<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 1996
REGISTRATION NO. 333-15375
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<S> <C>
NATIONSBANK CORPORATION NB CAPITAL TRUST I
(Exact name of registrant as specified in charter) (Exact name of registrant as specified in charter)
NORTH CAROLINA DELAWARE
(State or other jurisdiction or organization) (State or other jurisdiction or organization)
56-0906609 56-6490299
(I.R.S. employer identification number) (I.R.S. employer identification number)
NB CAPITAL TRUST II NB CAPITAL TRUST III
(Exact name of registrant as specified in charter) (Exact name of registrant as specified in charter)
DELAWARE DELAWARE
(State or other jurisdiction or organization) (State or other jurisdiction or organization)
56-6490301 56-6490302
(I.R.S. employer identification number) (I.R.S. employer identification number)
</TABLE>
NATIONSBANK CORPORATION, NATIONSBANK CORPORATE CENTER, CHARLOTTE, NORTH CAROLINA
28255 (704) 386-5000
(address, including zip code, and telephone number, including area code of
registrant's principal executive offices)
PAUL J. POLKING
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(704) 386-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
BOYD C. CAMPBELL, JR. JAMES R. TANENBAUM
SMITH HELMS MULLISS & MOORE, L.L.P. STROOCK & STROOCK & LAVAN
214 NORTH CHURCH STREET SEVEN HANOVER SQUARE
CHARLOTTE, NORTH CAROLINA 28202 NEW YORK, NEW YORK 10004
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
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, please check the following box:
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering.
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
[CAPTION]
<TABLE>
<S> <C> <C> <C>
TITLE OF EACH PROPOSED MAXIMUM PROPOSED MAXIMUM
CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE
TO BE REGISTERED REGISTERED (1) PER UNIT (1)(2)(3) OFFERING PRICE (2)(3)
<S> <C> <C> <C>
Junior Subordinated Notes of
NationsBank Corporation (4) $1,000,000,000
Preferred Securities of NB Capital
Trust I, II and III $1,000,000,000
Guarantees of Preferred Securities
of NB Capital Trust I, NB Capital
Trust II and NB Capital Trust III
and certain
back-up undertakings (5) NA NA NA
Total $1,000,000,000 100% $1,000,000,000
<CAPTION>
TITLE OF EACH
CLASS OF SECURITIES AMOUNT OF
TO BE REGISTERED REGISTRATION FEE
<S> <C>
Junior Subordinated Notes of
NationsBank Corporation (4) $303,030 (6)
Preferred Securities of NB Capital
Trust I, II and III NA
Guarantees of Preferred Securities
of NB Capital Trust I, NB Capital
Trust II and NB Capital Trust III
and certain
back-up undertakings (5) NA
Total $303,030 (6)
</TABLE>
(1) Such indeterminate number of Preferred Securities of NB Capital Trust I, NB
Capital Trust II and NB Capital Trust III and such indeterminate principal
amount of Junior Subordinated Notes of NationsBank Corporation as may from
time to time be issued at indeterminate prices.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the Preferred
Securities of NB Capital Trust I, NB Capital Trust II and NB Capital Trust
III and the Junior Subordinated Notes of NationsBank Corporation registered
hereby will not exceed $1,000,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) The Junior Subordinated Notes of NationsBank Corporation will be purchased
by NB Capital Trust I, NB Capital Trust II and NB Capital Trust III with the
proceeds of the sale of the Preferred Securities.
(5) No separate consideration will be received for any Guarantees. The
Guarantees include the rights of holders of the Preferred Securities under
the Guarantees and certain back-up undertakings, comprised of obligations of
NationsBank Corporation under the Indenture and any supplemental indenture
thereto and pursuant to Declarations of Trust to provide certain indemnities
in respect of, and be responsible for certain costs, expenses, debts and
liabilities of each of NB Capital Trust I, NB Capital Trust II and NB
Capital Trust III, each as described in the Registration Statement. All
obligations under the Declarations of Trust, including the indemnity
obligations, are included in the back-up undertakings.
