account in accordance with Section 6.1. Funds in the Institutional Trustee Account shall be held uninvested until disbursed in accordance with this Declaration;

(ii) engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Securities to the extent the Debentures are redeemed or mature; and

(iii) upon written notice of distribution issued by the Regular Trustees in accordance with the terms of the Securities, engage in such ministerial activities as shall be necessary or appropriate to effect the distribution of the Debentures to Holders in accordance with the provisions of the Indenture.

(d) The Institutional Trustee shall take all actions and perform such duties as may be specifically required of the Institutional Trustee pursuant to the terms of the Securities.

(e) The Institutional Trustee shall take any Legal Action which arises out of or in connection with (i) an Event of Default of which a Responsible Officer has actual knowledge or (ii) the Institutional Trustee’s duties and obligations under this Declaration or the Trust Indenture Act. If the Institutional Trustee fails to enforce its rights under the Debentures after a Holder of Preferred Securities has made a written request, such Holder may, to the fullest extent permitted by law, institute a legal proceeding against the Debenture Issuer to enforce the Institutional Trustee’s rights under the Debentures without first instituting any legal proceeding against the Institutional Trustee or any other Person. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest (including Additional Interest and Compound Interest) on or principal of the Debentures on the date such interest or principal is otherwise payable (or in the case of redemption, on the redemption date), then a Holder of Preferred Securities may directly institute a proceeding for enforcement of payment to such Holder of the principal of or interest on the Debentures having aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities of such Holder (a “Direct Action”) on or after the respective due date specified in the Debentures. Notwithstanding any payments made to such Holder of Preferred Securities by the Debenture Issuer in connection with a Direct Action, the Debenture Issuer shall remain obligated to pay the principal of or interest on the Debentures held by the Trust or the Institutional Trustee of the Trust, and the Holders of the Common Securities shall be subrogated

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to the rights of the Holder of such Preferred Securities with respect to payments on the Preferred Securities to the extent of any payments made by the Debenture Issuer to such Holder in any Direct Action provided, however, that the Holder has received full payment in respect of such Preferred Securities. Except as provided in this paragraph and in the Preferred Securities Guarantee, the Holders of Preferred Securities will not be able to exercise directly any other remedy available to the holders of the Debentures.

(f) The Institutional Trustee shall not resign as a Trustee unless either:

(i) the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders pursuant to the terms of the Securities; or

(ii) a Successor Institutional Trustee has been appointed and has accepted that appointment in accordance with Section 5.6.

(g) The Institutional Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of Debentures under the Indenture and, if an Event of Default actually known to a Responsible Officer occurs and is continuing, the Institutional Trustee shall, for the benefit of Holders, enforce its rights as holder of the Debentures subject to the rights of the Holders pursuant to the terms of such Securities.

(h) The Institutional Trustee may authorize one or more Persons (each, a “Paying Agent”) to pay Distributions, the Redemption Price of the Liquidation Distribution, as the case may be, on behalf of the Trust with respect to all Securities and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the Institutional Trustee at any time and a successor Paying Agent or additional Paying Agents may be appointed at any time by the Institutional Trustee, in each case without prior notice to the Holders. The Paying Agent may perform such functions whenever the Institutional Trustee may do so. Each reference in this Declaration to payment to the Holders by the Institutional Trustee includes such payment by a Paying Agent. A Paying Agent has the same rights as the Institutional Trustee to deal with the Sponsor or an Affiliate, and itself may be the Trust, an Affiliate of the Trust or a Related Party of the Sponsor. The Institutional Trustee is hereby appointed to initially act as Paying Agent for the Securities.

(i) The Institutional Trustee shall give prompt written notice to the Holders of the Securities of any notice received by it from the Debenture Issuer of the Debenture Issuer’s election to defer payments of interest on the Debentures by extending the interest payment period with respect thereto.

(j) The Institutional Trustee shall notify all Holders of the Preferred Securities of any notice of an event of default received from the Debt Trustee with respect to the Debentures. Such notice shall state that such event of default under the Indenture also constitutes an Event of Default hereunder.

(k) Subject to this Section 3.8, the Institutional Trustee shall have none of the duties, liabilities, powers or the authority of the Regular Trustees set forth in Section 3.6.

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The Institutional Trustee shall exercise the powers set forth in this Section 3.8 and in Sections 3.9 and 3.10 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Institutional Trustee shall not take any action that is inconsistent with the purposes and functions of the Trust set out in Section 3.3.

SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.

(a) The Institutional 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 Declaration and no implied covenants shall be read into this Declaration against the Institutional Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) of which a Responsible Officer has actual knowledge, the Institutional Trustee shall exercise such of the rights and powers vested in it by this Declaration, 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.

(b) No provision of this Declaration shall be construed to relieve the Institutional 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 an 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 Institutional Trustee shall be determined solely by the express provisions of this Declaration and the Institutional Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Declaration, and no implied covenants or obligations shall be read into this Declaration against the Institutional Trustee; and

(B) in the absence of bad faith on the part of the Institutional Trustee, the Institutional 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 Institutional Trustee and conforming to the requirements of this Declaration; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Institutional Trustee, the Institutional Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Declaration;

(ii) the Institutional 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 Institutional Trustee was negligent in ascertaining the pertinent facts;

(iii) the Institutional Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of the Securities relating to the time, method and

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place of conducting any proceeding for any remedy available to the Institutional Trustee, or exercising any trust or power conferred upon the Institutional Trustee under this Declaration;

(iv) no provision of this Declaration shall require the Institutional 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 it 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 Declaration or adequate indemnity against such risk is not reasonably assured to it;

(v) the Institutional Trustee’s sole duty with respect to the custody, safekeeping and physical preservation of the Debentures and the Institutional Trustee Account shall be to deal with such property in a similar manner as the Institutional Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Institutional Trustee under this Declaration and the Trust Indenture Act;

(vi) the Institutional Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Debentures or the payment of any taxes or assessments levied thereon or in connection therewith;

(vii) the Institutional Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing with the Sponsor, and money held by the Institutional Trustee need not be segregated from other funds held by it except in relation to the Institutional Trustee Account maintained by the Institutional Trustee pursuant to Section 3.8(c)(i) and except to the extent otherwise required by law; and

(viii) the Institutional Trustee shall not be responsible for monitoring the compliance by the Regular Trustees or the Sponsor with their respective duties under this Declaration, nor shall the Institutional Trustee be liable for any default or misconduct of the Regular Trustees or the Sponsor.

SECTION 3.10 Certain Rights of the Institutional Trustee.

(a) Subject to the provisions of Section 3.9:

(i) the Institutional Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture 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 Sponsor or the Regular Trustees contemplated by this Declaration shall be sufficiently evidenced by an Officers’ Certificate;

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(iii) whenever in the administration of this Declaration, the Institutional Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Institutional 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 Sponsor or the Regular Trustees;

(iv) the Institutional 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 registration thereof;

(v) the Institutional Trustee may consult with counsel or other experts of its selection and the advice or opinion of such counsel and experts with respect to legal matters or advice within the scope of such experts’ area of expertise 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, which counsel may be counsel to the Sponsor or any of its Affiliates, and may include any of its employees. The Institutional Trustee shall have the right at any time to seek instructions concerning the administration of this Declaration from any court of competent jurisdiction;

(vi) the Institutional Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Declaration at the request, order or direction of any Holder, unless such Holder shall have provided to the Institutional Trustee security and indemnity reasonably satisfactory to the Institutional Trustee against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Institutional 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 Institutional Trustee; provided that, nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Declaration;

(vii) the Institutional 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, coupon or other paper or document, but the Institutional Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit;

(viii) the Institutional Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Institutional 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 Institutional Trustee or its agents hereunder shall bind the Trust and the Holders; and the signature of the Institutional Trustee or its agents

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alone shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the authority of the Institutional Trustee to so act or as to its compliance with any of the terms and provisions of this Declaration, both of which shall be conclusively evidenced by the Institutional Trustee’s or its agent’s taking such action;

(x) whenever in the administration of this Declaration the Institutional Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Institutional Trustee (i) may request instructions from the Holders which instructions may only be given by the Holders of the same proportion in aggregate liquidation amount of the Securities as would be entitled to direct the Institutional Trustee under the terms of the 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 conclusively relying on or acting in accordance with such instructions;

(xi) except as otherwise expressly provided by this Declaration, the Institutional Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Declaration; and

(xii) the Institutional Trustee may request that the Trust deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Declaration, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

(b) No provision of this Declaration shall be deemed to impose any duty or obligation on the Institutional 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 Institutional 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 Institutional Trustee shall be construed to be a duty.

SECTION 3.11 Delaware Trustee.

Notwithstanding any other provision of this Declaration other than Section 5.2, 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 Regular Trustees or the Institutional Trustee described in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Statutory Trust Act. Notwithstanding anything herein to the contrary, the Delaware Trustee shall not be liable for the acts or omissions to act of the Trust or of the Regular Trustees except for such acts as the Delaware Trustee is expressly obligated or authorized to undertake under this Declaration or the Statutory Trust Act and except for the negligence or willful misconduct of the Delaware Trustee.

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SECTION 3.12 Execution of Documents.

Except as otherwise required by applicable law, any one of the Regular Trustees is authorized to execute on behalf of the Trust any documents which the Regular Trustees have the power and authority to execute pursuant to Section 3.6.

SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.

The recitals contained in this Declaration and the Securities shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Declaration or the Securities.

SECTION 3.14 Duration of Trust.

The Trust, unless dissolved pursuant to the provisions of Article VIII hereof, shall have existence until [October] 1, 2033.

SECTION 3.15 Mergers.

(a) The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any Person or other entity, except as described in Section 3.15(b) and (c) or Section 8.1(a)(iii).

(b) The Trust may, with the consent of the Regular Trustees or, if there are more than two, a majority of the Regular Trustees, and without the consent of the Holders, the Institutional Trustee or the Delaware Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State of the United States; provided that:

(i) if the Trust is not the survivor, such successor entity (the “Successor Entity”) either:

(A) expressly assumes all of the obligations of the Trust under the Securities; or

(B) substitutes for the Preferred Securities other securities having substantially the same terms as the Preferred Securities (the “Successor Securities”) so long as the Successor Securities rank the same as the Preferred Securities rank with respect to Distributions and payments upon liquidation, redemption and otherwise;

(ii) the Debenture Issuer expressly acknowledges a trustee of the Successor Entity that possesses the same powers and duties as the Institutional Trustee as the holder of the Debentures;

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(iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or with another organization on which the Preferred Securities are then listed or quoted;

(iv) such merger, consolidation, amalgamation or replacement does not cause the rating on the Preferred Securities or any Successor Securities by any nationally recognized statistical rating organization to be downgraded or withdrawn;

(v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities or any Successor Securities in any material respect (other than with respect to any dilution of such Holders’ interests in the Successor Entity);

(vi) such Successor Entity has a purpose substantially identical to that of the Trust;

(vii) after giving effect to the transaction, no Event of Default and no event which, after notice or lapse of time, or both, would become an Event of Default, has occurred and is continuing under the Indenture.

(viii) prior to such merger, consolidation, amalgamation or replacement, the Debenture Issuer has received an opinion of a nationally recognized independent counsel to the Trust experienced in such matters to the effect that:

(A) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Preferred Securities or any Successor Securities in any material respect (other than with respect to any dilution of the Holders’ interest in the Successor Entity);

(B) following such merger, consolidation, amalgamation or replacement, neither the Trust nor the Successor Entity will be required to register as an Investment Company; and

(C) following such merger, consolidation, amalgamation or replacement, the Trust or, if applicable, the Successor Entity will be treated as a grantor trust for United States federal income tax purposes; and

(ix) the Sponsor guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Securities Guarantees and the Indenture.

(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the consent of Holders of 100% in aggregate liquidation amount of the Securities, consolidate, amalgamate, merge with or into, or be replaced by, any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it, if such consolidation, amalgamation, merger or

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replacement would cause the Trust or, if applicable, Successor Entity not to be classified as a grantor trust for United States federal income tax purposes.

ARTICLE IV

SPONSOR

SECTION 4.1 Sponsor’s Purchase of Common Securities.

On the Closing Date, the Sponsor will purchase all of the Common Securities issued by the Trust, in an amount at least equal to [3%] of the total capital of the Trust, immediately prior to the issuance of the Preferred Securities pursuant to the Purchase Agreement.

SECTION 4.2 Responsibilities of the Sponsor.

In connection with the issue and sale of the Preferred Securities, the Sponsor shall have the exclusive right and responsibility to engage in the following activities:

(a) to prepare for filing by the Trust with the Commission one or more registration statements on Form S-3 in relation to the Preferred Securities, including any amendments thereto;

(b) to determine the jurisdictions in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such jurisdictions;

(c) if so determined by the Sponsor, to prepare for filing by the Trust an application to the NYSE or any other national stock exchange or the NASDAQ National Market for listing or quotation upon notice of issuance of the Preferred Securities;

(d) if so determined by the Sponsor, to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, as the case may be, including any amendments thereto; and

(e) to negotiate the terms of the Purchase Agreement providing for the issuance of the Preferred Securities.

SECTION 4.3 Right to Proceed.

The Sponsor acknowledges the rights of the Holders to institute a Direct Action against the Debenture Issuer as set forth in Section 3.8(e) hereto.

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SECTION 4.4 Expenses.

In connection with the offering, sale and issuance of the Securities by the Trust and the sale of the Debentures by the Debenture Issuer to the Trust, the Debenture Issuer, in its capacity as borrower with respect to the Debentures, shall:

(a) pay all costs and expenses relating to the offering, sale and issuance of the Debentures, including commissions payable to the underwriters in respect of the Preferred Securities pursuant to the Purchase Agreement and compensation, reimbursement and indemnification of the Trustee under the Indenture in accordance with the provisions of Section 6.06 of the Indenture;

(b) be responsible for and shall pay all debts and obligations (other than with respect to the Securities) and all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization, maintenance and dissolution of the Trust, the offering, sale and issuance of the Securities (including commissions to the underwriters in connection therewith), the fees and expenses (including reasonable counsel fees and expenses) of the Institutional Trustee, the Delaware Trustee and the Regular Trustees (including any amounts payable under Article X of this Declaration), the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing and disposition of Trust assets and the enforcement by the Institutional Trustee of the rights of the Holders of the Preferred Securities);

(c) be primarily liable for any indemnification obligations arising with respect to this Declaration; and

(d) pay any and all taxes (other than United States withholding taxes attributable to the Trust or its assets) and all liabilities, costs and expenses with respect to such taxes of the Trust.

The Debenture Issuer’s obligations under this Section 4.4 shall be for the benefit of, and shall be enforceable by, any Person to whom such debts, obligations, costs, expenses and taxes are owed (a “Creditor”), whether or not such Creditor has received notice hereof. Any such Creditor may enforce the Debenture Issuer’s obligations under this Section 4.4 directly against the Debenture Issuer and the Debenture Issuer irrevocably waives any right of remedy to require that any such Creditor take any action against the Trust or any other Person before proceeding against the Debenture Issuer. The Debenture Issuer agrees to execute such additional agreements as may be necessary or desirable in order to give full effect to the provisions of this Section 4.4.

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ARTICLE V

TRUSTEES

SECTION 5.1 Number of Trustees.

(a) The number of Trustees initially shall be five. At any time before the issuance of any Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees. After the issuance of any Securities, the number of Trustees may be increased or decreased by vote of the Holders of Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; provided, however, that, the number of Trustees shall in no event be less than two; and provided further that (i) one Trustee shall possess the qualifications specified in Section 5.2; (ii) there shall be at least one Trustee who is an employee or officer of, or is affiliated with, the Sponsor (a ”Regular Trustee”); and (iii) one Trustee shall be the Institutional Trustee for so long as this Declaration is required to qualify as an indenture under the Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets the applicable requirements.

(b) Any action taken by Holders of Common Securities pursuant to this Article V shall be taken at a meeting of Holders of Common Securities convened for such purpose or by written consent of such Holders.

(c) Except as otherwise provided herein, no amendment may be made to this Section 5.1 which would change any rights with respect to the number, existence or appointment and removal of Trustees, except with the consent of each Holder of Common Securities.

SECTION 5.2 Delaware Trustee.

If required by the Statutory Trust Act, one Trustee (the “Delaware Trustee”) shall be:

(a) a natural person who is a resident of the State of Delaware; or

(b) if not a natural person, an entity which has its principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law, provided that, if the Institutional Trustee has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable law, then the Institutional Trustee shall also be the Delaware Trustee and Section 3.11 shall have no application.

The initial Delaware Trustee shall be The Bank of New York (Delaware), an affiliate of the Institutional Trustee, until removed or replaced in accordance with Section 5.6.

SECTION 5.3 Institutional Trustee; Eligibility.

(a) There shall at all times be one Trustee which shall act as Institutional Trustee which shall:

(i) not be an Affiliate of the Sponsor; and

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(ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the 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 fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this Section 5.3(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 Institutional Trustee shall cease to be eligible to so act under Section 5.3(a), the Institutional Trustee shall immediately resign in the manner and with the effect set forth in Section 5.6(c).

(c) If the Institutional Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act or becomes a creditor of the Sponsor during the time periods specified in Section 311 of the Trust Indenture Act, the Institutional Trustee and the Holder of the Common Securities (as if it were the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) and 311 of the Trust Indenture Act, as applicable.

(d) The Preferred Securities Guarantee shall be deemed to be specifically described in this Declaration for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

(e) The initial Institutional Trustee shall be The Bank of New York until removed or replaced in accordance with Section 5.6.

SECTION 5.4 Certain Qualifications of the Regular Trustees and the Delaware Trustee Generally.

Each Regular Trustee and the Delaware Trustee (unless the Institutional Trustee also acts as Delaware 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 Authorized Officers.

SECTION 5.5 Regular Trustees.

The initial Regular Trustees shall be Kamal S. Hosein, Sarah H. Moore and William A. McCrary.

(a) Except as expressly set forth in this Declaration and except if a meeting of the Regular Trustees is called with respect to any matter over which the Regular Trustees have power to act, any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular Trustee.

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(b) Except as otherwise required by applicable law, any one of the Regular Trustees is authorized to execute on behalf of the Trust any documents which the Regular Trustees have the power and authority to execute pursuant to Section 3.6.

(c) A regular Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purposes of signing any documents which the Regular Trustees have power and authority to cause the Trust to execute pursuant to Section 3.6.

SECTION 5.6 Appointment, Removal and Resignation of Trustees.

(a) Subject to Section 5.6(b), Trustees may be appointed or removed without cause at any time except during an Event of Default:

(i) until the issuance of any Securities, by written instrument executed by the Sponsor; and

(ii) unless an Event of Default shall have occurred and be continuing after the issuance of any Securities, by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; and

(iii) if an Event of Default shall have occurred and be continuing, with respect to:

(A) the Regular Trustees, by the vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities; and

(B) the Institutional Trustee and the Delaware Trustee, by the vote of the Holders of a Majority in Liquidation Amount of Preferred Securities voting as a class at a meeting of the Holders of the Preferred Securities.