(6) NationsBank Corporation paid $303 of the registration fee with the initial
filing of this Registration Statement leaving a balance of $302,727 to be
paid with the filing of this Amendment No. 1.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED NOVEMBER , 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1996)
PREFERRED SECURITIES
NB CAPITAL TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES(SM)("TOPRS(SM)")
(LIQUIDATION AMOUNT $ PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
NATIONSBANK(Register mark)
The % Trust Originated Preferred Securities (the "Preferred Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of NB Capital Trust I, a statutory business trust formed under the laws of the
State of Delaware ("NB Capital Trust" or the "Trust"). NationsBank Corporation,
a North Carolina corporation ("NationsBank" or the "Corporation"), will own all
the common securities
(CONTINUED ON NEXT PAGE)
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 OF THIS PROSPECTUS SUPPLEMENT FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF
DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
Application has been made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"). If so approved, trading of
the Preferred Securities on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Preferred Securities.
See "Underwriting."
THE OFFERED SECURITIES ARE NOT SAVINGS ACCOUNTS OR BANK DEPOSITS, ARE NOT
OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF
NATIONSBANK (EXCEPT TO THE EXTENT THAT THE PREFERRED SECURITIES ARE
GUARANTEED BY NATIONSBANK AS DESCRIBED HEREIN), ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY
AND INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA (THE "COMMISSIONER") OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION, THE COMMISSIONER OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
[CAPTION]
<TABLE>
<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) TRUST (3)(4)
<S> <C> <C> <C>
Per Preferred Security.............................. $ (3) $
Total (5)........................................... $ (3) $
</TABLE>
(1) Plus accrued distributions, if any, from , 1996.
(2) NB Capital Trust and NationsBank have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Junior Subordinated Notes, NationsBank
has agreed to pay to the Underwriters as compensation (the "Underwriters'
Compensation") for their arranging the investment therein of such proceeds
$ per Preferred Security (or $ in the aggregate); provided, that
such compensation for sales of 10,000 or more Preferred Securities to a
single purchaser will be $ per Preferred Security. Therefore, to the
extent of such sales, the actual amount of Underwriters' Compensation will
be less than the aggregate amount specified in the preceding sentence. See
"Underwriting."
(4) Expenses of the offering which are payable by NationsBank estimated to be
$ .
(5) NB Capital Trust has granted the several Underwriters an option to purchase,
exercisable within 30 days from the date of this Prospectus Supplement, up
to an additional Preferred Securities solely to cover
over-allotments, if any. If all such Preferred Securities are purchased the
total Price to Public and Proceeds to the Trust will be $ and the
aggregate Underwriters' Compensation will be $ . See "Underwriting."
The Preferred Securities are offered by the several Underwriters subject to
prior sale, when, as and if issued to and acceptance by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Corporation, on or about
, 1996.
MERRILL LYNCH & CO.
The date of this Prospectus Supplement is , 1996.