(b) The Trustee that acts as

(i) Institutional Trustee shall not be removed in accordance with Section 5.6(a) until a successor institutional Trustee possessing the qualifications to act as Institutional Trustee under Section 5.3(a) (a “Successor Institutional Trustee”) has been appointed and has accepted such appointment by written instrument executed by such Successor Institutional Trustee and delivered to the Regular Trustees, the Sponsor and the Institutional Trustee being removed; and

(ii) Delaware Trustee shall not be removed in accordance with this Section 5.6(a) until a successor Trustee possessing the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a “Successor Delaware Trustee”) has been appointed and has accepted such appointment by written instrument executed by such Successor

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Delaware Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware Trustee being removed.

(c) A Trustee appointed to office shall hold office until his successor shall have been appointed or until his death, removal or resignation. Any Trustee may resign from office (without need for prior or subsequent accounting) by an instrument (a “Resignation Request”) in writing signed by the Trustee and delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that:

(i) no such resignation of the Trustee that acts as the Institutional Trustee shall be effective:

(A) until a Successor Institutional Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Institutional Trustee and delivered to the Trust, the Sponsor and the resigning Institutional Trustee; or

(B) until the assets of the Trust have been completely liquidated and the proceeds thereof distributed to the holders of the Securities; and

(ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be effective until a Successor Delaware Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Delaware Trustee and delivered to the Trust, the Sponsor and the resigning Delaware Trustee.

(d) The Holders of the Common Securities shall use their best efforts to promptly appoint a Successor Institutional Trustee or Successor Delaware Trustee as the case may be if the Institutional Trustee or the Delaware Trustee delivers a Resignation Request in accordance with this Section 5.6.

(e) If no Successor Institutional Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 5.6 within 60 days after delivery of a notice of removal or a Resignation Request, the Institutional Trustee or Delaware Trustee resigning or being removed, as applicable, may petition, at the expense of the Sponsor, any court of competent jurisdiction for appointment of a Successor Institutional Trustee or Successor Delaware Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper and prescribe, appoint a Successor Institutional Trustee or Successor Delaware Trustee, as the case may be.

(f) No Institutional Trustee or Delaware Trustee shall be liable for the acts or omissions to act of any Successor Institutional Trustee or Successor Delaware Trustee, as the case may be.

SECTION 5.7 Vacancies among Trustees.

If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1, a

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vacancy shall occur. A resolution certifying the existence of such vacancy by the Regular Trustees or, if there are more than two, a majority of the Regular Trustees, shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 5.6.

SECTION 5.8 Effect of Vacancies.

The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of Regular Trustees shall occur, until such vacancy is filled by the appointment of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in office, regardless of their number, shall have all the powers granted to the Regular Trustees and shall discharge all the duties imposed upon the Regular Trustees by this Declaration.

SECTION 5.9 Meetings.

If there is more than one Regular Trustee, meetings of the Regular Trustees shall be held from time to time upon the call of any Regular Trustee. Regular meetings of the Regular Trustees may be held at a time and place fixed by resolution of the Regular Trustees. Notice of any in-person meetings of the Regular Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such meeting. Notice of any telephonic meetings of the Regular Trustees or any committee thereof shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice of such meeting except where a Regular Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless provided otherwise in this Declaration, any action of the Regular Trustees may be taken at a meeting by vote of a majority of the Regular Trustees present (whether in person or by telephone) and eligible to vote with respect to such matter, provided that a Quorum is present, or without a meeting by the unanimous written consent of the Regular Trustees. In the event there is only one Regular Trustee, any and all action of such Regular Trustee shall be evidenced by a written consent of such Regular Trustee.

SECTION 5.10 Delegation of Power.

The Regular Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein.

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SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Institutional Trustee or the Delaware Trustee, as the case may be, may be merged or converted or with which either may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Institutional Trustee or the Delaware Trustee, as the case may be, shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Institutional Trustee or the Delaware Trustee, as the case may be, shall be the successor of the Institutional Trustee or the Delaware Trustee, as the case may be, hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

ARTICLE VI

DISTRIBUTIONS

SECTION 6.1 Distributions.

Holders shall receive Distributions in accordance with the applicable terms of the relevant Holder’s Securities as set forth in Annex I. If and to the extent that the Debenture Issuer makes a payment of interest (including Compound Interest and Additional Interest) on and/or principal of the Debentures held by the Institutional Trustee (the amount of any such payment being a “Payment Amount”), the Institutional Trustee shall and is directed, to the extent funds are available for that purpose, to make a distribution (a “Distribution”) of the Payment Amount to Holders in accordance with the terms of the Securities.

ARTICLE VII

ISSUANCE OF SECURITIES

SECTION 7.1 General Provisions Regarding Securities.

(a) The Regular Trustees shall on behalf of the Trust issue one class of preferred securities (the “Preferred Securities”), representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Annex I (which terms are incorporated by reference in, and made a part of, this Declaration as if specifically set forth herein) and one class of common securities (the “Common Securities”), representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Annex I (which terms are incorporated by reference in, and made a part of, this Declaration as if specifically set forth herein). The Trust shall issue no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities.

(b) The Certificates shall be signed on behalf of the Trust by two Regular Trustees. Such signature shall be the manual or facsimile signature of any present or any future Regular Trustees. Typographical and other minor errors or defects in any such reproduction of any such signature shall not affect the validity of any Security. In case any Regular Trustee of the Trust who shall have signed any of the Securities shall cease to be such Regular Trustee before the Certificates so signed shall be delivered by the Trust, such Certificates nevertheless may be

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delivered as though the person who signed such Certificates had not ceased to be such Regular Trustee; and any Certificate may be signed on behalf of the Trust by such persons who, at the actual date of execution of such Security, shall be the Regular Trustees of the Trust, although at the date of the execution and delivery of the Declaration any such person was not such a Regular Trustee. Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation of any stock exchange on which Securities may be listed, or to conform to usage. Pending the preparation of definitive Preferred Securities, the Regular Trustees on behalf of the Trust may execute and upon written order of any Regular Trustee, the Institutional Trustee shall authenticate, temporary Preferred Securities (printed, lithographed or typewritten), substantially in the form of the definitive Preferred Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Preferred Securities all as may be determined by the Regular Trustees on behalf of the Trust upon the same conditions and in substantially the same manner, and with like effect, as definitive Preferred Securities. Without unnecessary delay, the Regular Trustees on behalf of the Trust will execute and furnish and upon written order of any Regular Trustee the Institutional Trustee shall authenticate, definitive Preferred Securities and thereupon any or all temporary Preferred Securities may be surrendered to the transfer agent and registrar in exchange therefor (without charge to the Holders).

(c) At the time of the delivery of the Preferred Securities, the Regular Trustees shall cause Preferred Security Certificates to be authenticated by the Institutional Trustee on behalf of the Trust and delivered to or upon the written order of the Trust, signed by two Regular Trustees without further corporate action by the Sponsor, in authorized denominations. A Preferred Security Certificate shall not be valid until authenticated by the manual signature of an authorized signatory of the Institutional Trustee. The signature shall be conclusive evidence that the Preferred Security has been properly authenticated under this Declaration.

The Institutional Trustee may appoint an authenticating agent acceptable to the Trust to authenticate Preferred Securities. An authenticating agent may authenticate Preferred Securities whenever the Institutional Trustee may do so. Each reference in this Declaration to authentication by the Institutional Trustee includes authentication by such agent. An authenticating agent has the same rights as the Institutional Trustee to deal with the Sponsor or an Affiliate, and may itself be an Affiliate of the Trust or a Related Party of the Sponsor.

(d) The consideration received by the Trust for the issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust.

(e) Upon issuance of the Securities as provided in this Declaration, the Securities so issued shall be deemed to be validly issued, fully paid and nonassessable undivided beneficial interests in the assets of the Trust entitled to the benefits of this Declaration.

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(f) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Declaration.

SECTION 7.2 Paying Agent.

In the event that the Preferred Securities are not in book-entry only form, the Trust shall maintain in the Borough of Manhattan, The City of New York, State of New York, an office or agency where the Preferred Securities may be presented for payment (“Paying Agent”). The Regular Trustees may appoint the Paying Agent and may appoint one or more additional paying agents in such other locations as it shall determine. The term “Paying Agent” includes any additional paying agent. The Regular Trustees may change any Paying Agent without prior notice to any Holder. The Trust shall notify the Institutional Trustee of the name and address of any Agent not a party to this Declaration. If the Regular Trustees fail to appoint or maintain another entity as Paying Agent, the Institutional Trustee shall act as such. The Trust or any of its Affiliates may act as Paying Agent. The Bank of New York shall initially act as Paying Agent for the Preferred Securities and the Common Securities. Any successor Paying Agent or any additional Paying Agent shall execute and deliver to the Regular Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Regular 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, will give the Institutional Trustee notice of any default by the Trust (or any other obligor on the Securities) in the making of any payment on the Securities and will, at any time during the continuance of any such default, upon the written request of the Institutional Trustee, forthwith pay to the Institutional Trustee all sums so held in trust by such Paying Agent. The Paying Agent shall return all unclaimed funds to the Institutional Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Institutional Trustee. Any reference in this Declaration to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

SECTION 7.3 Outstanding Preferred Securities.

The Preferred Securities outstanding at any time are all the Preferred Securities authenticated by the Institutional Trustee except for those canceled by it, those delivered to it for cancellation, and those described in this Section as not outstanding.

If a Preferred Security is replaced, paid or purchased, it ceases to be outstanding unless the Institutional Trustee receives proof satisfactory to it that the replaced, paid or purchased Preferred Security is held by a bona fide purchaser.

If Preferred Securities are considered paid in accordance with the terms of this Declaration, they cease to be outstanding and Distributions on them shall cease to accumulate.

In determining whether the Holders of the required amount of Securities have concurred in any direction, waiver or consent, Preferred Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded and deemed not to be

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outstanding, except that for the purposes of determining whether the Institutional Trustee shall be fully protected in relying on any such direction, waiver or consent, only Securities which the Institutional Trustee actually knows are so owned shall be so disregarded.

ARTICLE VIII

DISSOLUTION AND TERMINATION OF TRUST

SECTION 8.1 Dissolution and Termination of Trust.

(a) The Trust shall dissolve:

(i) on April 1, 2034, the expiration of the term of the Trust;

(ii) upon the bankruptcy, insolvency or liquidation of the Sponsor or the Trust;

(iii) upon the entry of a decree of judicial dissolution of the Holder of the Common Securities, the Sponsor or the Trust;

(iv) upon the filing of a certificate of dissolution or its equivalent with respect to the Sponsor;

(v) upon the consent of the Holders of a Majority in Liquidation Amount of the Securities voting together as a single class to dissolve the Trust;

(vi) upon the revocation of the Sponsor’s charter and the expiration of 90 days after the date of revocation without a reinstatement thereof;

(vii) upon the distribution of all of the Debentures (at any time at the option of the Sponsor) to the Holders in exchange for all of the Securities in accordance with the terms of the Securities, subject to the Sponsor’s receipt of prior approval of the Federal Reserve Board if such approval is then required under applicable law, rules, guidelines or policies and the Sponsor’s receipt and delivery to the Institutional Trustee of an opinion of nationally recognized tax counsel that Holders will not recognize gain or loss for United States federal income tax purposes as a result of such distribution or exchange; or

(viii) when all of the Securities shall have been called for redemption and the amounts necessary for redemption thereof, including any Additional Interest or Compound Interest, shall have been paid to the Holders in accordance with the terms of the Securities.

(b) As soon as is practicable after the occurrence of an event referred to in Section 8.1(a) and after the completion of the winding up of the Trust, the Regular Trustees shall file a certificate of cancellation with the Secretary of State of the State of Delaware and the Trust shall thereupon be terminated.

(c) The provisions of Section 3.9 and Article X shall survive the termination of the Trust.

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ARTICLE IX

TRANSFER OF INTERESTS

SECTION 9.1 Transfer of Securities.

(a) Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Declaration and in the terms of the Securities. To the fullest extent permitted by law, any transfer or purported transfer of any Security not made in accordance with this Declaration shall be null and void.

(b) Subject to this Article IX, Preferred Securities shall be freely transferable.

(c) For so long as the Securities remain outstanding, the Sponsor agrees (i) not to transfer ownership of the Common Securities of the Trust, provided that any permitted successor of the Sponsor under the Indenture may succeed to the Sponsor’s ownership of the Common Securities, (ii) not to cause, as Sponsor of the Trust, or to permit, as Holder of the Common Securities, the dissolution, winding-up or liquidation of the Trust, except as provided in this Declaration and (iii) use its best efforts to cause the Trust (a) to remain a statutory trust, except in connection with the distribution of Debentures to the Holders in liquidation of the Trust, the redemption of all of the Securities, or certain mergers, consolidations or amalgamations, each as permitted by this Declaration, and (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes.

SECTION 9.2 Transfer of Certificates.

(a) The Regular Trustees shall provide for the registration of Certificates and of transfers of Certificates, which will be effected without charge but only upon payment (with such indemnity as the Regular Trustees may require) in respect of any tax or other government charges that may be imposed in relation to it. Upon surrender for registration of transfer of any Certificate, the Regular Trustees shall cause one or more new Certificates to be issued and authenticated by the Institutional Trustee in the name of the designated transferee or transferees. Every Certificate surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Regular Trustees duly executed by the Holder or such Holder’s attorney duly authorized in writing. Each Certificate surrendered for registration of transfer shall be canceled by the Regular Trustees. A transferee of a Certificate shall be entitled to the rights and subject to the obligations of a Holder hereunder upon the receipt by such transferee of a Certificate. By acceptance of a Certificate, each transferee shall be deemed to have agreed to be bound by this Declaration.

(b) Upon receipt by the Institutional Trustee of a Definitive Preferred Security Certificate, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Institutional Trustee, requesting transfer of such Definitive Preferred Security Certificate for a beneficial interest in a Global Certificate, the Institutional Trustee shall cancel such Definitive Preferred Security Certificate and cause, or direct the Depository Institution to cause, the aggregate liquidation amount of Preferred Securities represented by the appropriate Global Certificate to be increased accordingly. If no Global Certificates are then outstanding, the Trust

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shall issue and the Institutional Trustee shall authenticate, upon written order of any Regular Trustee, a Global Certificate representing an appropriate liquidation amount of Preferred Securities.

(c) Subject to Section 9.7, upon receipt by the Institutional Trustee from the Depository Institution or its nominee on behalf of any Person having a beneficial interest in a Global Certificate of written instructions or such other form of instructions as is customary for the Depository Institution or the person designated by the Depository Institution, requesting transfer of a beneficial interest in a Global Certificate for a Definitive Preferred Security Certificate, then the Institutional Trustee or the securities custodian, at the direction of the Institutional Trustee, will cause, in accordance with the standing instructions and procedures existing between the Depository Institution and the securities custodian, the aggregate liquidation amount of the Global Certificate to be reduced on its books and records and, following such reduction, the Trust will execute and the Institutional Trustee will authenticate and deliver to the transferee a Definitive Preferred Security Certificate.

Definitive Preferred Security Certificates issued in exchange for a beneficial interest in a Global Certificate shall be registered in such names and in such authorized denominations as the Depository Institution, pursuant to instructions from its Depository Institution Participants or indirect participants or otherwise, shall instruct the Institutional Trustee. The Institutional Trustee shall deliver such Preferred Securities to the persons in whose names such Preferred Securities are so registered in accordance with the instructions of the Depository Institution.

(d) Notwithstanding any other provisions of this Declaration, a Global Certificate may not be transferred as a whole except by the Depository Institution to a nominee of the Depository Institution or another nominee of the Depository Institution or by the Depository Institution or any such nominee to a successor Depository Institution or a nominee of such successor Depository Institution.

(e) The Institutional Trustee may appoint a transfer agent and registrar (“Transfer Agent”) acceptable to the Trust to perform the functions set forth in this Section 9.2. The Transfer Agent may perform such functions whenever the Institutional Trustee may do so. Each reference in this Declaration to registration and transfer of Preferred Securities by the Institutional Trustee includes such activities by the Transfer Agent. The Transfer Agent has the same rights as the Institutional Trustee to deal with the Sponsor or an Affiliate, and itself may be an Affiliate of the Trust or a Related Party of the Sponsor. The Institutional Trustee hereby appoints The Bank of New York to initially act as Transfer Agent for the Preferred Securities.

SECTION 9.3 Deemed Security Holders.

The Trust and the Trustees may treat the Person in whose name any Certificate shall be registered on the books and records of the Trust as the sole owner of such Certificate and of the Securities represented by such Certificate for purposes of receiving Distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Certificate or in the Securities represented by such Certificate on the part of any Person, whether or not the Trust shall have actual or other notice thereof.

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SECTION 9.4 Book-Entry Interests.

Unless otherwise specified in the terms of the Preferred Securities set forth in Annex I, the Preferred Securities Certificates, on original issuance, will be executed and issued by the Trust and authenticated by the Institutional Trustee in the form of one or more, fully-registered, global Preferred Security Certificates (each, a “Global Certificate”), to be delivered to DTC, the initial Depository Institution, by, or on behalf of, the Trust. Such Global Certificates shall initially be registered on the books and records of the Trust in the name of DTC or its nominee, and no Preferred Security Beneficial Owner will receive a definitive, fully registered Preferred Security Certificate (each, a “Definitive Preferred Security Certificate”) representing such Preferred Security Beneficial Owner’s interests in such Global Certificates, except as provided in Section 9.7. Unless and until definitive, fully registered Preferred Security Certificates have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:

(a) the provisions of this Section 9.4 shall be in full force and effect;

(b) the Trust and the Trustees shall be entitled to deal with the Depository Institution, with respect to such Preferred Security Beneficial Owners, for all purposes of this Declaration (including the payment of Distributions on the Global Certificates and receiving approvals, votes or consents hereunder) as the Holder of such Preferred Securities and the sole owner of the Global Certificates and shall have no obligation to such Preferred Security Beneficial Owners;

(c) to the extent that the provisions of this Section 9.4 conflict with any other provisions of this Declaration, the provisions of this Section 9.4 shall control; and

(d) the rights of such Preferred Security Beneficial Owners shall be exercised only through the Depository Institution and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and the Depository Institution and/or the Depository Institution Participants. The Depository Institution will make book-entry transfers among the Depository Institution Participants and receive and transmit payments of Distributions on the Global Certificates to such Depository Institution Participants.

Depository Institution Participants shall have no rights under this Declaration with respect to any Global Certificate held on their behalf by the Depository Institution or by the Institutional Trustee as the custodian of the Depository Institution or under such Global Certificate, and the Depository Institution may be treated by the Trust, the Institutional Trustee and any agent of the Trust or the Institutional Trustee as the absolute owner of such Global Certificate for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Trust, the Institutional Trustee or any agent of the Trust or the Institutional Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository Institution or impair, as between the Depository Institution and its Depository Institution Participants, the operation of customary practices of such Depository Institution governing the exercise of the rights of an owner of a beneficial interest in any Global Certificate.

At such time as all beneficial interests in a Global Certificate have either been exchanged for Definitive Preferred Security Certificates to the extent permitted by this Declaration or

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redeemed, repurchased or canceled in accordance with the terms of this Declaration, such Global Certificate shall be returned to the Depository Institution for cancellation or retained and canceled by the Institutional Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Certificate is exchanged for Definitive Preferred Security Certificates, or if Definitive Preferred Security Certificates are exchanged for a beneficial interest in a Global Certificate, Preferred Securities represented by such Global Certificate shall be reduced or increased and an adjustment shall be made on the books and records of the Institutional Trustee (if it is then the securities custodian for such Global Certificate) with respect to such Global Certificate, by the Institutional Trustee or the securities custodian, to reflect such reduction or increase.

SECTION 9.5 Notices to Depository Institution.

Whenever a notice or other communication to the Preferred Security Holders is required under this Declaration, unless and until Definitive Preferred Security Certificates shall have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all such notices and communications specified herein to be given to the Preferred Security Holders to the Depository Institution, and shall have no notice obligations to the Preferred Security Beneficial Owners.

SECTION 9.6 Appointment of Successor Depository Institution.

If the circumstances specified under clause (a) or (b) of Section 9.7 are applicable, the Regular Trustees may, in their sole discretion, appoint a successor Depository Institution with respect to such Preferred Securities.

SECTION 9.7 Definitive Preferred Security Certificates.

If:

(a) a Depository Institution elects to discontinue its services as securities depositary with respect to the Preferred Securities and a successor Depository Institution is not appointed within 90 days after such discontinuance pursuant to Section 9.6;

(b) a Depository Institution ceases to be a clearing agency under the Exchange Act;

(c) the Sponsor elects in its sole discretion to terminate the book-entry system through the Depository Institution with respect to some or all of the Preferred Securities, or

(d) an Event of Default, or event that with notice or the lapse of time or both, has occurred and is continuing,

then:

(e) Definitive Preferred Security Certificates shall be prepared by the Regular Trustees on behalf of the Trust with respect to the Preferred Securities represented by the related Global Certificate; and

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(f) upon surrender of the Global Certificates by the Depository Institution, accompanied by registration instructions, the Regular Trustees shall cause Definitive Preferred Security Certificates to be delivered to Preferred Security Beneficial Owners in accordance with the instructions of the Depository Institution. Neither the Trustees nor the Trust shall be liable for any delay in delivery of such instructions and each of them may conclusively rely on, and shall be protected in relying on, said instructions of the Depository Institution. The Definitive Preferred Security Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Preferred Securities may be listed, or to conform to usage.

SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.

If:

(a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of any Certificate; and

(b) there shall be delivered to the Regular Trustees, the Institutional Trustee or any authenticating agent such security or indemnity as may be reasonably required by them to keep each of them harmless,

then, in the absence of notice that such Certificate shall have been acquired by a protected purchaser, any Regular Trustee on behalf of the Trust shall execute and deliver and the Institutional Trustee shall authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In connection with the issuance of any new Certificate under this Section 9.8, the Regular Trustees 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 Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the relevant Securities, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

ARTICLE X

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1 Liability.

(a) Except as expressly set forth in this Declaration, the Securities Guarantees and the terms of the Securities, the Sponsor shall not be:

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(i) personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders which shall be made solely from assets of the Trust; and

(ii) be required to pay to the Trust or to any Holder any deficit upon dissolution of the Trust or otherwise.

(b) The Debenture Issuer shall be liable for all of the debts and obligations of the Trust (other than with respect to the Securities) to the extent not satisfied out of the Trust’s assets.

(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders 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.

SECTION 10.2 Exculpation.

(a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or bad faith with respect to such acts or omissions.

(b) An Indemnified Person shall be fully protected in conclusively relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders might properly be paid.

SECTION 10.3 Fiduciary Duty.

(a) To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Declaration shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Institutional Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person.

(b) Unless otherwise expressly provided herein:

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(i) whenever a conflict of interest exists or arises between an Indemnified Person and any Covered Person; or

(ii) whenever this Declaration or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder,

the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise.

(c) Whenever in this Declaration an Indemnified Person is permitted or required to make a decision:

(i) in its “discretion” or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or

(ii) in its “good faith” or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Declaration or by applicable law.

SECTION 10.4 Indemnification.

(a) (i) The Debenture Issuer shall indemnify, to the full extent permitted by law, any Company Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was a Company Indemnified Person, against expenses (including attorneys’ fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Company Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

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(ii) The Debenture Issuer shall indemnify, to the full extent permitted by law, any Company Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was a Company Indemnified Person against expenses (including attorneys’ fees and expenses) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Company Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper.

(iii) To the extent that a Company Indemnified Person shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim, issue or matter therein, such Company Indemnified Person shall be indemnified, to the full extent permitted by law, against expenses (including attorneys’ fees and expenses) actually and reasonably incurred by such Company Indemnified Person in connection therewith.

(iv) Any indemnification under paragraphs (i) and (ii) of this Section 10.4(a) (unless ordered by a court) shall be made by the Debenture Issuer only as authorized in the specific case upon a determination that indemnification of the Company Indemnified Person is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (i) and (ii). Such determination shall be made (1) by the Regular Trustees by a majority vote of a Quorum consisting of such Regular Trustees who were not parties to such action, suit or proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested Regular Trustees so directs, by independent legal counsel in a written opinion or (3) by the Common Security Holder of the Trust.

(v) Expenses (including attorneys’ fees and expenses) incurred by a Company Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Debenture Issuer as authorized in this Section 10.4(a). Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer if a determination is reasonably and promptly made (i) by the Regular Trustees by a majority vote of a Quorum of disinterested Regular Trustees, (ii) if such a Quorum is not

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obtainable, or, even if obtainable, if a Quorum of disinterested Regular Trustees so directs, by independent legal counsel in a written opinion or (iii) by the Debenture Issuer, that, based upon the facts known to the Regular Trustees, counsel or the Debenture Issuer, as the case may be, at the time such determination is made, such Company Indemnified Person acted in bad faith or in a manner that such person did not believe to be in, or believed was opposed to, the best interests of the Trust, or, with respect to any criminal proceeding, that such Company Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In no event shall any advance be made in instances where the Regular Trustees, independent legal counsel or Debenture Issuer reasonably determine that a Company Indemnified Person deliberately breached his duty to the Trust or its Common or Preferred Security Holders.

(vi) The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Debenture Issuer or Preferred Security Holders of the Trust or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. All rights to indemnification under this Section 10.4(a) shall be deemed to be provided by a contract between the Debenture Issuer and each Company Indemnified Person who serves in such capacity at any time while this Section 10.4(a) is in effect. Any repeal or modification of this Section 10.4(a) shall not affect any rights or obligations then existing.

(vii) The Debenture Issuer or the Trust may purchase and maintain insurance on behalf of any person who is or was a Company Indemnified Person against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Debenture Issuer would have the power to indemnify him against such liability under the provisions of this Section 10.4(a).

(viii) For purposes of this Section 10.4(a), references to “the Trust” shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 10.4(a) with respect to the resulting or surviving entity as he would have with respect to such constituent entity if its separate existence had continued.

(ix) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when authorized or ratified, continue as to a Person who has ceased to be a Company Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a Person.

(b) The Debenture Issuer agrees to indemnify the (i) Institutional Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and the Delaware Trustee and

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(iv) any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Institutional Trustee and the Delaware Trustee (each of the Persons in (i) through (iv) including the Institutional Trustee and the Delaware Trustee in their respective individual capacities, being referred to as a “Fiduciary Indemnified Person”) for, and to hold each Fiduciary Indemnified Person harmless against, any and all loss, liability, damage, action, suit, claim or expense including taxes (other than taxes based on the income of such Fiduciary Indemnified Person) of any kind and nature whatsoever incurred without negligence or bad faith on the part of such Fiduciary Indemnified Person, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending against or investigating any claim (regardless of who has asserted such claim) or liability in connection with the exercise or performance of any of the powers or duties of such Fiduciary Indemnified Person hereunder. The obligation to indemnify as set forth in this Section 10.4(b) shall survive the resignation or removal of the Institutional Trustee or the Delaware Trustee and the satisfaction and discharge of this Declaration.

(c) The Debenture Issuer agrees to pay the Institutional Trustee and the Delaware Trustee, from time to time, such compensation for all services rendered by the Institutional Trustee and the Delaware Trustee hereunder as may be mutually agreed upon in writing by the Debenture Issuer and the Institutional Trustee or the Delaware Trustee or the Delaware Trustee, as the case may be, and, except as otherwise expressly provided herein, to reimburse the Institutional Trustee and the Delaware Trustee upon its or their request for all reasonable expenses (including legal fees and expenses), disbursements and advances incurred or made by the Institutional Trustee or the Delaware Trustee, as the case may be, in accordance with the provisions of this Declaration, except any such expense, disbursement or advance as may be attributable to its or their negligence or bad faith.

SECTION 10.5 Outside Businesses

Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee (subject to Section 5.3(c)) 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 Trust, and the Trust and the Holders shall have no rights by virtue of this Declaration 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 Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee or the Institutional Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee 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 Covered Person, the Delaware Trustee and the Institutional Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates.

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SECTION 10.6 Compensation; Fees

The Sponsor agrees:

(a) to pay to the Trustees from time to time such compensation as the Trust and the Trustees shall agree to in writing for all services rendered by them hereunder (which compensation shall not be limited by any provision of law in regard to compensation of a trustee of an express trust);

(b) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Declaration (including the reasonable compensation and the expenses and disbursements of their respective agents and counsel), except any such expense, disbursement or advance as may be attributable to their respective negligence or bad faith; and

(c) the provisions of this Section 10.6 shall survive the termination of this Declaration and the resignation or removal of the Trustees.

ARTICLE XI

ACCOUNTING

SECTION 11.1 Fiscal Year.

The fiscal year (“Fiscal Year”) of the Trust shall be the calendar year, or such other year as is required by the Code.

SECTION 11.2 Certain Accounting Matters.

(a) At all times during the existence of the Trust, the Regular Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year of the Trust by a firm of independent certified public accountants selected by the Regular Trustees. The books and records of the Trust, together with a copy of the Declaration and a certified copy of the Certificate of Trust, and any amendment thereto shall at all times be maintained at the principal office of the Trust and shall be open for inspection for any examination by any Holder or its duly authorized representative for any purpose reasonably related to its interest in the Trust during normal business hours.

(b) The Regular Trustees shall cause to be prepared and delivered to each of the Holders, within 90 days after the end of each Fiscal Year of the Trust, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year, and the related statements of income or loss;

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(c) The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders, any annual United States federal income tax information statement, required by the Code, containing such information with regard to the Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Regular Trustees shall endeavor to deliver all such statements within 30 days after the end of each Fiscal Year of the Trust.

(d) The Regular Trustees shall cause to be duly prepared and filed with the appropriate taxing authority, an annual United States federal income tax return, on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Regular Trustees on behalf of the Trust with any state or local taxing authority.

SECTION 11.3 Banking.

The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Debentures held by the Institutional Trustee shall be made directly to the Institutional Trustee Account and no other funds of the Trust shall be deposited in the Institutional Trustee Account. The sole signatories for such accounts shall be designated by the Regular Trustees; provided, however, that the Institutional Trustee shall designate the signatories for the Institutional Trustee Account.

SECTION 11.4 Withholding.

The Trust and the Regular Trustees shall comply with all withholding requirements under United States federal, State and local law. The Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Regular Trustees shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Holder, the amount withheld shall be deemed to be a distribution in the amount of the withholding to the Holder. In the event of any claimed over withholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Trust may reduce subsequent Distributions by the amount of such withholding.

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ARTICLE XII

AMENDMENTS AND MEETINGS

SECTION 12.1 Amendments.

(a) Except as otherwise provided in this Declaration or by any applicable terms of the Securities, this Declaration may only be modified and amended by a written instrument approved and executed by:

(i) the Regular Trustees (or, if there are more than two Regular Trustees, a majority of the Regular Trustees);

(ii) if the amendment affects the rights, powers, duties, obligations or immunities of the Institutional Trustee, the Institutional Trustee; and

(iii) if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee;

(b) No amendment shall be made, and any such purported amendment shall be void and ineffective:

(i) unless, in the case of any proposed amendment, the Institutional Trustee shall have first received an Officers’ Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities);

(ii) unless, in the case of any proposed amendment which affects the rights, powers, duties, obligations or immunities of the Institutional Trustee, the Institutional Trustee shall have first received:

(A) an Officers’ Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); and

(B) an opinion of counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); and

(iii) to the extent the result of such amendment would be to:

(A) cause the Trust to fail to continue to be classified for purposes of United States federal income taxation as a grantor trust;

(B) reduce or otherwise adversely affect the powers of the Institutional Trustee in contravention of the Trust Indenture Act; or

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(C) cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act.

(c) At such time after the Trust has issued any Securities that remain outstanding, any amendment that would adversely affect the rights, privileges or preferences of any Holder may be effected only with such additional requirements as may be set forth in the terms of such Securities;

(d) Sections 3.8(e), 4.4, 9.1(c), 10.1(c) and this Section 12.1 shall not be amended without the consent of all of the Holders of the Securities;

(e) Article IV shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities;

(f) The rights of the Holders of the Common Securities under Article V to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities; and

(g) Notwithstanding Section 12.1(c), this Declaration may be amended by the Regular Trustees without the consent of the Holders to:

(i) cure any ambiguity;

(ii) correct or supplement any provision in this Declaration that may be defective or inconsistent with any other provision of this Declaration;

(iii) add to the covenants, restrictions or obligations of the Sponsor;

(iv) conform to any change in Rule 3a-5 or written change in interpretation or application of Rule 3a-5 by any legislative body, court, government agency or regulatory authority, which amendment does not have a material adverse effect on the right, preferences or privileges of the Holders; and

(v) preserve the status of the Trust as a grantor trust for United States federal income tax purposes, which amendment does not have a material adverse effect on the right, preferences or privileges of the Holders.

SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.

(a) Meetings of the Holders of any class of Securities may be called at any time by the Regular Trustees (or as provided in the terms of the Securities) to consider and act on any matter on which Holders of such class of Securities are entitled to act under the terms of this Declaration, the terms of the Securities or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading. The Regular Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of at least 10% in liquidation amount of such class of Securities. Such direction shall be given by delivering to the Regular Trustees one or more calls in a writing stating that the signing Holders wish to call a meeting and indicating

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the general or specific purpose for which the meeting is to be called. Any Holders calling a meeting shall specify in writing the Certificates held by the Holders exercising the right to call a meeting and only those Securities specified shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met.

(b) Except to the extent otherwise provided in the terms of the Securities, the following provisions shall apply to meetings of Holders:

(i) notice of any such meeting shall be given to all the Holders having a right to vote thereat at least 7 days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders is permitted or required under this Declaration or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders. Any action that may be taken at a meeting of the Holders may be taken without a meeting and without prior notice if a consent in writing setting forth the action so taken is signed by the Holders owning not less than the minimum amount of Securities in liquidation amount that would be necessary to authorize or take such action at a meeting at which all Holders having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders entitled to vote who have not consented in writing. The Regular Trustees may specify that any written ballot submitted to the Holders for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Regular Trustees;

(ii) each Holder may authorize any Person to act for it by proxy on all matters in which a Holder is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder executing it. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders were stockholders of a Delaware corporation;

(iii) each meeting of the Holders shall be conducted by the Regular Trustees or by such other Person that the Regular Trustees may designate; and

(iv) subject to the requirements specified in the Statutory Trust Act, this Declaration, the terms of the Securities, the Trust Indenture Act and the listing rules of any stock exchange on which the Preferred Securities are then listed or trading, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote.

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ARTICLE XIII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

AND DELAWARE TRUSTEE

SECTION 13.1 Representations and Warranties of Institutional Trustee.

The Trustee that acts as initial Institutional Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Institutional Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Institutional Trustee’s acceptance of its appointment as Institutional Trustee that:

(a) the Institutional Trustee is a banking corporation, a national banking association or a bank or trust company, duly organized, validly existing and in good standing under the laws of the United States or any state thereof, as the case may be, with corporate power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration;

(b) the execution, delivery and performance by the Institutional Trustee of this Declaration have been duly authorized by all necessary corporate action on the part of the Institutional Trustee; this Declaration has been duly executed and delivered by the Institutional Trustee and constitutes the legal, valid and binding obligation of the Institutional Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors’ rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); and the Institutional Trustee has duly authenticated the Preferred Securities;

(c) the execution, delivery and performance of this Declaration by the Institutional Trustee do not conflict with or constitute a breach of the charter or by-laws of the Institutional Trustee;

(d) no consent, approval or authorization of, or registration with or notice to, any State or federal banking authority is required for the execution, delivery or performance by the Institutional Trustee of this Declaration;

(e) on the Closing Date, the Institutional Trustee will be the record holder of the Debentures and the Institutional Trustee has not knowingly created any liens or encumbrances on such Debentures; and

(f) the Institutional Trustee satisfies the qualifications set forth in Section 5.3.

SECTION 13.2 Representations and Warranties of Delaware Trustee.

The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee’s acceptance of its appointment as Delaware Trustee that:

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(a) the Delaware Trustee is a Delaware banking corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, with authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration;

(b) the execution, delivery and performance by the Delaware Trustee of this Declaration have been duly authorized by all necessary corporate action on the part of the Delaware Trustee; this Declaration has been duly executed and delivered by the Delaware Trustee and constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors’ rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law);

(c) no consent, approval or authorization of, or registration with or notice to, any State or Federal banking authority is required for the execution, delivery or performance by the Delaware Trustee of this Declaration; and

(d) the Delaware Trustee is a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and meets the requirements of Section 5.2.

ARTICLE XIV

MISCELLANEOUS

SECTION 14.1 Notices.

All notices provided for in this Declaration shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows:

(a) if given to the Trust, in care of the Regular Trustees at the Trust’s mailing address set forth below (or such other address as the Trust may give notice of to the Holders):

Colonial Capital Trust IV

c/o The Colonial BancGroup, Inc.

One Commerce Street

P.O. Box 1108

Montgomery, Alabama 36101-1108

Attention: William A. McCrary, General Counsel

(b) if given to the Delaware Trustee, at the mailing address set forth below (or such other address as the Delaware Trustee may give notice of to the Holders):

The Bank of New York (Delaware)

White Clay Center

Route 273

Newark, Delaware 19711

Attention: Corporate Trust Administration

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with a copy to:

The Bank of New York

c/o The Bank of New York Trust Company of Florida, N.A.

10161 Centurion Parkway

Jacksonville, Florida 32256

Attention: Corporate Trust Administration

(c) if given to the Institutional Trustee, at the Institutional Trustee’s mailing address set forth below (or such other address as the Institutional Trustee may give notice of to the Holders):

The Bank of New York

c/o The Bank of New York Trust Company of Florida, N.A.

10161 Centurion Parkway

Jacksonville, Florida 32256

Attention: Corporate Trust Administration

(d) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set forth below (or such other address as the Holder of the Common Securities may give notice to the Trust):

The Colonial BancGroup, Inc.

One Commerce Street

P.O. Box 1108

Montgomery, Alabama 36101-1108

Attention: William A. McCrary, General Counsel

(e) if given to any other Holder, 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.

SECTION 14.2 Governing Law.

THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

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SECTION 14.3 Intention of the Parties.

It is the intention of the parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Declaration shall be interpreted to further this intention of the parties.