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
(the "Common Securities" and, together with the Preferred Securities, the "Trust
Securities") representing undivided beneficial interests in the assets of NB
Capital Trust. NB Capital Trust exists for the sole purpose of issuing the Trust
Securities and investing the proceeds thereof in an equivalent amount of %
Junior Subordinated Deferrable Interest Notes, due 2026 (the "Junior
Subordinated Notes") of NationsBank. The Junior Subordinated Notes and the
Preferred Securities in respect of which this Prospectus Supplement is being
delivered shall be referred to herein as the "Offered Securities." The Junior
Subordinated Notes will mature on , 2026 (the "Stated
Maturity"). The Junior Subordinated Notes when issued will be unsecured
obligations of NationsBank and will be subordinate and junior in right of
payment to other indebtedness of the Corporation, as described herein. Upon an
Event of Default under the Declaration (as defined herein), the holders of
Preferred Securities will have a preference over the holders of the Common
Securities with respect to payments in respect of distributions and payments
upon redemption, liquidation and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of percent of the liquidation amount of $
per Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing ("distributions"). The payment of distributions out
of moneys held by NB Capital Trust and payments on liquidation of NB Capital
Trust or the redemption of Preferred Securities, as set forth below, are
guaranteed on a subordinated basis by NationsBank (the "Preferred Securities
Guarantee") to the extent described herein and under "Description of Preferred
Securities Guarantees" in the accompanying Prospectus. The Preferred Securities
Guarantee covers payments of distributions and other payments on the Preferred
Securities only if and to the extent that NB Capital Trust has funds available
therefor which will only occur if NationsBank has made a payment of interest or
principal or other payments on the Junior Subordinated Notes held by NB Capital
Trust as its sole asset. The Preferred Securities Guarantee, when taken together
with the Corporation's obligations under the Junior Subordinated Notes and the
Indenture (as defined herein) and its obligations under the Declaration,
including its liabilities to pay costs, expenses, debts and obligations of NB
Capital Trust (other than with respect to the Trust Securities), provide a full
and unconditional guarantee on a subordinated basis of amounts due on the
Preferred Securities. See "Risk Factors -- Rights Under the Preferred Securities
Guarantee" herein. The obligations of NationsBank under the Preferred Securities
Guarantee rank (i) subordinate and junior in right of payment to all other
liabilities, including contingent liabilities, of NationsBank (ii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Corporation and with any guarantee now or hereafter entered into by
NationsBank in respect of any preferred or preference stock of any affiliate of
the Corporation, and (iii) senior to the Corporation's common stock. The
obligations of NationsBank under the Junior Subordinated Notes are subordinate
and junior in right of payment to all present and future Senior Obligations (as
defined herein) of NationsBank, which were approximately $ billion at
September 30, 1996. The Junior Subordinated Notes purchased by the Trust may be
subsequently distributed pro rata to holders of the Trust Securities in
connection with the dissolution of the Trust.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Junior Subordinated Notes,
which will be the sole assets of the Trust. As a result, if NationsBank does not
make principal or interest payments on the Junior Subordinated Notes, the Trust
will not have sufficient funds to make distributions on the Preferred
Securities; in which event, the Preferred Securities Guarantee will not apply to
such distributions until the Trust has sufficient funds available therefor.
So long as NationsBank is not in default in the payment of interest on the
Junior Subordinated Notes, it has the right to defer payments of interest on the
Junior Subordinated Notes by extending the interest payment period on the Junior
Subordinated Notes for up to 20 consecutive quarters (each, an "Extension
Period"), provided that no Extension Period may extend beyond the Stated
Maturity of the Junior Subordinated Notes. If interest payments are so deferred,
distributions on the Preferred Securities will also be deferred. During such
Extension Period, distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at an annual rate of percent per
annum compounded quarterly, and during any Extension Period, holders of
Preferred Securities will be required to include deferred interest income in
their gross income for United States federal income tax purposes in advance of
receipt of the cash distributions with respect to such deferred interest
payments. There could be multiple Extension Periods of varying lengths
S-2
<PAGE>
<PAGE>
throughout the term of the Junior Subordinated Notes. See "Description of the
Junior Subordinated Notes -- Option to Extend Interest Payment Period"; "Risk
Factors -- Option to Extend Interest Payment Period" and "United States Federal
Income Taxation -- Interest Income and Original Issue Discount."
The Junior Subordinated Notes are redeemable by NationsBank, in whole or in
part, from time to time, on or after , 200 , or, in whole but
not in part, prior to , 200 , upon the occurrence of a Tax Event
(as defined herein), which redemption, in either case, may be subject to the
prior approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"). If NationsBank redeems the Junior Subordinated Notes,
the Trust must redeem Trust Securities on a pro rata basis having an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Notes so redeemed at $ per Preferred Security plus accrued and
unpaid distributions thereon (the "Redemption Price") to the date fixed for
redemption. See "Description of the Preferred Securities -- Mandatory
Redemption." The Preferred Securities will be redeemed upon maturity of the
Junior Subordinated Notes.