SECTION 14.4 Headings.

Headings contained in this Declaration are inserted for convenience of reference only and do not affect the interpretation of this Declaration or any provision hereof.

SECTION 14.5 Successors and Assigns.

Whenever in this Declaration any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed.

SECTION 14.6 Partial Enforceability.

If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

SECTION 14.7 Counterparts.

This Declaration may contain more than one counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

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IN WITNESS WHEREOF, the undersigned have caused these presents to be executed as of the day and year first above written.

Kamal S. Hosein, as Regular Trustee

William A. McCrary, as Regular Trustee

Sarah H. Moore, as Regular Trustee

THE BANK OF NEW YORK (DELAWARE),

as Delaware Trustee

Name:

Title:

THE BANK OF NEW YORK,

as Institutional Trustee

Name:

Title:

THE COLONIAL BANCGROUP, INC.

as Sponsor, Common Securities Holder and

Debenture Issuer

Name: Sarah H. Moore

Title: Chief Financial Officer

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ANNEX I

TERMS OF ·% PREFERRED SECURITIES

TERMS OF ·% COMMON SECURITIES

Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of September ·, 2003 (as amended from time to time, the “Declaration”), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Securities are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration or, if not defined in the Declaration, as defined in the Prospectus):

1. Designation and Number.

(a) Preferred Securities. Up to 4,000,000 Preferred Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of one hundred million dollars ($100,000,000) and a liquidation amount with respect to the assets of the Trust of $25 per preferred security, are hereby designated for the purposes of identification only as “·% Preferred Securities” (the “Preferred Securities”). The Preferred Security Certificates evidencing the Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Preferred Securities are listed.

(b) Common Securities. Up to · Common Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of · dollars ($·) and a liquidation amount with respect to the assets of the Trust of $25 per common security, are hereby designated for the purposes of identification only as “·% Common Securities” (the “Common Securities”). The Common Security Certificates evidencing the Common Securities shall be substantially in the form of Exhibit A-2 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice.

(c) The Preferred Securities and the Common Securities (referred to collectively as the “Securities”) represent undivided beneficial interests in the assets of the Trust.

(d) In connection with the purchase of the Securities, the Sponsor will deposit in the Trust, and the Trust will purchase, respectively, as trust assets, Debentures of the Sponsor having an aggregate principal amount of up to · dollars ($·), and bearing interest at an annual rate equal to the annual Distribution rate on the Securities and having payment and prepayment/maturity provisions which correspond to the payment and redemption provisions of the Securities.

2. Distributions.

(a) Distributions payable on each Security will be fixed at a rate per annum of ·% (the “Coupon Rate”) of the liquidation amount of $25 per Security, such rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee. Distributions in arrears beyond the applicable Distribution Payment Date (as defined below) will bear interest thereon compounded quarterly at the Coupon Rate (“Compound Interest”) (to the extent permitted by

applicable law). The term “Distributions,” as used herein, includes such cash distributions and any such interest (including Additional Interest and Compound Interest) payable unless otherwise stated. A Distribution will be made by the Institutional Trustee only to the extent that payments are made in respect of the Debentures held by the Institutional Trustee and to the extent the Trust has funds available in the Institutional Trustee Account. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months and for any period shorter than a full quarterly Distribution period, on the basis of the actual number of days elapsed in a calendar month (but not to exceed 30 days in any month).

(b) Distributions on the Securities will be cumulative, will accrue from September ·, 2003 and, except as otherwise described below, will be payable quarterly in arrears, on January 1, April 1, July 1 and October 1 of each year, commencing on [October] 1, 2003 when, as and if available for payment, except as otherwise described below (each, a “Distribution Payment Date”). So long as no Event of Default under the Indenture has occurred and is continuing, the Debenture Issuer has the right under the Indenture to defer payments of interest on the Debentures by extending the interest payment period from time to time on the Debentures for a period not exceeding 20 consecutive quarterly periods (each, an “Extension Period”), during which Extension Period no interest shall be due and payable on the Debentures, provided that no Extension Period shall last beyond the Stated Maturity or earlier prepayment of the Debentures. As a consequence of such deferral, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly (to the extent permitted by law) during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period; provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarterly periods or extend beyond the Stated Maturity or earlier prepayment of the Debentures. Any interest accrued on the Debentures during an Extension Period shall be paid Pro Rata to holders of Debentures on the first payment date following the Extension Period and the Payment Amount shall be paid Pro Rata to the Holders on the first Distribution Payment Date following the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. In the event that the Debenture Issuer exercises this right, then (i) the Debenture Issuer shall not declare or pay any dividend on, make a distribution or other payment with respect to, or redeem, purchase, acquire, or make a liquidation payment relating to, any of its capital stock (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Debenture Issuer in connection with employee benefit plans, (b) as a result of an exchange or conversion of any class or series of such capital stock for any other class or series of the Debenture Issuer’s capital stock or (c) the purchase of fractional interests in shares of the Debenture Issuer’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged), (ii) the Debenture Issuer shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Debenture Issuer that rank pari passu with or junior to such Debentures and (iii) the Debenture Issuer shall not make any guarantee payments with respect to the foregoing (other than pursuant to the Preferred Securities Guarantee).

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(c) Distributions on the Securities will be payable promptly by the Institutional Trustee upon receipt of immediately available funds to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates, which will be, as long as the Preferred Securities remain in book-entry form, the close of business on the Business Day prior to the relevant Distribution Payment Date and, in the event the Preferred Securities are not in book-entry form, the fifteenth calendar day prior to the relevant Distribution Payment Date. The record dates and Distribution Payment Dates shall be the same as the record dates and interest payment dates on the Debentures. Distributions payable on any Securities that are not punctually paid on any Distribution Payment Date, as a result of the Debenture Issuer having failed to make the corresponding interest payment on the Debentures, will forthwith cease to be payable to the Person in whose name such Securities are registered on the relevant record date, and such defaulted Distribution will instead be payable to the Person in whose name such Securities are registered on the special record date established by the Regular Trustees, which record date shall correspond to the special record date or other specified date determined in accordance with the Indenture; provided, however, that Distributions shall not be considered payable on any Distribution Payment Date falling within an Extension Period unless the Debenture Issuer has elected to make a full or partial payment of interest accrued on the Debentures on such Distribution Payment Date. Distributions on the Securities will be paid by the Trust. All Distributions paid with respect to the Securities shall be paid on a Pro Rata basis to Holders thereof entitled thereto. If any date on which Distributions are payable on the Securities is not a Business Day, then payment of the Distributions payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date.

(d) If at any time while the Institutional Trustee is the Holder of any Securities, the Trust or the Institutional Trustee is required to pay any taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any such case, the Debenture Issuer will pay as additional interest (“Additional Interest”) on the Debentures held by the Institutional Trustee, such amounts as shall be required so that the net amounts received and retained by the Trust and the Institutional Trustee after paying any such taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust and the Institutional Trustee would have received had no such taxes, duties, assessments or other governmental charges been imposed.

(e) In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed Pro Rata among the Holders.

3. Liquidation Distribution Upon Dissolution.

In the event of any dissolution of the Trust (other than in connection with the redemption of the Securities), the Trust shall be liquidated by the Regular Trustees as expeditiously as the Regular Trustees determine to be possible by distributing to the Holders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, a Like Amount (as defined

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below) of the Debentures, unless such distribution is determined by the Institutional Trustee not to be practicable, in which event such Holders will be entitled to receive out of the assets of the Trust legally available for distribution to Holders, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, an amount equal to the aggregate of the liquidation amount of $25 per Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the “Liquidation Distribution”).

“Like Amount” means (i) with respect to a redemption of the Securities, Securities having a liquidation amount equal to the principal amount of Debentures to be paid in accordance with their terms and (ii) with respect to a distribution of Debentures upon the liquidation of the Trust, Debentures having a principal amount equal to the liquidation amount of the Securities of the Holder to whom such Debentures are distributed.

If, upon any such liquidation, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets legally available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust with respect to the Securities shall be paid on a Pro Rata basis.

4. Redemption and Distribution.

(a) Redemption of the Securities will occur simultaneously with any repayment of the Debentures, whether at maturity or earlier prepayment. The Debentures will mature on [October] 1, 2033 (the “Stated Maturity”), unless prepaid earlier as provided in this Section 4.

Upon the repayment of the Debentures in whole or in part, whether at maturity or earlier prepayment, the proceeds from such repayment shall be simultaneously applied to redeem Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so repaid at the Redemption Price. The “Redemption Price” shall be $25 per Security plus an amount equal to unpaid Distributions thereon accumulated to the date of redemption, payable in cash. If fewer than all the outstanding Securities are to be so redeemed, the Securities will be redeemed Pro Rata and the Preferred Securities to be redeemed will be as described in Section 4(f)(ii) below. Any prepayment of the Debentures and related redemption of Preferred Securities under subsection (b) below may require the prior approval of the Federal Reserve Board if such approval is then required under applicable law, rules, guidelines or policies.

(b) The Debentures are prepayable prior to the Stated Maturity at the option of the Company (i) in whole or in part, from time to time, on or after [October] 1, 2008 or (ii) at any time prior to [October] 1, 2008, in whole but not in part, upon the occurrence and continuation of a Special Event, in either case at a prepayment price (the “Prepayment Price”) equal to 100% of the principal amount thereof plus unpaid interest thereon (including Additional Interest and Compound Interest, if any) accrued to the date of prepayment.

(c) The following terms used herein shall be defined as follows:

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“Investment Company Event” means that the Regular Trustees shall have received an opinion of nationally recognized independent counsel experienced in such matters, who shall not be an officer or employee of the Sponsor or any of its Affiliates, 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 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 Preferred Securities.

“Regulatory Capital Event” means that the Debenture Issuer shall have received an opinion of nationally recognized independent bank regulatory counsel experienced in such matters, who shall not be an officer or employee of the Sponsor or any of its Affiliates, to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any rules, guidelines or policies of the Federal Reserve Board or (b) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such pronouncement or decision is announced on or after the date of original issuance of the Securities, the Preferred Securities do not constitute, or within 90 days of the date thereof, will not constitute, Tier 1 capital (or its equivalent) for purposes of the Federal Reserve Board’s capital guidelines for bank holding companies; provided, however, that the distribution of the Debentures in connection with the liquidation of the Trust by the Debenture Issuer and the treatment thereafter of the Debentures as other than Tier 1 capital shall not in and of itself constitute a Regulatory Capital Event.

“Special Event” means a Tax Event, an Investment Company Event or a Regulatory Capital Event, as the case may be.

“Tax Event” means that the Regular Trustees shall have received an opinion of a nationally recognized independent tax counsel experienced in such matters, who shall not be an officer or employee of the Sponsor or any of its Affiliates, to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws or any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein or (b) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such pronouncement or decision is announced on or after the date of the original issuance of the Debentures, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Debentures, (ii) interest payable on the Debentures is not, or within 90 days of the date thereof will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes or (iii) the Trust is, or will be within 90 days of the date thereof, subject to more than a de minimis amount of other taxes, duties or other governmental charges.

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(d) The Trust may not redeem fewer than all the outstanding Securities unless all accumulated and unpaid Distributions have been paid on all Securities for all quarterly Distribution periods terminating on or before the date of redemption.

(e) The Debenture Issuer will have the right at any time to dissolve the Trust and cause the Debentures to be distributed to the Holders, subject to the prior approval of the Federal Reserve Board if such approval is then required under applicable law, rules, guidelines or policies and the receipt by the Debenture Issuer of an opinion of a nationally recognized tax counsel that Holders will not recognize gain or loss for United States Federal income tax purposes as a result of such distribution or exchange. If the Debentures are distributed to the Holders and the Preferred Securities are then listed on an exchange, the Debenture Issuer will use its best efforts to cause the Debentures to be listed on the NYSE or on such other exchange as the Preferred Securities are then listed.

On the date fixed for any distribution of Debentures upon dissolution of the Trust, (i) the Preferred Securities will no longer be deemed to be outstanding, (ii) the Depository Institution or its nominee, as the record holder of the Preferred Securities, will receive a registered global certificate or certificates representing the Debentures to be delivered upon such distribution and (iii) any certificates representing Preferred Securities not held by the Depository Institution or its nominee will be deemed to represent Debentures having an aggregate principal amount equal to the aggregate liquidation amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest equal to accumulated and unpaid Distributions on, such Preferred Securities until such certificates are presented to the Debenture Issuer or its agent for transfer or reissuance.

(f) Redemption or Distribution Procedures.

(i) Notice of any prepayment of the Debentures, or notice of distribution of Debentures in exchange for the Securities (a “Redemption/Distribution Notice”) will be given by the Trust by mail to each Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than 60 days before the date fixed for redemption or exchange thereof which, in the case of a redemption, will be the date fixed for prepayment of the Debentures. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this Section 4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, to Holders. Each Redemption/Distribution Notice shall be addressed to the Holders at the address of each such Holder appearing in the books and records of the Trust. No defect in the Redemption/Distribution Notice or in the mailing of either thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder.

(ii) In the event that fewer than all the outstanding Securities are to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each Holder, it being understood that, in respect of Preferred Securities registered in the name of and

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held of record by the Depository Institution or its nominee, the distribution of the proceeds of such redemption will be made to each Depository Institution Participant (or Person on whose behalf such nominee holds such securities) in accordance with the procedures applied by such agency or nominee.

(iii) If Securities are to be redeemed and the Trust gives a Redemption/Distribution Notice, which notice may only be issued if the Debentures are redeemed as set out in this Section 4 (which notice will be irrevocable), then by 10:00 a.m., New York City time, on the redemption date, the Debenture Issuer will deposit with one or more paying agents an amount of money sufficient to redeem on the redemption date all the Securities so called for redemption at the Redemption Price. If a Redemption/Distribution Notice shall have been given and funds deposited as required, if applicable, then immediately prior to the close of business on the date of such deposit, or on the redemption date, as applicable, Distributions will cease to accrue on the Securities so called for redemption and all rights of Holders of such Securities so called for redemption will cease, except the right of the Holders of such Securities to receive the Redemption Price, but without interest on such Redemption Price. On presentation and surrender of such Securities at a place of payment specified in said notice, the said Securities or the specified portions thereof shall be paid and redeemed by the Trust at the Redemption Price. Neither the Regular Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Securities that have been so called for redemption. If any date fixed for redemption of Securities 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 (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of any Securities is improperly withheld or refused and not paid either by the Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant Securities Guarantee, Distributions on such Securities will continue to accumulate from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price.

(iv) The Trust shall not be required to (i) issue, or register the transfer or exchange of, any Securities during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of Securities and ending at the close of business on the day of the mailing of the relevant notice of redemption and (ii) register the transfer or exchange of any Securities so selected for redemption, in whole or in part, except the unredeemed portion of any Securities being redeemed in part.

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(v) Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws and regulations of the Federal Reserve Board), the Sponsor or any of its subsidiaries may at any time and from time to time purchase outstanding Preferred Securities by tender, in the open market or by private agreement.

5. Voting Rights - Preferred Securities.

(a) Except as provided under Sections 5(b), 6(b) and 7 and as otherwise required by law and the Declaration, the Holders of the Preferred Securities will have no voting rights.

(b) Subject to the requirements set forth in the immediately following paragraph, the Holders of a Majority in Liquidation Amount of Preferred Securities, voting separately as a class, have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Institutional Trustee, or to direct the exercise of any trust or power conferred upon the Institutional Trustee under the Declaration, including the right to direct the Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies available to it under the Indenture as holder of the Debentures, (ii) waive any past Event of Default and its consequences that is waivable under 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; provided, however, that, where a consent or action under the Indenture would require the consent or act of a Super Majority, only the Holders of at least such Super Majority in aggregate liquidation amount of the Preferred Securities may direct the Institutional Trustee to give such consent or take such action; and provided further, that where a consent or action under the Indenture is only effective against each holder of Debentures who has consented thereto, such consent or action will only be effective against a Holder of Preferred Securities who directs the Institutional Trustee to give such consent or take such action. The Institutional Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities. If the Institutional Trustee fails to enforce its rights under the Debentures after a holder of record of Preferred Securities has made a written request, such Holder of Preferred Securities may, to the fullest extent permitted by law, institute a legal proceeding directly against the Debenture Issuer to enforce the Institutional Trustee’s rights under the Debentures without first instituting any legal proceeding against the Institutional Trustee or any other Person.

Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest on or principal of the Debentures on the date such interest or principal is otherwise payable (or in the case of redemption, on the redemption date), then a Holder of Preferred Securities may institute a Direct Action for enforcement of payment to such Holder of the principal of or interest on the Debentures having an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities of such Holder on or after the respective due date specified in the Debentures. Notwithstanding any payments made to such Holder of Preferred Securities by the Debenture Issuer in connection with a Direct Action, the Debenture Issuer shall remain obligated to pay the principal of or interest on the Debentures held by the Trust or the Institutional Trustee

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of the Trust, and the Holders of the Common Securities shall be subrogated to the rights of the Holder of such Preferred Securities with respect to payments on the Preferred Securities under the Declaration to the extent of any payments made by the Debenture Issuer to such Holder in any Direct Action provided, however, that the Holder has received full payment in respect of such Preferred Securities. Except as provided in this paragraph and Section 3.8(e) of the Declaration, the Holders of Preferred Securities will not be able to exercise directly any other remedy available to the holders of the Debentures.

Except with respect to directing the time, method and place of conducting a proceeding for a remedy, the Institutional Trustee shall not take any of the actions described in clauses (i) through (iv) above unless the Institutional Trustee has obtained an opinion of a nationally recognized tax counsel experienced in such matters to the effect that, taking such action into account, the Trust will continue to be classified as a grantor trust for United States federal income tax purposes.

Any approval or direction of Holders of Preferred Securities may be given at a separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all of the Holders of Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Preferred Securities are entitled to vote, to be mailed to each Holder of record of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.

No vote or consent of the Holders of the Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities.

Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if they were not outstanding.

6. Voting Rights - Common Securities.

(a) Except as provided under Sections 6(b), (c) and 7 and as otherwise required by law and the Declaration, the Holders of the Common Securities will have no voting rights.

(b) Unless an Event of Default shall have occurred and be continuing, the Holders of the Common Securities are entitled, in accordance with Article V of the Declaration, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees. If an Event of Default has occurred and is continuing, the Institutional Trustee and the Delaware Trustee may be removed at such time only by the Holders of a Majority in Liquidation Amount of the outstanding Preferred Securities. In no event will the Holders of the Preferred Securities have the right to vote to appoint, remove or replace the Regular Trustees, which voting rights are vested exclusively in the Sponsor as the Holder of the Common Securities. No resignation or

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removal of a Trustee and no appointment of a successor trustee shall be effective until the acceptance of appointment of a successor trustee in accordance with the provisions of the Declaration.

During an Event of Default, no vote or consent of the Holders of the Common Securities will be required or obtained by the Regular Trustees with respect to that Event of Default, until that Event of Default has been cured or waived. During that Event of Default, the Institutional Trustee will act on behalf of the Holders of the Preferred Securities without regard to any vote or consent by the Holders of the Common Securities.

(c) Subject to Section 2.6 of the Declaration and only after the Event of Default with respect to the Preferred Securities has been cured, waived, or otherwise eliminated and subject to the requirements of the second to last sentence of this paragraph, the Holders of a Majority in Liquidation Amount of the Common Securities, voting separately as a class, may direct the time, method, and place of conducting any proceeding for any remedy available to the Institutional Trustee, or exercising any trust or power conferred upon the Institutional Trustee under the Declaration, including (i) directing the time, method, place of conducting any proceeding for any remedy available to the Debt Trustee, or exercising any trust or power conferred on the Debt Trustee with respect to the Debentures, (ii) waive any past default and its consequences that is waivable under Section 5.07 of the Indenture or (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable; provided that, where a consent or action under the Indenture would require the consent or act of a Super Majority of Holders of Debentures affected thereby the Institutional Trustee may only give such consent or take such action at the written direction of the Holders of at least the proportion in liquidation amount of the Common Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; and provided further, that where a consent or action under the Indenture would require the consent or action of each holder of Debentures, each Holder of Preferred Securities must direct the Institutional Trustee to give such consent or take such action. Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities. Except with respect to directing the time, method and place of conducting a proceeding for a remedy, the Institutional Trustee shall not take any action in accordance with the directions of the Holders of the Common Securities under this paragraph unless the Institutional Trustee has obtained an opinion of a nationally recognized tax counsel experienced in such matters to the effect that, as a result of such action, the Trust will not fail to be classified as a grantor trust for United States federal income tax purposes. If the Institutional Trustee fails to enforce its rights under the Declaration, any Holder of Common Securities may, to the fullest extent permitted by law, institute a legal proceeding directly against any Person to enforce the Institutional Trustee’s rights under the Declaration, without first instituting a legal proceeding against the Institutional Trustee or any other Person.

Any approval or direction of Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote, to be

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mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.

No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities.

7. Amendments to Declaration and Indenture.

(a) In addition to any requirements under Section 12.1 of the Declaration, if any proposed amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the liquidation, dissolution, winding-up or termination of the Trust, other than as described in Section 8.1 of the Declaration, then the Holders of outstanding Securities voting together as a single class will be entitled to vote on such amendment or proposal (but not on any other amendment or proposal) and such amendment or proposal shall not be effective except with the approval of the Holders of a Majority in Liquidation Amount of the Securities affected thereby, provided that, if any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or only the Common Securities, then only the affected 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 a Majority in Liquidation Amount of such class of Securities.

(b) In the event the consent of the Institutional Trustee, as the holder of the Debentures, is required under the Indenture with respect to any amendment, modification or termination on the Indenture, the Institutional Trustee shall request the written direction of the Holders of the Securities with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification or termination as directed by the Holders of a Majority in Liquidation Amount of the Securities voting together as a single class; provided, however, that where a consent under the Indenture would require the consent of a Super Majority, the Institutional Trustee may only give such consent at the direction of the Holders of at least the proportion in liquidation amount of the Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; and provided, further, that where a consent or action under the Indenture is only effective against each holder of Debentures who has consented thereto, such consent or action will only be effective against a Holder of Preferred Securities who directs the Institutional Trustee to give such consent or take such action; and provided, further, that the Institutional Trustee shall not take any action in accordance with the directions of the Holders of the Securities under this Section 7(b) unless the Institutional Trustee has obtained an opinion of a nationally recognized tax counsel experienced in such matters to the effect that for the purposes of United States federal income tax the Trust will be classified as a grantor trust taking such action into account.

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(c) Notwithstanding the foregoing, no amendment or modification may be made to the Declaration if such amendment or modification would (i) cause the Trust not to be classified for purposes of United States federal income taxation as a grantor trust, (ii) reduce or otherwise adversely affect the powers of the Institutional Trustee or (iii) cause the Trust to be deemed an “investment company” which is required to be registered under the Investment Company Act.

8. Pro Rata.

A reference in these terms of the Securities to any payment, distribution or treatment as being “Pro Rata” shall mean pro rata to each Holder according to the aggregate liquidation amount of the Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of Default has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Preferred Securities pro rata according to the aggregate liquidation amount of Preferred Securities held by the relevant Holder of Preferred Securities relative to the aggregate liquidation amount of all Preferred Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate liquidation amount of Common Securities held by the relevant Holder of Common Securities relative to the aggregate liquidation amount of all Common Securities outstanding.

9. Ranking.

The Preferred Securities rank pari passu, and payment thereon shall be made Pro Rata, with the Common Securities except that, where an Event of Default occurs and is continuing, the rights of Holders of the Common Securities to receive payment of periodic Distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the Holders of the Preferred Securities.

10. Listing.

The Regular Trustees shall use their best efforts to cause the Preferred Securities to be listed for quotation on the NYSE.

11. Acceptance of Securities Guarantee and Indenture.

Each Holder of Preferred Securities and Common Securities, by the acceptance thereof, agrees to the provisions of the Preferred Securities Guarantee and the Common Securities Guarantee, respectively, and to the provisions of the Indenture, including the respective subordination provisions therein.

12. No Preemptive Rights.

The Holders shall have no preemptive or similar rights to subscribe for any additional securities of the Trust or otherwise.

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13. Miscellaneous.

These terms constitute a part of the Declaration.

The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee or the Common Securities Guarantee (as may be appropriate) and the Indenture to a Holder without charge on written request to the Sponsor at its principal place of business.

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EXHIBIT A-1

FORM OF PREFERRED SECURITY CERTIFICATE

IF THE PREFERRED SECURITY IS A GLOBAL CERTIFICATE, INSERT-THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE “DEPOSITORY”) OR A NOMINEE OF THE DEPOSITORY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

UNLESS THE PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

Certificate Number: [    ] Number of Preferred Securities: [    ]

CUSIP No. ·

Certificate Evidencing Preferred Securities

of

COLONIAL CAPITAL TRUST IV

·% Preferred Securities

(liquidation amount $25 per Preferred Security)

COLONIAL CAPITAL TRUST IV, a statutory trust created under the laws of the State of Delaware (the “Trust”), hereby certifies that                      (the “Holder”) is the registered holder of              preferred securities of the Trust representing undivided beneficial interests in the assets of the Trust, designated the ·% Preferred Securities (liquidation amount $25 per Preferred Security) (the “Preferred Securities”). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust, dated as of September ·, 2003, as the same may be amended from

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time to time (the “Declaration of Trust”), including the designation of the terms of the Preferred Securities as set forth in Annex I to the Declaration of Trust. Capitalized terms used herein but not defined shall have the meaning given them in the Declaration of Trust. The Holder is entitled to the benefits of the Preferred Securities Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration of Trust, the Preferred Securities Guarantee and the Indenture to a Holder without charge upon written request to the Trust at its principal place of business.

Upon receipt of this certificate, the Holder is bound by the Declaration of Trust and is entitled to the benefits thereunder.

In addition, the Holder is deemed to have (i) agreed to the terms of the Indenture and the Debentures, including that the Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined in the Indenture) as and to the extent provided in the Indenture and (ii) agreed to the terms of the Preferred Securities Guarantee, including that the Preferred Securities Guarantee is subordinate and junior in right of payment to all other liabilities of the Sponsor, including the Debentures, except those made pari passu or subordinate by their terms, and pari passu with the most senior preferred or preference stock now or hereafter issued by the Sponsor and with any guarantee now or hereafter entered into by the Sponsor in respect of any preferred or preference stock of any Affiliate of the Sponsor. In addition, each Holder hereof by his or her acceptance hereof, hereby agrees to treat the Debentures as indebtedness for all United States federal income tax purposes.

THIS SECURITY IS NOT A SAVINGS OR DEPOSIT ACCOUNT OR OTHER OBLIGATION OF A BANK AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Preferred Securities as evidence of indirect beneficial ownership in the Debentures.

Unless the Institutional Trustee’s Certificate of Authentication hereon has been properly executed, these Preferred Securities shall not be entitled to any benefit under the Declaration or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Trust has executed this certificate this      day of                 .

COLONIAL CAPITAL TRUST IV
By:
Name:
Title:	Regular Trustee
By:
Name:
Title:	Regular Trustee

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Preferred Securities referred to in the within-mentioned Declaration of Trust.

Dated                 ,             

The Bank of New York, as Institutional Trustee
By:
	Authorized Signatory

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[FORM OF REVERSE OF SECURITY]

Distributions payable on each Preferred Security will be fixed at a rate per annum of ·% (the “Coupon Rate”) of the liquidation amount of $25 per Preferred Security, such rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee. Distributions in arrears beyond the applicable Distribution Payment Date (as defined below) will bear interest thereon compounded quarterly at the Coupon Rate (“Compound Interest”) (to the extent permitted by applicable law). The term “Distributions,” as used herein, includes such cash distributions and any such interest (including Additional Interest and Compound Interest) payable unless otherwise stated. A Distribution will be made by the Institutional Trustee only to the extent that payments are made in respect of the Debentures held by the Institutional Trustee and to the extent the Institutional Trustee has funds available in the Institutional Trustee Account. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months and for any period shorter than a full quarterly Distribution period on the basis of the actual number of days elapsed in a calendar month (but not to exceed 30 days in any month).

Except as otherwise described below, Distributions on the Preferred Securities will be cumulative, will accrue from September ·, 2003 and will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on [October] 1, 2003 (each, a “Distribution Payment Date”), to Holders of record on the relevant record dates, which will be, as long as the Preferred Securities remain in book-entry form, the close of business on the Business Day prior to the relevant Distribution Payment Date and, in the event the Preferred Securities are not in book-entry form, the fifteenth calendar day prior to the relevant Distribution Payment Date. Such Distribution Payment Dates shall correspond to the interest payment dates on the Debentures. The Debenture Issuer has the right under the Indenture to defer payments of interest by extending the interest payment period from time to time on the Debentures for a period not exceeding 20 consecutive quarterly periods (each, an “Extension Period”), provided that no Extension Period shall last beyond the maturity or earlier prepayment of the Debentures and, as a consequence of such deferral, quarterly Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarterly periods or extend beyond the maturity or earlier prepayment of the Debentures. Payments of Distributions will be payable to Holders as they appear on the books and records of the Trust on the first record date after the end of the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements.

The Preferred Securities shall be redeemable as provided in the Declaration of Trust.

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ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Preferred Security Certificate)

(Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or participation in STAMP or such other “signature guaranty program” as may be determined by the Trustee in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

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EXHIBIT A-2

FORM OF COMMON SECURITY CERTIFICATE

THIS CERTIFICATE IS NOT TRANSFERABLE, SUBJECT TO THE TERMS OF THE DECLARATION OF TRUST (AS DEFINED HEREIN)

Certificate Number: [    ] Number of Common Securities: [    ]

Certificate Evidencing Common Securities

of

COLONIAL CAPITAL TRUST IV

·% Common Securities

(liquidation amount $25 per Common Security)

COLONIAL CAPITAL TRUST IV, a statutory trust created under the laws of the State of Delaware (the “Trust”), hereby certifies that The Colonial BancGroup, Inc. (the “Holder”) is the registered holder of              common securities of the Trust representing undivided beneficial interests in the assets of the Trust, designated the ·% Common Securities (liquidation amount $25 per Common Security) (the “Common Securities”). The Common Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust, dated as of September ·, 2003, as the same may be amended from time to time (the “Declaration of Trust”), including the designation of the terms of the Common Securities as set forth in Annex I to the Declaration of Trust. Capitalized terms used herein but not defined shall have the meaning given them in the Declaration of Trust. The Holder is entitled to the benefits of the Common Securities Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration, the Common Securities Guarantee and the Indenture to a Holder without charge upon written request to the Sponsor at its principal place of business.

Upon receipt of this certificate, the Sponsor is bound by the Declaration of Trust and is entitled to the benefits thereunder.

In addition, the Holder is deemed to have (i) agreed to the terms of the Indenture and the Debentures, including that the Debentures are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined in the Indenture) as and to the extent provided in the Indenture and (ii) agreed to the terms of the Common Securities Guarantee, including that the Common Securities Guarantee is subordinate and junior in right of payment to all other liabilities of the Sponsor, including the Debentures, except those made pari passu or subordinate by their terms, and pari passu with the most senior preferred or preference stock now or hereafter issued by the Sponsor and with any guarantee now or hereafter entered into by the Sponsor in respect of any preferred or preference stock of any Affiliate of the Sponsor.

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THIS SECURITY IS NOT A SAVINGS OR DEPOSIT ACCOUNT OR OTHER OBLIGATION OF A BANK AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Common Securities as evidence of indirect beneficial ownership in the Debentures.

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IN WITNESS WHEREOF, the Trust has executed this certificate this      day of             .

COLONIAL CAPITAL TRUST IV
By:
Name:
Title:	Regular Trustee
By:
Name:
Title:	Regular Trustee

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[FORM OF REVERSE OF SECURITY]

Distributions payable on each Common Security will be fixed at a rate per annum of ·% (the “Coupon Rate”) of the liquidation amount of $25 per Common Security, such rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee. Distributions in arrears beyond the applicable Distribution Payment Date (as defined below) will bear interest thereon compounded quarterly at the Coupon Rate (“Compound Interest”) (to the extent permitted by applicable law). The term “Distributions,” as used herein, includes such cash distributions and any such interest (including Additional Interest and Compound Interest) payable unless otherwise stated. A Distribution will be made by the Institutional Trustee only to the extent that payments are made in respect of the Debentures held by the Institutional Trustee and to the extent the Institutional Trustee has funds available in the Institutional Trustee Account. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months and for any period shorter than a full quarterly Distribution period on the basis of the actual number of days elapsed in a calendar month (but not to exceed 30 days in any month).

Except as otherwise described below, distributions on the Common Securities will be cumulative, will accrue from September ·, 2003 and will be payable quarterly in arrears, on January 1, April 1, July 1 and October 1 of each year, commencing on [October] 1, 2003 (each a “Distribution Payment Date”), to Holders of record on the relevant record dates, which will be, as long as the Preferred Securities remain in book-entry form, the close of business on the Business Day prior to the relevant Distribution Payment Date and, in the event the Preferred Securities are not in book-entry form, the fifteenth calendar day prior to the relevant Distribution Payment Date. Such Distribution Payment Dates shall correspond to the interest payment dates on the Debentures. The Debenture Issuer has the right under the Indenture to defer payments of interest by extending the interest payment period from time to time on the Debentures for a period not exceeding 20 consecutive quarterly periods (each, an “Extension Period”), provided that no Extension Period shall last beyond the maturity or earlier prepayment of the Debentures and, as a consequence of such deferral, quarterly Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarterly periods or extend beyond the maturity or earlier prepayment of the Debentures. Payments of Distributions will be payable to Holders as they appear on the books and records of the Trust on the first record date after the end of the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements.

The Common Securities shall be redeemable as provided in the Declaration of Trust.

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ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

agent to transfer this Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Common Security Certificate)

(Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or participation in STAMP or such other “signature guaranty program” as may be determined by the Trustee in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

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EXHIBIT B

PURCHASE AGREEMENT

EX-4.9

Exhibit 4.9

PREFERRED SECURITIES GUARANTEE AGREEMENT

Colonial Capital Trust IV

Dated as of September ·, 2003

Table of Contents

		Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1	Definitions and Interpretation	1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1	Trust Indenture Act; Application	4
SECTION 2.2	Lists of Holders of Securities	5
SECTION 2.3	Reports by the Preferred Guarantee Trustee	5
SECTION 2.4	Periodic Reports to Preferred Guarantee Trustee	5
SECTION 2.5	Evidence of Compliance with Conditions Precedent	5
SECTION 2.6	Events of Default; Waiver	6
SECTION 2.7	Event of Default; Notice	6
SECTION 2.8	Conflicting Interests	6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1	Powers and Duties of the Preferred Guarantee Trustee	6
SECTION 3.2	Certain Rights of Preferred Guarantee Trustee	8
SECTION 3.3	Not Responsible for Recitals or Issuance of Preferred Securities Guarantee	10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1	Preferred Guarantee Trustee; Eligibility	10
SECTION 4.2	Appointment, Removal and Resignation of Preferred Guarantee Trustee	11
ARTICLE V
GUARANTEE
SECTION 5.1	Guarantee	12
SECTION 5.2	Waiver of Notice and Demand	12
SECTION 5.3	Obligations Not Affected	12
SECTION 5.4	Enforcement of Guarantee; Rights of Holders	13
SECTION 5.5	Guarantee of Payment	13
SECTION 5.6	Subrogation	13

i

SECTION 5.7	Independent Obligations	14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1	Limitation of Transactions	14
SECTION 6.2	Ranking	15
ARTICLE VII
TERMINATION
SECTION 7.1	Termination	15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1	Exculpation	15
SECTION 8.2	Indemnification	16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1	Successors and Assigns	16
SECTION 9.2	Amendments	16
SECTION 9.3	Notices	16
SECTION 9.4	Benefit	17
SECTION 9.5	Governing Law	17
SECTION 9.6	Genders	17
SECTION 9.7	Counterparts	17

ii

PREFERRED SECURITIES GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the “Preferred Securities Guarantee”), dated as of September · , 2003, is executed and delivered by The Colonial BancGroup, Inc., a Delaware corporation (the “Guarantor”), and The Bank of New York, a New York banking corporation, as trustee (the “Preferred Guarantee Trustee”), for the benefit of the Holders (as defined herein) of Colonial Capital Trust IV, a Delaware statutory trust (the “Issuer”).

WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated as of September · , 2003, among the trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the Closing Date 4,000,000 preferred securities, having an aggregate liquidation amount of $100,000,000 designated as the · % Preferred Securities (the “Preferred Securities”);

WHEREAS, as an incentive for the Holders to purchase the Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Preferred Securities Guarantee, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and

WHEREAS, the Guarantor is also executing and delivering a guarantee agreement (the “Common Securities Guarantee”) in substantially identical terms to this Preferred Securities Guarantee for the benefit of the holders of the Common Securities (as defined herein), except that if an event of default under the Indenture (as defined herein), has occurred and is continuing, the rights of holders of the Common Securities to receive Guarantee Payments under the Common Securities Guarantee are subordinated to the rights of Holders to receive Guarantee Payments under this Preferred Securities Guarantee.

NOW, THEREFORE, in consideration of the purchase by each Holder, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Preferred Securities Guarantee for the benefit of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation

In this Preferred Securities Guarantee, unless the context otherwise requires:

(a) capitalized terms used in this Preferred Securities Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1;

(b) any capitalized term not defined in either the preamble above or this Section 1.1 shall have the respective meaning assigned to it in the Declaration in effect as of the date hereof;

(c) a term defined anywhere in this Preferred Securities Guarantee has the same meaning throughout;

(d) all references to “the Preferred Securities Guarantee” or “this Preferred Securities Guarantee” are to this Preferred Securities Guarantee as modified, supplemented or amended from time to time;

(e) all references in this Preferred Securities Guarantee to Articles and Sections are to Articles and Sections of this Preferred Securities Guarantee, unless otherwise specified;

(f) a term defined in the Trust Indenture Act of 1939, as amended, has the same meaning when used in this Preferred Securities Guarantee, unless otherwise defined in this Preferred Securities Guarantee or unless the context otherwise requires; and

(g) a reference to the singular includes the plural and vice versa.