NationsBank will have the right at any time to liquidate the Trust and
cause the Junior Subordinated Notes to be distributed to the holders of the
Trust Securities, provided that NationsBank has received prior approval from the
Federal Reserve Board, if required. If the Junior Subordinated Notes are
distributed to the holders of the Preferred Securities, NationsBank will use its
best efforts to have the Junior Subordinated Notes listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities are then listed.
See "Description of the Preferred Securities -- Tax Event Redemption" and
"Description of the Junior Subordinated Notes."
In the event of the involuntary or voluntary dissolution, winding up or
termination of the Trust, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $ plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Notes are distributed to the holders of the Preferred Securities.
See "Description of the Preferred Securities -- Liquidation Distribution Upon
Dissolution." Any such distribution of the Junior Subordinated Notes may be
subject to the prior approval of the Federal Reserve Board.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
<PAGE>
NATIONSBANK CORPORATION
NationsBank is a multi-bank holding company established as a North Carolina
corporation in 1968 and is registered under the Bank Holding Company Act of
1956, as amended (the "BHCA"), with its principal assets being the stock of its
subsidiaries. Through its banking subsidiaries (the "Banks") and its various
non-banking subsidiaries, NationsBank provides banking and banking-related
services, primarily throughout the Southeast and Mid-Atlantic states and Texas.
The principal executive offices of NationsBank are located at NationsBank
Corporate Center in Charlotte, North Carolina 28255. Its telephone number is
(704) 386-5000.
NB CAPITAL TRUST
NB Capital Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of October 29, 1996, executed
by NationsBank, as sponsor (the "Sponsor"), and the trustees of NB Capital Trust
(the "NB Trustees") and (ii) a certificate of trust filed with the Secretary of
State of the State of Delaware on November 1, 1996. The initial 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 of which this Prospectus Supplement and the accompanying Prospectus
form a part. The Declaration will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of
the Preferred Securities, the purchasers thereof will own all of the Preferred
Securities. See "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company." NationsBank will directly or
indirectly acquire all the Common Securities which will represent an aggregate
liquidation amount equal to at least 3 percent of the total capital of NB
Capital Trust. NB Capital Trust exists for the exclusive purposes of (i) issuing
the Trust Securities representing undivided beneficial interests in the assets
of the Trust, (ii) investing the gross proceeds of the Trust Securities in the
Junior Subordinated Notes and (iii) engaging in only those other activities
necessary or incidental thereto.
Pursuant to the Declaration, the number of NB Trustees will initially be
five. Three of the NB Trustees (the "Regular Trustees") will be persons who are
employees or officers of, or who are affiliated with, NationsBank. The fourth
trustee will be a financial institution that is unaffiliated with NationsBank,
which trustee will serve as institutional trustee under the Declaration and as
indenture trustee for the purposes of compliance with the provisions of the
Trust Indenture Act (the "Property Trustee"). The Bank of New York, a New York
banking corporation, will be the Property 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
(the "Preferred Guarantee Trustee") under the Preferred Securities Guarantee and
as Debt Trustee (as defined herein) under the Indenture. The fifth trustee will
be an entity that maintains its principal place of business in the State of
Delaware (the "Delaware Trustee"). Initially, The Bank of New York (Delaware),
an affiliate of the Property Trustee, will act as Delaware Trustee. See
"Description of the Preferred Securities Guarantees" in the accompanying
Prospectus and "Description of the Preferred Securities -- Voting Rights"
herein.