“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.

“Authorized Officer” of a Person means any executive officer, president, vice-president, assistant vice-president, treasurer, assistant treasurer, secretary, assistant secretary or other officer of such Person generally authorized to bind such Person.

“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banking institutions in The City of New York are permitted or required by any applicable law, regulation or executive order to close.

“Closing Date” means the Closing Time and each Date of Delivery as defined in the Purchase Agreement.

“Common Securities” means the securities representing common undivided beneficial interests in the assets of the Issuer.

“Corporate Trust Office” means the office of the Preferred Guarantee Trustee at which the corporate trust business of the Preferred Guarantee Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Agreement is located at 101 Barclay Street, New York, New York 10286.

“Covered Person” means any Holder or beneficial owner of Preferred Securities.

“Debentures” means the · % Junior Subordinated Debentures due 2033 issued by the Guarantor to the Issuer.

“Event of Default” means a default by the Guarantor on any of its payment or other obligations under this Preferred Securities Guarantee.

“Guarantee Payments” means the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by the Issuer: (i) any accrued unpaid Distributions (as defined in the Declaration) that are required to be paid on such Preferred Securities, to the extent the Issuer shall have funds available therefor, (ii) the redemption price, including all accrued and unpaid Distributions to the date of redemption (the

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“Redemption Price”), to the extent the Issuer has funds available therefor, with respect to any Preferred Securities called for redemption by the Issuer, and (iii) upon dissolution of the Issuer (other than in connection with the distribution of Debentures to the Holders or the redemption of all of the Preferred Securities as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Preferred Securities to the date of payment, to the extent the Issuer shall have funds available therefor, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the “Liquidation Distribution”). If an event of default under the Indenture has occurred and is continuing, the rights of holders of the Common Securities to receive payments under the Common Securities Guarantee Agreement are subordinated to the rights of Holders to receive Guarantee Payments.

“Holder” means any holder, as registered on the books and records of the Issuer, of any Preferred Securities; provided, however, that, in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor, but only to the extent that the Issuer has actual knowledge of such ownership.

“Indemnified Person” means the Preferred Guarantee Trustee, any Affiliate of the Preferred Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Preferred Guarantee Trustee.

“Indenture” means the Indenture dated as of March 21, 2002, as supplemented by the First Supplemental Indenture, dated March 21, 2002, as supplemented by the Second Supplemental Indenture, dated on the Closing Date, each between the Guarantor (the “Debenture Issuer”) and The Bank of New York, as trustee, and any indenture supplemental thereto pursuant to which certain subordinated debt securities of the Debenture Issuer are to be issued to the Institutional Trustee of the Issuer.

“Majority in Liquidation Amount of the Preferred Securities” means, except as provided by the Trust Indenture Act, a vote by Holder(s), voting separately as a class, of more than 50% of the liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Preferred Securities.

“Officers’ Certificate” means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Preferred Securities Guarantee shall include:

(a) a statement that each Authorized Officer signing the Officers’ Certificate has read the covenant or condition and the definition relating thereto;

(b) a brief statement of the nature and scope of the examination or investigation undertaken by each Authorized Officer in rendering the Officers’ Certificate;

(c) a statement that each such Authorized Officer has made such examination or investigation as, in such officer’s opinion, is necessary to enable such Authorized Officer to

3

express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such Authorized 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, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

“Preferred Guarantee Trustee” means The Bank of New York, a New York banking corporation, until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Preferred Securities Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.

“Purchase Agreement” means the Purchase Agreement for the offering and sale of Preferred Securities in the form of Exhibit B to the Declaration.

“Resignation Request” has the meaning set forth in Section 4.2(c).

“Responsible Officer” means, with respect to the Preferred Guarantee Trustee, any officer within the Corporate Trust Office of the Preferred Guarantee Trustee, including any vice president, any assistant vice president, any assistant secretary, any assistant treasurer or other officer or agent of the Corporate Trust Office of the Preferred Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers or agents and also means, with respect to a particular corporate trust matter, any other officer or agent to whom such matter is referred because of that officer’s or agent’s knowledge of and familiarity with the particular subject.

“Successor Preferred Guarantee Trustee” means a successor Preferred Guarantee Trustee possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

ARTICLE II

TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application

(a) This Preferred Securities Guarantee is subject to the provisions of the Trust Indenture Act that are required to be part of this Preferred Securities Guarantee and shall, to the extent applicable, be governed by such provisions.

(b) If and to the extent that any provision of this Preferred Securities 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.

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(c) The application of the Trust Indenture Act to this Preferred Securities Guarantee shall not affect the nature of the Preferred Securities as equity securities representing undivided beneficial interests in the assets of the Issuer.

SECTION 2.2 Lists of Holders of Securities

(a) The Guarantor shall provide the Preferred Guarantee Trustee with a list, in such form as the Preferred Guarantee Trustee may reasonably require, of the names and addresses of the Holders (“List of Holders”) as of such date, (i) within one Business Day after January 1 and June 30 of each year, and (ii) at any other time within 30 days of receipt by the Guarantor of a written request for a List of Holders. Such list shall be as of a date no more than 14 days before such List of Holders is given to the Preferred Guarantee Trustee. The Guarantor shall not be obligated to provide such List of Holders if at any time the List of Holders does not differ from the most recent List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.

(b) The Preferred Guarantee Trustee shall comply with its obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3 Reports by the Preferred Guarantee Trustee

(a) Within 60 days after May 15 of each year, the Preferred 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.

(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Institutional Trustee with each stock exchange, if any, upon which the Securities are listed, with the Commission and with the Trust. The Trust will promptly notify the Institutional Trustee when the Securities are listed on any stock exchange and of any delisting thereof.

SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee

(a) The Guarantor shall provide to the Preferred Guarantee Trustee such documents, reports and information as required by Section 314 (if any) 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.

SECTION 2.5 Evidence of Compliance with Conditions Precedent

The Guarantor shall provide to the Preferred Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Preferred Securities 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.

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SECTION 2.6 Events of Default; Waiver

(a) The Holders of a Majority in Liquidation Amount of Preferred Securities may, by vote, on behalf of all of the Holders waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Preferred Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

(b) Notwithstanding the provisions of subsection (a) of this Section 2.6, the right of any Holder of Preferred Securities to receive payment of the Guarantee Payments in accordance with this Preferred Securities Guarantee, or to institute suit for the enforcement of any such payment, shall not be impaired without the consent of each such Holder.

SECTION 2.7 Event of Default; Notice

(a) The Preferred Guarantee Trustee shall, within 60 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders, notices of all Events of Default actually known to a Responsible Officer of the Preferred Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, that, the Preferred Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer in good faith determines that the withholding of such notice is in the interests of the Holders of the Preferred Securities.

(b) The Preferred Guarantee Trustee shall not be deemed to have actual knowledge of any Event of Default unless the Preferred Guarantee Trustee shall have received written notice, or of which a Responsible Officer charged with the administration of this Preferred Securities Guarantee shall have obtained actual knowledge.

SECTION 2.8 Conflicting Interests

The Declaration shall be deemed to be specifically described in this Preferred Securities Guarantee 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 PREFERRED

GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee

(a) This Preferred Securities Guarantee shall be held by the Preferred Guarantee Trustee in trust for the benefit of the Holders, and the Preferred Guarantee Trustee shall not transfer its right, title and interest in this Preferred Securities Guarantee to any Person except a Holder exercising his or her rights pursuant to Section 5.4(d) or to a Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The right, title and interest of the

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Preferred Guarantee Trustee shall automatically vest in any Successor Preferred Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Preferred Guarantee Trustee.

(b) If an Event of Default actually known to a Responsible Officer has occurred and is continuing, the Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee for the benefit of the Holders.

(c) This Preferred Securities Guarantee and all moneys received by the Preferred Guarantee Trustee hereunder in respect of the Guarantee Payments will not be subject to any right, charge, security interest, lien or claim of any kind in favor of, or for the benefit of, the Preferred Guarantee Trustee or its agents or their creditors.

(d) The Preferred 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 Preferred Securities Guarantee, and no implied covenants shall be read into this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In case an 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 Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such of the rights and powers vested in it by this Preferred Securities 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.

(e) No provision of this Preferred Securities Guarantee shall be construed to relieve the Preferred 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 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 Preferred Guarantee Trustee shall be determined solely by the express provisions of this Preferred Securities Guarantee, and the Preferred Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Preferred Securities Guarantee, and no implied covenants or obligations shall be read into this Preferred Securities Guarantee against the Preferred Guarantee Trustee; and

(B) in the absence of bad faith on the part of the Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and conforming to the requirements of this Preferred Securities Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Preferred Guarantee Trustee, the

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Preferred Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Preferred Securities Guarantee;

(ii) the Preferred Guarantee 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 Preferred Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;

(iii) the Preferred 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 Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this Preferred Securities Guarantee; and

(iv) no provision of this Preferred Securities Guarantee shall require the Preferred 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 Preferred 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 Preferred Securities Guarantee or indemnity, reasonably satisfactory to the Preferred Guarantee Trustee, against such risk or liability is not reasonably assured to it.

SECTION 3.2 Certain Rights of Preferred Guarantee Trustee

(a) Subject to the provisions of Section 3.1:

(i) The Preferred 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 in good faith 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 Preferred Securities Guarantee shall be sufficiently evidenced by an Officers’ Certificate.

(iii) Whenever, in the administration of this Preferred Securities Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Preferred 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 Preferred Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (or any rerecording, refiling or registration thereof).

(v) The Preferred Guarantee Trustee may consult with counsel of its selection, 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 Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Preferred Securities Guarantee from any court of competent jurisdiction.

(vi) The Preferred Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Preferred Securities Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Preferred Guarantee Trustee such security and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee, against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Preferred 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 Preferred Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi) shall relieve the Preferred Guarantee Trustee, upon the occurrence of an Event of Default which has not been cured or waived, of its obligation to exercise the rights and powers vested in it by this Preferred Securities Guarantee and to use the same degree of care and skill in this exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(vii) The Preferred 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 Preferred Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit.

(viii) The Preferred Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, nominees, custodians or attorneys, and the Preferred 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 Preferred Guarantee Trustee or its agents hereunder shall bind the Holders, and the signature of the Preferred 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 Preferred Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Preferred

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Securities Guarantee, both of which shall be conclusively evidenced by the Preferred Guarantee Trustee or its agent taking such action.

(x) Whenever in the administration of this Preferred Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee (i) may request instructions from the Holders of a Majority in Liquidation Amount of the Preferred Securities, (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 conclusively relying on or acting in accordance with such instructions.

(b) No provision of this Preferred Securities Guarantee shall be deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred Guarantee Trustee shall be construed to be a duty.

SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee

The recitals contained in this Preferred Securities Guarantee shall be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee does not assume any responsibility for their correctness. The Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this Preferred Securities Guarantee.

ARTICLE IV

PREFERRED GUARANTEE TRUSTEE

SECTION 4.1 Preferred Guarantee Trustee; Eligibility

(a) There shall at all times be a Preferred 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 Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(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.

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(b) If at any time the Preferred Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c).

(c) If the Preferred Guarantee Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred 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 Preferred Guarantee Trustee

(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor.

(b) The Preferred Guarantee Trustee shall not be removed in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor and to the Preferred Guarantee Trustee being removed.

(c) The Preferred Guarantee Trustee appointed to office shall hold office until a Successor Preferred Guarantee Trustee shall have been appointed or until its removal or resignation. The Preferred Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument (a “Resignation Request”) in writing executed by the Preferred Guarantee Trustee and delivered to the Guarantor which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that no such resignation of the Preferred Guarantee Trustee shall be effective until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.

(d) If no Successor Preferred Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery of a notice of removal or of a Resignation Request, the Preferred Guarantee Trustee resigning or being removed may petition at the expense of the Company any court of competent jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee.

(e) No Preferred Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Preferred Guarantee Trustee.

(f) Upon termination of this Preferred Securities Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to the date of such termination, removal or resignation.

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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 the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim that the Issuer 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 Issuer to pay such amounts to the Holders.

SECTION 5.2 Waiver of Notice and Demand

The Guarantor hereby waives notice of acceptance of this Preferred Securities Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer 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 Preferred Securities Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

(a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer;

(b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures or any extension of the maturity date of the Debentures permitted by the Indenture);

(c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer 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 Issuer or any of the assets of the Issuer;

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(e) any invalidity of, or defect or deficiency in, the Preferred Securities;

(f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or

(g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 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 consent of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 5.4 Enforcement of Guarantee; Rights of Holders

The Guarantor and the Preferred Guarantee Trustee expressly acknowledge that:

(a) this Preferred Securities Guarantee will be deposited with the Preferred Guarantee Trustee to be held for the benefit of the Holders;

(b) the Preferred Guarantee Trustee has the right to enforce this Preferred Securities Guarantee on behalf of the Holders;

(c) the Holders of a Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of this Preferred Securities Guarantee or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this Preferred Securities Guarantee; and

(d) any Holder may institute a legal proceeding directly against the Guarantor to enforce the Preferred Guarantee Trustee’s rights and the obligations of the Guarantor under this Preferred Securities Guarantee, without first instituting a legal proceeding against the Issuer, the Preferred Guarantee Trustee or any other person or entity, and the Guarantor waives any right or remedy to require that any action be brought first against the Issuer or any other person or entity before proceeding directly against the Guarantor.

SECTION 5.5 Guarantee of Payment

This Preferred Securities Guarantee creates a guarantee of payment and not of collection. This Preferred Securities Guarantee will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts therefor paid by the Issuer).

SECTION 5.6 Subrogation

The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Preferred Securities 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

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way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Preferred Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Preferred Securities 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 Holders.

SECTION 5.7 Independent Obligations

The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.

ARTICLE VI

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1 Limitation of Transactions

So long as any Preferred Securities remain outstanding, if (a) there shall have occurred an Event of Default, (b) there shall have occurred an event of default under the Indenture or (c) the Guarantor has exercised its option to defer interest payments on the Debentures by extending the interest payment period as provided in Article IV of the Second Supplemental Indenture to the Indenture, and such period or extension thereof shall be continuing, then (i) the Guarantor shall not declare or pay any dividend on, make any distribution or other payment with respect to, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock (other than (A) repurchases, redemptions or other acquisitions of shares of the Guarantor’s capital stock in connection with the satisfaction by the Guarantor of its obligations under any employee benefit plans, (B) as a result of an exchange or conversion of one class or series of the Guarantor’s capital stock for another class or series of the Guarantor’s capital stock or (C) the purchase of fractional interests in shares of the Guarantor’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged), (ii) the Guarantor shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Guarantor that rank pari passu with or junior to the Debentures and (iii) the Guarantor shall not make any guarantee payments with respect to the foregoing (other than pursuant to this Preferred Securities Guarantee).

In addition, so long as any Preferred Securities remain outstanding, the Guarantor (i) will remain the sole direct or indirect owner of all of the outstanding Common Securities; provided that any permitted successor of the Guarantor under the Indenture may succeed to the Guarantor’s ownership of the Common Securities, (ii) will not take any action which would cause the Issuer to cease to be treated as a grantor trust for United States federal income tax purposes and (iii) will cause the Issuer to remain a statutory trust, except in connection with a distribution of Debentures, the redemption of all of the Trust Securities, or mergers, consolidations or amalgamations, each as provided in the Declaration.

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SECTION 6.2 Ranking

This Preferred Securities Guarantee will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor, except those made pari passu or subordinate by their terms, (ii) pari passu with the most senior preferred or preference stock now or hereafter issued by the Guarantor and with any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any Affiliate of the Guarantor, and (iii) senior to the Guarantor’s Common Stock.

ARTICLE VII

TERMINATION

SECTION 7.1 Termination

This Preferred Securities Guarantee shall terminate and be of no further force and effect upon (i) full payment of the Redemption Price of all Preferred Securities to all of the Holders, (ii) the distribution of the Debentures to all of the Holders or (iii) full payment of the amounts payable in accordance with the Declaration upon dissolution of the Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid under the Preferred Securities or under this Preferred Securities Guarantee.

ARTICLE VIII

INDEMNIFICATION

SECTION 8.1 Exculpation

(a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Preferred Securities Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Preferred Securities Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions.

(b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders might properly be paid.

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SECTION 8.2 Indemnification

To the fullest extent permitted by applicable law, the Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against, any loss, liability, damage, claim or expense incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person 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 costs and expenses (including reasonable legal fees 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 obligation to indemnify as set forth in this Section 8.2 shall survive the resignation or removal of the Preferred Guarantee Trustee and the termination of this Preferred Securities Guarantee.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1 Successors and Assigns

All guarantees and agreements contained in this Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Preferred Securities then outstanding. Except in connection with any merger or consolidation of the Guarantor with or into another entity or any sale, transfer or lease of the Guarantor’s assets to another entity, each as permitted by the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Preferred Securities Guarantee without the prior approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities then outstanding.

SECTION 9.2 Amendments

Except with respect to any changes that do not adversely affect in any material way the rights of Holders (in which case no consent of Holders will be required), this Preferred Securities Guarantee may only be amended with the prior approval of the Holders of a Majority in Liquidation Amount of the Preferred Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of Holders apply to the giving of such approval.

SECTION 9.3 Notices

All notices provided for in this Preferred Securities Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows:

(a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee Trustee’s mailing address set forth below (or such other address as the Preferred Guarantee Trustee may give notice of to the Holders):

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The Bank of New York

c/o The Bank of New York Trust Company of Florida, N.A.

10161 Centurion Parkway

Jacksonville, Florida 32256

Attention: Corporate Trust Administration

(b) If given to the Guarantor, at the Guarantor’s mailing address set forth below (or such other address as the Guarantor may give notice of to the Holders):

The Colonial BancGroup, Inc.

One Commerce Street

P.O. Box 1108

Montgomery, Alabama 36101-1108

Attention: William A. McCrary, General Counsel

(c) If given to any Holder, at the address set forth on the books and records of the Issuer.

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.

SECTION 9.4 Benefit

This Preferred Securities Guarantee is solely for the benefit of the Holders and, subject to Section 3.1(a), is not separately transferable from the Preferred Securities.

SECTION 9.5 Governing Law

This Preferred Securities Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles thereof.

SECTION 9.6 Genders

The masculine, feminine and neuter genders used herein shall include the masculine, feminine and neuter genders.

SECTION 9.7 Counterparts

This Preferred Securities Guarantee may be executed in counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same instrument.

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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year first above written.

THE COLONIAL BANCGROUP, INC.,
as Guarantor
By:
	Name: Sarah H. Moore
	Title: Chief Financial Officer
THE BANK OF NEW YORK,
as Preferred Guarantee Trustee
By:
	Name:
	Title:

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EX-4.10

Exhibit 4.10

COMMON SECURITIES GUARANTEE AGREEMENT

Colonial Capital Trust IV

Dated as of September ·, 2003

Table of Contents

		Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1	Definitions and Interpretation	1
ARTICLE II
GUARANTEE
SECTION 2.1	Guarantee	4
SECTION 2.2	Subordination	4
SECTION 2.3	Waiver of Notice and Demand	4
SECTION 2.4	Obligations Not Affected	4
SECTION 2.5	Rights of Holders	5
SECTION 2.6	Guarantee of Payment	5
SECTION 2.7	Subrogation	5
SECTION 2.8	Independent Obligations	6
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1	Limitation of Transactions	6
SECTION 3.2	Ranking	6
ARTICLE IV
TERMINATION
SECTION 4.1	Termination	7
ARTICLE V
MISCELLANEOUS
SECTION 5.1	Successors and Assigns	7
SECTION 5.2	Amendments	7
SECTION 5.3	Notices	8
SECTION 5.4	Benefit	8
SECTION 5.5	Governing Law	8
SECTION 5.6	Genders	8

i

COMMON SECURITIES GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the “Common Securities Guarantee”), dated as of September ·, 2003, is executed and delivered by The Colonial BancGroup, Inc., a Delaware corporation (the “Guarantor”), for the benefit of the Holders (as defined herein) of Colonial Capital Trust IV, a Delaware statutory trust (the “Issuer”).

WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated as of September ·, 2003, among the trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the Closing Date · common securities, having an aggregate liquidation amount of $· designated as the ·% Common Securities (the “Common Securities”);

WHEREAS, as incentive for the Holders to purchase the Common Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Common Securities Guarantee, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and

WHEREAS, the Guarantor is also executing and delivering a guarantee agreement (the “Preferred Securities Guarantee”) in substantially identical terms to this Common Securities Guarantee for the benefit of the holders of the Preferred Securities, except that if an event of default under the Indenture, has occurred and is continuing, the rights of holders of the Preferred Securities to receive Guarantee Payments under the Preferred Securities Guarantee rank senior and prior in right to the rights of Holders to receive Guarantee Payments under this Common Securities Guarantee.

NOW, THEREFORE, in consideration of the purchase by each Holder, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Common Securities Guarantee for the benefit of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation

In this Common Securities Guarantee, unless the context otherwise requires:

(a) capitalized terms used in this Common Securities Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1;

(b) any capitalized term not defined in either the preamble above or this Section 1.1 shall have the respective meaning assigned to it in the Declaration in effect as of the date hereof;

(c) a term defined anywhere in this Common Securities Guarantee has the same meaning throughout;

(d) all references to “the Common Securities Guarantee” or “this Common Securities Guarantee” are to this Common Securities Guarantee as modified, supplemented or amended from time to time;

(e) all references in this Common Securities Guarantee to Articles and Sections are to Articles and Sections of this Common Securities Guarantee, unless otherwise specified;

(f) a term defined in the Trust Indenture Act of 1939, as amended, has the same meaning when used in this Common Securities Guarantee, unless otherwise defined in this Common Securities Guarantee or unless the context otherwise requires; and

(g) a reference to the singular includes the plural and vice versa.

“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.

“Authorized Officer” of a Person means any executive officer, president, vice-president, assistant vice-president, treasurer, assistant treasurer, secretary, assistant secretary or other officer of such Person generally authorized to bind such Person.

“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banking institutions in The City of New York are permitted or required by applicable law, regulation or executive order to close.

“Closing Date” means the “Closing Time” and each “Date of Delivery” as defined in the Purchase Agreement.

“Covered Person” means any Holder or beneficial owner of Common Securities.

“Debentures” means the ·% Junior Subordinated Debentures due 2033 issued by the Guarantor to the Issuer.

“Event of Default” means a default by the Guarantor on any of its payment or other obligations under this Common Securities Guarantee.

“Guarantee Payments” means the following payments or distributions, without duplication, with respect to the Common Securities, to the extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration) that are required to be paid on such Common Securities, to the extent the Issuer shall have funds available therefor, (ii) the redemption price, including all accrued and unpaid Distributions to the date of redemption (the “Redemption Price”), to the extent the Issuer has funds available therefor, with respect to any Common Securities called for redemption by the Issuer, and (iii) upon dissolution of the Issuer (other than in connection with the distribution of Debentures to the Holders or the redemption of all of the Common Securities as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Common Securities to the date of payment, to the extent the Issuer shall have funds available therefor, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the “Liquidation Distribution”). If an event of default

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under the Indenture has occurred and is continuing, the rights of holders of the Preferred Securities to receive payments under the Preferred Securities Guarantee Agreement rank senior and prior in right to the rights of Holders to receive Guarantee Payments (as defined in the Preferred Securities Guarantee).

“Holder” means any holder, as registered on the books and records of the Issuer, of any Common Securities.

“Indenture” means the Indenture dated as of March 21, 2002, as supplemented by the First Supplemental Indenture, dated March 21, 2002, as supplemented by the Second Supplemental Indenture, dated September ·, 2003 (the “Second Supplemental Indenture”), each between the Guarantor (the “Debenture Issuer”) and The Bank of New York, as trustee, and any indenture supplemental thereto pursuant to which certain subordinated debt securities of the Debenture Issuer are to be issued to the Institutional Trustee of the Issuer.

“Officers’ Certificate” means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. Any Officers’ Certificate delivered with respect to compliance with a condition or covenant provided for in this Common Securities Guarantee shall include:

(a) a statement that each Authorized Officer signing the Officers’ Certificate has read the covenant or condition and the definition relating thereto;

(b) a brief statement of the nature and scope of the examination or investigation undertaken by each Authorized Officer in rendering the Officers’ Certificate;

(c) a statement that each such Authorized Officer has made such examination or investigation as, in such Authorized Officer’s opinion, is necessary to enable such Authorized Officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

“Person” means 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.

“Preferred Securities” means the preferred securities of the Issuer designated as the ·% Preferred Securities.

“Purchase Agreement” means the Purchase Agreement for the offer and sale of Preferred Securities in the form of Exhibit B to the Declaration.

“Trust Securities” means the Common Securities and the Preferred Securities.

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ARTICLE II

GUARANTEE

SECTION 2.1 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 Issuer), as and when due, regardless of any defense, right of set-off or counterclaim that the Issuer 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 Issuer to pay such amounts to the Holders.

SECTION 2.2 Subordination

If (a) an Event of Default or (b) an event of default under the Indenture has occurred and is continuing, the rights of Holders to receive Guarantee Payments under this Common Securities Guarantee are subordinated to the rights of holders of Preferred Securities to receive Guarantee Payments (as defined in the Preferred Securities Guarantee) under the Preferred Securities Guarantee.

SECTION 2.3 Waiver of Notice and Demand

The Guarantor hereby waives notice of acceptance of this Common Securities Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer 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 2.4 Obligations Not Affected

The obligations, covenants, agreements and duties of the Guarantor under this Common Securities Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

(a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Common Securities to be performed or observed by the Issuer;

(b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Common Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Common 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 Debentures or any extension of the maturity date of the Debentures permitted by the Indenture);

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(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 Common Securities, or any action on the part of the Issuer 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 Issuer or any of the assets of the Issuer;

(e) any invalidity of, or defect or deficiency in, the Common 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 2.4 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 2.5 Rights of Holders

The Guarantor expressly acknowledges that any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Common Securities Guarantee without first instituting a legal proceeding against the Issuer or any other Person.

SECTION 2.6 Guarantee of Payment

This Common Securities Guarantee creates a guarantee of payment and not of collection. This Common Securities Guarantee will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts therefor paid by the Issuer).

SECTION 2.7 Subrogation

The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Common Securities 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 Common Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Common Securities 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 Holders.

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SECTION 2.8 Independent Obligations

The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Common Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Common Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 2.4 hereof.

ARTICLE III

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 3.1 Limitation of Transactions

So long as any Common Securities remain outstanding, if (a) there shall have occurred an Event of Default, (b) there shall have occurred an event of default under the Indenture or (c) the Guarantor has exercised its option to defer interest payments on the Debentures by extending the interest payment period as provided in Article IV of the Second Supplemental Indenture and such period or extension thereof shall be continuing, then (i) the Guarantor shall not declare or pay any dividend on, make any distribution or other payment with respect to, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of its capital stock (other than (A) repurchases, redemptions or other acquisitions of shares of the Guarantor’s capital stock in connection with the satisfaction by the Guarantor of its obligations under any employee benefit plans, (B) as a result of an exchange or conversion of one class or series of the Guarantor’s capital stock for another class or series of the Guarantor’s capital stock or (C) the purchase of fractional interests in shares of the Guarantor’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged), (ii) the Guarantor shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Guarantor that rank pari passu with or junior to the Debentures and (iii) the Guarantor shall not make any guarantee payments with respect to the foregoing (other than pursuant to this Common Securities Guarantee).

In addition, so long as any Common Securities remain outstanding, the Guarantor (i) will remain the sole direct or indirect owner of all of the outstanding Common Securities; provided that any permitted successor of the Guarantor under the Indenture may succeed to the Guarantor’s ownership of the Common Securities, (ii) will not take any action which would cause the Issuer to cease to be treated as a grantor trust for United States federal income tax purposes and (iii) will cause the Issuer to remain a statutory trust, except in connection with a distribution of Debentures, the redemption of all of the Trust Securities, or mergers, consolidations or amalgamations, each as provided in the Declaration.

SECTION 3.2 Ranking

This Common Securities Guarantee will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor, except those made pari passu or subordinate by their terms, (ii) pari passu with

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the most senior preferred or preference stock now or hereafter issued by the Guarantor and with any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any Affiliate of the Guarantor, and (iii) senior to the Guarantor’s Common Stock; provided that, in accordance with Section 2.2, this Common Securities Guarantee will rank subordinate and junior in right of payment to the Preferred Securities Guarantee.

ARTICLE IV

TERMINATION

SECTION 4.1 Termination

This Common Securities Guarantee shall terminate and be of no further force and effect upon (i) full payment of the amount payable upon redemption of the Common Securities, (ii) upon the distribution of the Debentures to all of the holders of the Preferred Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon dissolution of the Issuer. Notwithstanding the foregoing, this Common Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid under the Common Securities or under this Common Securities Guarantee.

ARTICLE V

MISCELLANEOUS

SECTION 5.1 Successors and Assigns

All guarantees and agreements contained in this Common Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Common Securities then outstanding. Except in connection with any merger or consolidation of the Guarantor with or into another entity or any sale, transfer or lease of the Guarantor’s assets to another entity, each as permitted by the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Common Securities Guarantee without the prior approval of the Holders of at least a Majority in liquidation amount of the Common Securities then outstanding.

SECTION 5.2 Amendments

Except with respect to any changes that do not adversely affect the rights of Holders (in which case no consent of Holders will be required), this Common Securities Guarantee may only be amended with the prior approval of the Holders of at least a majority in liquidation amount of all the outstanding Common Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of Holders apply to the giving of such approval.

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SECTION 5.3 Notices

All notices provided for in this Common Securities Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail, as follows:

(a) If given to the Guarantor, at the Guarantor’s mailing address set forth below (or such other address as the Guarantor may give notice of to the Holders):

The Colonial BancGroup, Inc.

One Commerce Street

P.O. Box 1108

Montgomery, Alabama 36101-1108

Attention: William A. McCrary, General Counsel

(b) If given to any Holder, at the address set forth on the books and records of the Issuer.

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.

SECTION 5.4 Benefit

This Common Securities Guarantee is solely for the benefit of the Holders and is not separately transferable from the Common Securities.

SECTION 5.5 Governing Law

This Common Securities Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles thereof.

SECTION 5.6 Genders

The masculine, feminine and neuter genders used herein shall include the masculine, feminine and neuter genders.

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THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first above written.

THE COLONIAL BANCGROUP, INC.,
as Guarantor
By:
Name:	Sarah H. Moore
Title:	Chief Financial Officer

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EX-5.1

EXHIBIT 5.1

[LETTERHEAD OF MILLER, HAMILTON, SNIDER & ODOM, L.L.C.]

August 26, 2003

The Colonial BancGroup, Inc.

P. O. Box 1108

Montgomery, AL 36101

Re: Registration Statement on Form S-3

Gentlemen:

We have acted as counsel to The Colonial BancGroup, Inc., a Delaware corporation (“BancGroup”), in connection with the preparation and filing under the Securities Act of 1933, as amended (the “Act”), of a Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “Registration Statement”). The Registration Statement relates to the offer for sale of 4,000,000 shares of Preferred Securities (the “Preferred Securities”) of Colonial Capital Trust IV, a statutory trust formed at the direction of BancGroup under the laws of the State of Delaware (the “Trust”), and the guarantee of BancGroup with respect to the Preferred Securities (the “Guarantee Agreement”) and Junior Subordinated Debentures to be issued by BancGroup to the Trust, and such transactions as are further described in the Registration Statement (the “Offering”). Other capitalized terms used but not defined herein have the meanings ascribed to them in the Registration Statement. As counsel to BancGroup, we have been requested to render this opinion.

For the purpose of rendering the opinions set forth herein, we have been furnished with and have examined the following documents:

1. The Amended and Restated Certificate of Incorporation and Bylaws of BancGroup, each as amended to date;

2. The Registration Statement;

3. The form of Preferred Securities Guarantee Agreement, attached as Exhibit 4.9 to the Registration Statement, and the form of the Common Securities Guarantee Agreement, attached as Exhibit 4.10 to the Registration Statement (collectively, the “Guarantee Agreements”);

4. The form of Junior Subordinated Indenture, incorporated by reference at Exhibit 4.1 to the Registration Statement, and the Second Supplemental Indenture, attached as Exhibit 4.3 to the Registration Statement (collectively, the “Indenture”), and the form of Junior Subordinated Debenture included in the form of Junior Subordinated Indenture;

5. Records of the meetings of the Executive Committee of the Board of Directors and the Board of Directors of BancGroup pertaining to the Offering, including the power of attorney used by the Board of Directors to authorize the filing of the Registration Statement; and

6. Such other documents, including certificates of corporate and public officials, as we have deemed necessary to issue the opinions contained herein.

With respect to all of the foregoing documents, we have assumed, without investigation, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as certified or reproduced copies. We also have obtained from the officers of BancGroup such advice as to such factual matters as we

consider necessary for the purpose of this opinion, and insofar as this opinion is based on such matters of fact, we have relied on such advice.

Based upon the foregoing, we are of the of the opinion that:

1. BancGroup has been duly incorporated and is validly existing as a corporation under the laws of the State of Delaware.

2. The Guarantee Agreements, when executed and delivered as contemplated by the Registration Statement, and the Junior Subordinated Debentures, when issued and paid for as contemplated by the Registration Statement, will be validly issued obligations of BancGroup enforceable in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer laws or similar laws affecting the rights of creditors generally and subject to general principles of equity, including, but not limited to, concepts of materiality, reasonableness, good faith and fair dealing and the unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law. The foregoing opinion is also subject to the following comments and qualifications:

(a) The enforceability of certain provisions of the Indenture and the Guarantee Agreements may be limited by laws rendering unenforceable the release of a party from, or the indemnification of a party against, liability for its own wrongful or negligent acts under certain circumstances, and indemnification contrary to federal or state securities laws and the public policy underlying such laws.

(b) The enforceability of provisions in the Indenture, the Junior Subordinated Debentures and the Guarantee Agreements, to the extent that the terms may not be waived or modified except in writing, may be limited under certain circumstances.

(c) We advise you that, under certain circumstances, a guarantee executed by a corporate shareholder of a corporate borrower may not be enforced as an obligation separate from the obligation guaranteed if it is determined that the borrower is merely an alter ego or nominee of the guarantor and that the “true” borrower is the guarantor. If the guarantor is deemed to be liable as a primary obligor, it is likely that the guarantor will also be entitled to the rights and defenses otherwise available to a primary obligor.

Our opinion expressed herein is limited to those matters expressly set forth herein, and no opinion may be implied or inferred beyond the matters expressly stated herein. We hereby disclaim any obligation to notify any person or entity after the date hereof if any change in fact or law should change our opinion with respect to any matter set forth in this letter.

This opinion is limited to the current federal securities laws, the current laws of the State of Alabama and the current General Business Corporation Law of the State of Delaware, to present judicial interpretations thereof and to facts as they presently exist. In rendering this opinion, we have no obligation to supplement it should such laws be changed by legislative action, judicial decision or otherwise.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. 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,             MILLER, HAMILTON, SNIDER & ODOM, L.L.C.
By:	/s/ Miller, Hamilton, Snider & Odom, L.L.C.

EX-5.2

Exhibit 5.2

[LETTERHEAD OF RICHARDS, LAYTON & FINGER P.A.]

August 26, 2003

Colonial Capital Trust IV

c/o Colonial BancGroup, Inc.

One Commerce Street, Suite 800

Montgomery, Alabama 36104

Re:        Colonial Capital Trust IV

Ladies and Gentlemen:

We have acted as special Delaware counsel for Colonial BancGroup, Inc, a Delaware corporation (the “Company”), and Colonial Capital Trust IV, a Delaware statutory 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 August 22, 2003 (the “Certificate”), as filed in the office of the Secretary of State of the State of Delaware (the “Secretary of State”) on August 22, 2003;

(b) The Declaration of Trust of the Trust, dated as of August 22, 2003, among the Company, as Sponsor, and the trustees of the Trust named therein;

(c) The Registration Statement on Form S-3, including a prospectus (the “Prospectus”), relating to the preferred securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust (each, a “Preferred Security” and collectively, the “Preferred Securities”), as proposed to be filed by the Company and the Trust with the Securities and Exchange Commission on or about August 26, 2003 (the “Registration Statement”);

(d) A form of Amended and Restated Declaration of Trust of the Trust, to be entered into among the Company, as Sponsor, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust (including Annex I and Exhibits A-1 and A-2 thereto) (the “Declaration”), attached as an exhibit to the Registration Statement; and

Colonial Capital Trust IV

August 26, 2003

Page 2

(e) A Certificate of Good Standing for the Trust, dated August 22, 2003, obtained from the Secretary of State.

Capitalized terms used herein and not otherwise defined are used as defined in the Declaration.

For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects.

With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures.

For purposes of this opinion, we have assumed (i) that the Declaration and the Certificate are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due creation or due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trust (collectively, the “Preferred Security Holders”) of a Preferred Security Certificate for such Preferred Security and the payment for the Preferred Security acquired by it, in accordance with the Declaration and the Registration Statement, and (vii) that the Preferred Securities are issued and sold in accordance with the Declaration 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 and blue sky 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 that are currently in effect.

Colonial Capital Trust IV

August 26, 2003

Page 3

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 statutory trust under the Delaware Statutory Trust Act (12 Del. C. § 3801, et seq.).

2. The Preferred 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 Preferred Security Holders, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Declaration.

We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading “Legal Matters” in the Prospectus. In giving the foregoing consents, we do not thereby admit that we come within the category of Persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other Person for any purpose.

Very truly yours,

/s/ Richards, Layton & Finger, P.A.

BJK/RSM

EX-8

EXHIBIT 8

[Letterhead of Miller, Hamilton, Snider & Odom]

August 26, 2003

The Colonial BancGroup, Inc.

Post Office Box 1108

Montgomery, AL 36101

Colonial Capital Trust IV

Post Office Box 1108

Montgomery, AL 36101

Re: Material Federal Income Tax Consequences of the Purchase and Ownership of Preferred Securities Issued by Colonial Capital Trust IV.