The Property Trustee will hold title to the Junior Subordinated Notes for
the benefit of the holders of the Trust Securities and in such capacity will
have the power to exercise all rights, powers and privileges under the
Indenture. In addition, the Property Trustee will maintain exclusive control of
a segregated non-interest-bearing bank account (the "Property Account") to hold
all payments made in respect of the Junior Subordinated Notes for the benefit of
the holders of the Trust Securities. The Property Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the
benefit of the holders of the Preferred Securities. NationsBank, as the direct
or indirect holder of all the Common Securities, will have the right to appoint,
remove or replace any NB Trustee and to increase or decrease the number of NB
Trustees. NationsBank will pay all fees and expenses related to NB Capital Trust
and the offering of the Trust Securities. See "Description of the Junior
Subordinated Notes -- Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
S-4
<PAGE>
<PAGE>
NATIONSBANK CORPORATION
SELECTED FINANCIAL DATA
The following selected financial data for the five years ended December 31,
1995 are derived from financial statements of the Corporation audited by Price
Waterhouse LLP, independent accountants. The financial data for the nine months
ended September 30, 1996 and 1995 are derived from unaudited financial
statements. The unaudited financial statements include all adjustments,
consisting only of normal recurring accruals, that the Corporation considers
necessary for a fair presentation of its financial position and the results of
its operations as of such dates and for such periods. Results for the nine
months ended September 30, 1996 are not necessarily indicative of the results
that might be expected for any other interim period or for the year as a whole.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED
DECEMBER 31,
1996 1995 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
(AMOUNTS IN MILLIONS EXCEPT PER SHARE INFORMATION AND RATIOS)
Income statement:
Income from earning assets................................. $ 10,438 $ 9,859 $ 13,220 $ 10,529 $ 8,327 $ 7,780
Interest expense........................................... 5,699 5,825 7,773 5,318 3,690 3,682
Net interest income........................................ 4,739 4,034 5,447 5,211 4,637 4,098
Provision for credit losses................................ 455 240 382 310 430 715
Gains (losses) on sales of securities...................... 34 8 29 (13) 84 249
Noninterest income......................................... 2,688 2,232 3,078 2,597 2,101 1,913
Merger-related charge...................................... 118 -- -- -- 30 --
Other noninterest expense (including OREO expense)......... 4,212 3,831 5,181 4,930 4,371 4,149
Income before income taxes and effect of change in method
of accounting for income taxes........................... 2,676 2,203 2,991 2,555 1,991 1,396
Income tax expense (benefit)............................... 933 763 1,041 865 690 251
Income before effect of change in method of accounting for
income taxes............................................. 1,743 1,440 1,950 1,690 1,301 1,145
Effect of change in method of accounting for income
taxes.................................................... -- -- -- -- 200 --
Net income................................................. 1,743 1,440 1,950 1,690 1,501 1,145
Net income applicable to common shareholders............... 1,732 1,434 1,942 1,680 1,491 1,121
Per common share:
Earnings before effect of change in method of accounting
for income taxes......................................... $ 5.82 $ 5.26 $ 7.13 $ 6.12 $ 5.00 $ 4.60
Earnings................................................... 5.82 5.26 7.13 6.12 5.78 4.60
Cash dividends paid........................................ 1.74 1.50 2.08 1.88 1.64 1.51
Shareholders' equity (period-end).......................... 45.77 44.00 46.52 39.70 36.39 30.80
Balance sheet (period-end):
Total assets............................................... $187,671 $182,138 $187,298 $169,604 $157,686 $118,059
Total loans, leases and factored accounts receivable, net
of unearned income....................................... 122,078 114,601 117,033 103,371 92,007 72,714
Total deposits............................................. 108,132 97,870 100,691 100,470 91,113 82,727
Long-term debt............................................. 22,034 15,741 17,775 8,488 8,352 3,066
Common shareholders' equity................................ 13,186 11,904 12,759 10,976 9,859 7,793
Total shareholders' equity................................. 13,304 11,941 12,801 11,011 9,979 7,814
Average common shares issued (in thousands).................. 297,772 272,790 272,480 274,656 257,969 243,748
Performance ratios:
Return on average assets (1)............................... 1.15% 1.03% 1.03% 1.02% .97% 1.00%
Return on average common shareholders' equity (1)(2)....... 17.58 17.02 17.01 16.10 15.00 15.83
Risk-based capital ratios:
Tier 1..................................................... 7.05 7.16 7.24 7.43 7.41 7.54