Gentlemen:

We have acted as counsel to The Colonial BancGroup, Inc., a Delaware corporation (“BancGroup”), in connection with the preparation and filing under the Securities Act of 1933, as amended (the “Act”), of a Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “Registration Statement”). The Registration Statement relates to the offer for sale of 4,000,000 shares of Preferred Securities (the “Preferred Securities”) of Colonial Capital Trust IV, a statutory trust formed at the direction of BancGroup under the laws of the State of Delaware (the “Trust”), and the guarantee of BancGroup with respect to the Preferred Securities (the “Guarantee Agreement”) and Junior Subordinated Debentures to be issued by BancGroup to the Trust, and such transactions as are further described in the Registration Statement (the “Offering”). Other capitalized terms used but not defined herein have the meanings ascribed to them in the Registration Statement. As counsel to BancGroup, we have been requested to render this opinion.

For the purpose of rendering the opinions set forth herein, we have been furnished with and have examined the following documents:

1. The Registration Statement;

2. The form of Preferred Securities Guarantee Agreement, attached as Exhibit 4.9 to the Registration Statement, and the form of the Common Securities Guarantee Agreement, attached as Exhibit 4.10 to the Registration Statement (collectively, the “Guarantee Agreements”);

3. The form of Junior Subordinated Indenture, incorporated by reference at Exhibit 4.1 to the Registration Statement, and the Second Supplemental Indenture, attached as Exhibit 4.3 to the Registration Statement (collectively, the “Indenture”), and the form of Junior Subordinated Debenture included in the form of Junior Subordinated Indenture;

The Colonial BancGroup, Inc.

Colonial Capital Trust IV

August 26, 2003

Page 2

4. Records of the meetings of the Executive Committee of the Board of Directors and the Board of Directors of BancGroup pertaining to the Offering, including the power of attorney used by the Board of Directors to authorize the filing of the Registration Statement; and

5. Such other documents, including certificates of corporate and public officials, as we have deemed necessary to issue the opinions contained herein.

With respect to all of the foregoing documents, we have assumed, without investigation, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as certified or reproduced copies. We also have obtained from the officers of BancGroup such advice as to such factual matters as we consider necessary for the purpose of this opinion, and insofar as this opinion is based on such matters of fact, we have relied on such advice.

Based on the foregoing, it is our opinion that the following conclusions would be sustained by a court with jurisdiction in a properly presented case (with all appeals exhausted):

1. The Trust will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation, and, as a result, each beneficial owner of Preferred Securities will be treated as owning an undivided beneficial interest in the Junior Subordinated Debentures held by the Trust.

2. The Junior Subordinated Debentures will be classified for United States federal income tax purposes as indebtedness of BancGroup.

3. Subject to the terms and conditions set forth in the Indenture and the Junior Subordinated Debentures, BancGroup will have the option to elect to defer interest payments by extending the interest payment period for a period not exceeding twenty (20) consecutive quarterly periods (the “Extension Period”). Except in the case of the occurrence of an Extension Period, stated interest on the Junior Subordinated Debentures will be included in income of a holder of Preferred Securities at the time such interest income is paid or accrued in accordance with the holder’s regular method of tax accounting. If BancGroup exercises its right to defer payments of interest on the Junior Subordinated Debentures during an Extension Period, beneficial owners of Preferred Securities will commence reporting interest income with respect to the Junior Subordinated Debentures under the original issue discount rules of the Internal Revenue Code of 1986, as amended (the “Code”).

4. Gain or loss will be recognized by a holder of Preferred Securities on a sale of Preferred Securities (including a redemption for cash) in an amount equal to the difference between the amount realized (which for this purpose will exclude amounts attributable to accrued interest or original issue discount not previously included in income) and the holder’s adjusted tax basis in the Preferred Securities sold or so redeemed. Gain or loss recognized by the holder on a sale of Preferred Securities held for more than one year will generally be taxable as long-term capital gain or loss.

5. A distribution by the Trust of the Junior Subordinated Debentures, as described in the Registration Statement (and subject to the limits discussed therein), will be non-taxable and will result in the distributee receiving directly its pro rata share of the Junior Subordinated Debentures previously held indirectly through the Trust, with a holding period and aggregate tax basis equal to the holding period and aggregate tax basis such distributee had in its Preferred Securities before such distribution.

6. The discussion of “United States Federal Income Taxation” in the Registration Statement accurately describes the material United States federal income tax consequences concerning the Preferred Securities. Although this discussion does not purport to discuss all possible United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities, such discussion constitutes in all material respects a fair and accurate summary of the United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities under current law.

The Colonial BancGroup, Inc.

Colonial Capital Trust IV

August 26, 2003

Page 3

These opinions are based upon the Code, the Treasury Regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Future changes in the law or interpretations of the law may cause the tax effects of the transactions referred to herein to be materially different from those described above. We have undertaken no obligation to update this opinion in such event.

Other than the specific tax opinions set forth in this letter, no other opinion has been requested of us or rendered by us with respect to the tax treatment of the Junior Subordinated Debentures, the Preferred Securities, or the Guarantee Agreement, including, but not limited to, the tax treatment of the proposed transactions under other provisions of the Code and the Treasury Regulations or the tax treatment of the proposed transactions under state, local, foreign or any other tax laws.

We hereby consent to the filing of this letter as an exhibit to the Registration Statement and the use of our name in the Registration Statement under the caption “United States Federal Income Taxation.” In giving such consent, we do not concede that this consent is required under Section 7 of the Securities Act of 1933. Any other use or distribution of, or reliance on, this letter without our prior written consent is prohibited.

Sincerely,

MILLER, HAMILTON, SNIDER & ODOM, L.L.C.

/s/ Miller, Hamilton, Snider & Odom, L.L.C.:

WF/avs

EX-12

Exhibit 12

Computation of Ratios of Earnings to Fixed Charges

	Six Months Ended June 30, 2003			Year Ended December 31,
				2002			2001			2000			1999			1998
Income before Income Taxes	$	111,178		$	214,743		$	191,897		$	189,741		$	187,396		$	105,366
Fixed Charges:
Interest Expense		144,400			322,261			480,240			517,754			384,891			339,765
1/3 Rent Expense		4,263			7,511			6,222			5,661			4,943			5,479
Total Fixed Charges		148,663			329,772			486,462			523,415			389,834			345,244
Total	$	259,841		$	544,515		$	678,359		$	713,156		$	577,230		$	450,610
Ratio of Earnings to Fixed Charges		1.75	%		1.65	%		1.39	%		1.36	%		1.48	%		1.31	%
Interest on Deposits	$	75,361		$	185,520		$	323,499		$	359,460		$	279,166		$	261,266
Ratio of Earnings to Fixed Charges excluding interest on deposits		2.51	%		2.49	%		2.18	%		2.16	%		2.69	%		2.25	%

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 28, 2003 relating to the consolidated financial statements, which appears in The Colonial BancGroup, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/    PRICEWATERHOUSECOOPERS LLP

Montgomery, Alabama

September 25, 2003

EX-23.2

EXHIBIT 23.2

CONSENT OF COUNSEL

The Colonial BancGroup, Inc.

We hereby consent to the use in this Registration Statement on Form S-3 of The Colonial BancGroup, Inc., of our name in the Prospectus, which forms a part of such Registration Statement, under the heading “LEGAL MATTERS,” to the summarization of our opinions referenced therein, and to the inclusion of our opinions at Exhibit 5.1 and Exhibit 8 of the Registration Statement.

/s/ MILLER, HAMILTON, SNIDER & ODOM, L.L.C.

August 26, 2003

EX-24

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert E. Lowder, W. Flake Oakley and Sarah H. Moore and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution, for him or her and in his or her name, place and stead, to sign any reports or other filings which may be required to be filed with the Securities and Exchange Commission on behalf of The Colonial BancGroup, Inc. (the “Registrant”), for the purpose of registering under the Securities Act of 1933, as amended, shares, debentures, trust preferred interests, including, without limitation, the offering of preferred securities of Colonial Capital Trust IV, or other debt offerings to be offered and sold by the Registrant or a subsidiary of the Registrant on Form S-3 or other appropriate form and any amendments thereto (whether pre-effective or post-effective); to file such other reports or other filings, such registration statements and amendments thereto, with all exhibits thereto, and any documents in connection therewith with the Securities and Exchange Commission; and to file such notices, reports or registration statements (and amendments thereto) with any such securities authority of any state which may be necessary to register or qualify for an exemption from registration any such securities offered or sold by BancGroup or a subsidiary in such states in relation to the offering, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite to be done in connection with the offering as fully and to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Power of Attorney has been signed by the following persons in the capacities indicated and done this 16th day of July, 2003, in Montgomery, Alabama.

[The rest of this page intentionally left blank]

/s/  Robert E. Lowder   Robert E. Lowder	Chairman of the Board, Chief Executive Officer and President
/s/  Lewis E. Beville   Lewis E. Beville	Director
/s/  William Britton   William Britton	Director
/s/  Jerry J. Chesser     Jerry J. Chesser	Director
/s/  Augustus K. Clements, III   Augustus K. Clements, III	Director
/s/  Robert S. Craft     Robert S. Craft	Director
/s/  Patrick F. Dye     Patrick F. Dye	Director
/s/  Clinton O. Holdbrooks     Clinton O. Holdbrooks	Director
/s/  Harold D. King     Harold D. King	Director
/s/  John Ed Mathison     John Ed Mathison	Director

/s/  Milton E. McGregor     Milton E. McGregor	Director
/s/  John C. H. Miller, Jr.     John C. H. Miller, Jr.	Director
/s/  Joe D. Mussafer     Joe D. Mussafer	Director
/s/  William E. Powell, III     William E. Powell, III	Director
/s/  James W. Rane     James W. Rane	Director
Frances E. Roper	Director
/s/  Simuel Sippial     Simuel Sippial	Director
/s/  Edward V. Welch     Edward V. Welch	Director

EX-25.1

EXHIBIT 25.1

FORM T-1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE

ELIGIBILITY OF A TRUSTEE PURSUANT TO

SECTION 305(b)(2)     ¨

THE BANK OF NEW YORK

(Exact name of trustee as specified in its charter)

New York (State of incorporation if not a U.S. national bank)	13-5160382 (I.R.S. employer identification no.)
One Wall Street, New York, N.Y. (Address of principal executive offices)	10286 (Zip code)

COLONIAL CAPITAL TRUST IV

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	applied for (I.R.S. employer identification no.)
One Commerce Street, Suite 800 Montgomery, Alabama (Address of principal executive offices)	36104 (Zip code)

Preferred Securities

(Title of the indenture securities)

1.    General information. Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name	Address
Superintendent of Banks of the State of New York	2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York	33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation	Washington, D.C. 20429
New York Clearing House Association	New York, New York 10005

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

2.    Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16.  List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)

4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.)

6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)

7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

-2-

SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 26th day of August, 2003.

THE BANK OF NEW YORK
By:	/s/    ROBERT A. MASSIMILLO
	Name:    ROBERT A. MASSIMILLO Title:      VICE PRESIDENT

-3-

EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK

of One Wall Street, New York, N.Y. 10286

And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business June 30, 2003, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

	Dollar Amounts In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin	$	4,257,371
Interest-bearing balances		6,048,782
Securities:
Held-to-maturity securities		373,479
Available-for-sale securities		18,918,169
Federal funds sold in domestic offices		6,689,000
Securities purchased under agreements to resell		5,293,789
Loans and lease financing receivables:
Loans and leases held for sale		616,186
Loans and leases, net of unearned income		38,342,282
LESS: Allowance for loan and lease losses		819,982
Loans and leases, net of unearned income and allowance		37,522,300
Trading Assets		5,741,193
Premises and fixed assets (including capitalized leases)		958,273
Other real estate owned		441
Investments in unconsolidated subsidiaries and associated companies		257,626
Customers’ liability to this bank on acceptances outstanding		159,995
Intangible assets
Goodwill		2,554,921
Other intangible assets		805,938
Other assets		6,285,971
Total assets	$	96,483,434

LIABILITIES
Deposits:
In domestic offices	$	37,264,787
Noninterest-bearing		15,357,289
Interest-bearing		21,907,498
In foreign offices, Edge and Agreement subsidiaries, and IBFs		28,018,241
Noninterest-bearing		1,026,601
Interest-bearing		26,991,640
Federal funds purchased in domestic offices		739,736
Securities sold under agreements to repurchase		465,594
Trading liabilities		2,456,565
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)		8,994,708
Bank’s liability on acceptances executed and outstanding		163,277
Subordinated notes and debentures		2,400,000
Other liabilities		7,446,726
Total liabilities	$	87,949,634
Minority interest in consolidated subsidiaries		519,472
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,135,284
Surplus		2,056,273
Retained earnings		4,694,161
Accumulated other comprehensive income		128,610
Other equity capital components		0
Total equity capital		8,014,328
Total liabilities minority interest and equity capital	$	96,483,434

I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Thomas J. Mastro,

Senior Vice President and Comptroller

We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas A. Renyi Gerald L. Hassell Alan R. Griffith ] Directors

EX-25.2

EXHIBIT 25.2

FORM T-1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE

ELIGIBILITY OF A TRUSTEE PURSUANT TO

SECTION 305(b)(2)   ¨

THE BANK OF NEW YORK

(Exact name of trustee as specified in its charter)

New York (State of incorporation if not a U.S. national bank)	13-5160382 (I.R.S. employer identification no.)
One Wall Street, New York, N.Y. (Address of principal executive offices)	10286 (Zip code)

THE COLONIAL BANCGROUP, INC.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	63-0661573 (I.R.S. employer identification no.)
One Commerce Street, Suite 800 Montgomery, Alabama (Address of principal executive offices)	36104 (Zip code)

2003 Junior Subordinated Debentures

(Title of the indenture securities)

1. General information. Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name	Address
Superintendent of Banks of the State of New York	2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York	33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation	Washington, D.C. 20429
New York Clearing House Association	New York, New York 10005

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)

4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.)

6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)

7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

-2-

SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 26th day of August, 2003.

THE BANK OF NEW YORK
By:	/s/    ROBERT A. MASSIMILLO
	Name:    ROBERT A. MASSIMILLO Title:      VICE PRESIDENT

-3-

EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK

of One Wall Street, New York, N.Y. 10286

And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business June 30, 2003, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

	Dollar Amounts In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin	$	4,257,371
Interest-bearing balances		6,048,782
Securities:
Held-to-maturity securities		373,479
Available-for-sale securities		18,918,169
Federal funds sold in domestic offices		6,689,000
Securities purchased under agreements to resell		5,293,789
Loans and lease financing receivables:
Loans and leases held for sale		616,186
Loans and leases, net of unearned income		38,342,282
LESS: Allowance for loan and lease losses		819,982
Loans and leases, net of unearned income and allowance		37,522,300
Trading Assets		5,741,193
Premises and fixed assets (including capitalized leases)		958,273
Other real estate owned		441
Investments in unconsolidated subsidiaries and associated companies		257,626
Customers’ liability to this bank on acceptances outstanding		159,995
Intangible assets
Goodwill		2,554,921
Other intangible assets		805,938
Other assets		6,285,971
Total assets	$	96,483,434

LIABILITIES
Deposits:
In domestic offices	$	37,264,787
Noninterest-bearing		15,357,289
Interest-bearing		21,907,498
In foreign offices, Edge and Agreement subsidiaries, and IBFs		28,018,241
Noninterest-bearing		1,026,601
Interest-bearing		26,991,640
Federal funds purchased in domestic offices		739,736
Securities sold under agreements to repurchase		465,594
Trading liabilities		2,456,565
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)		8,994,708
Bank’s liability on acceptances executed and outstanding		163,277
Subordinated notes and debentures		2,400,000
Other liabilities		7,446,726
Total liabilities	$	87,949,634
Minority interest in consolidated subsidiaries		519,472
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,135,284
Surplus		2,056,273
Retained earnings		4,694,161
Accumulated other comprehensive income		128,610
Other equity capital components		0
Total equity capital		8,014,328
Total liabilities minority interest and equity capital	$	96,483,434

I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Thomas J. Mastro,

Senior Vice President and Comptroller

We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas A. Renyi Gerald L. Hassell Alan R. Griffith ] Directors

EX-25.3

EXHIBIT 25.3

FORM T-1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE

ELIGIBILITY OF A TRUSTEE PURSUANT TO

SECTION 305(b)(2)            ¨

THE BANK OF NEW YORK

(Exact name of trustee as specified in its charter)

New York (State of incorporation if not a U.S. national bank)	13-5160382 (I.R.S. employer identification no.)
One Wall Street, New York, N.Y. (Address of principal executive offices)	10286 (Zip code)

THE COLONIAL BANCGROUP, INC.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	63-0661573 (I.R.S. employer identification no.)
One Commerce Street, Suite 800 Montgomery, Alabama (Address of principal executive offices)	36104 (Zip code)

Guarantee of Preferred Securities of Colonial Capital Trust IV

(Title of the indenture securities)

1.    General information. Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name	Address
Superintendent of Banks of the State of New York	2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York	33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation	Washington, D.C. 20429
New York Clearing House Association	New York, New York 10005

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)

4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.)

6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)

7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

-2-

SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 26th day of August, 2003.

THE BANK OF NEW YORK
By:	/s/    ROBERT A. MASSIMILLO
	Name:    ROBERT A. MASSIMILLO Title:      VICE PRESIDENT

-3-

EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK

of One Wall Street, New York, N.Y. 10286

And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business June 30, 2003, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

	Dollar Amounts In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin	$	4,257,371
Interest-bearing balances		6,048,782
Securities:
Held-to-maturity securities		373,479
Available-for-sale securities		18,918,169
Federal funds sold in domestic offices		6,689,000
Securities purchased under agreements to resell		5,293,789
Loans and lease financing receivables:
Loans and leases held for sale		616,186
Loans and leases, net of unearned income		38,342,282
LESS: Allowance for loan and lease losses		819,982
Loans and leases, net of unearned income and allowance		37,522,300
Trading Assets		5,741,193
Premises and fixed assets (including capitalized leases)		958,273
Other real estate owned		441
Investments in unconsolidated subsidiaries and associated companies		257,626
Customers’ liability to this bank on acceptances outstanding		159,995
Intangible assets
Goodwill		2,554,921
Other intangible assets		805,938
Other assets		6,285,971
Total assets	$	96,483,434

LIABILITIES
Deposits:
In domestic offices	$	37,264,787
Noninterest-bearing		15,357,289
Interest-bearing		21,907,498
In foreign offices, Edge and Agreement subsidiaries, and IBFs		28,018,241
Noninterest-bearing		1,026,601
Interest-bearing		26,991,640
Federal funds purchased in domestic offices		739,736
Securities sold under agreements to repurchase		465,594
Trading liabilities		2,456,565
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)		8,994,708
Bank’s liability on acceptances executed and outstanding		163,277
Subordinated notes and debentures		2,400,000
Other liabilities		7,446,726
Total liabilities	$	87,949,634
Minority interest in consolidated subsidiaries		519,472
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,135,284
Surplus		2,056,273
Retained earnings		4,694,161
Accumulated other comprehensive income		128,610
Other equity capital components		0
Total equity capital		8,014,328
Total liabilities minority interest and equity capital	$	96,483,434

I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Thomas J. Mastro,

Senior Vice President and Comptroller

We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas A. Renyi Gerald L. Hassell Alan R. Griffith ] Directors