Total...................................................... 12.05 11.23 11.58 11.47 11.73 11.52
Leverage capital ratio....................................... 6.30 5.96 6.27 6.18 6.00 6.16
Total equity to total assets................................. 7.09 6.56 6.83 6.49 6.33 6.62
Asset quality ratios:
Allowance for credit losses as a percentage of loans,
leases and factored accounts receivable, net of unearned
income (period-end)...................................... 1.90 1.89 1.85 2.11 2.36 2.00
Allowance for credit losses as a percentage of
nonperforming loans (period-end)......................... 235.64 255.57 306.49 273.07 193.38 103.11
Net charge-offs as a percentage of average loans, leases
and factored accounts receivable, net of unearned
income................................................... .48 .33 .38 .33 .51 1.25
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and other real estate owned
(period-end)............................................. .93 .90 .73 1.10 1.92 2.72
<CAPTION>
1991
<S> <<C>
Income statement:
Income from earning assets................................. $ 9,398
Interest expense........................................... 5,599
Net interest income........................................ 3,799
Provision for credit losses................................ 1,582
Gains (losses) on sales of securities...................... 454
Noninterest income......................................... 1,742
Merger-related charge...................................... 330
Other noninterest expense (including OREO expense)......... 3,974
Income before income taxes and effect of change in method
of accounting for income taxes........................... 109
Income tax expense (benefit)............................... (93)
Income before effect of change in method of accounting for
income taxes............................................. 202
Effect of change in method of accounting for income
taxes.................................................... --
Net income................................................. 202
Net income applicable to common shareholders............... 171
Per common share:
Earnings before effect of change in method of accounting
for income taxes......................................... $ .76
Earnings................................................... .76
Cash dividends paid........................................ 1.48
Shareholders' equity (period-end).......................... 27.03
Balance sheet (period-end):
Total assets............................................... $110,319
Total loans, leases and factored accounts receivable, net
of unearned income....................................... 69,108
Total deposits............................................. 88,075
Long-term debt............................................. 2,876
Common shareholders' equity................................ 6,252
Total shareholders' equity................................. 6,518
Average common shares issued (in thousands).................. 226,305
Performance ratios:
Return on average assets (1)............................... .17%
Return on average common shareholders' equity (1)(2)....... 2.70
Risk-based capital ratios:
Tier 1..................................................... 6.38
Total...................................................... 10.30
Leverage capital ratio....................................... 5.07
Total equity to total assets................................. 5.91
Asset quality ratios:
Allowance for credit losses as a percentage of loans,
leases and factored accounts receivable, net of unearned
income (period-end)...................................... 2.32
Allowance for credit losses as a percentage of
nonperforming loans (period-end)......................... 81.82
Net charge-offs as a percentage of average loans, leases
and factored accounts receivable, net of unearned
income................................................... 1.86
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and other real estate owned
(period-end)............................................. 4.01
</TABLE>
(1) In 1993, return on average assets and return on average common shareholders'
equity after the tax benefit from the impact of adopting SFAS 109
(Accounting for Income Taxes) were 1.12% and 17.33%, respectively.
(2) Average common shareholders' equity does not include the effect of market
value adjustments to securities available for sale and marketable equity
securities.
S-5
<PAGE>
<PAGE>
RECENT DEVELOPMENTS
PENDING MERGER WITH BOATMEN'S BANCSHARES, INC.
On August 29, 1996, the Corporation and Boatmen's Bancshares, Inc. a
corporation organized and existing under the laws of the State of Missouri
("Boatmen's"), and registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended, entered into an Agreement and Plan of Merger
(the "Merger Agreement"), pursuant to which Boatmen's will be merged with a
wholly-owned subsidiary of the Corporation (the "Merger"). The Board of
Directors of both the Corporation and Boatmen's approved the Merger Agreement
and the transactions contemplated thereby at their meetings held on August 29,
1996.
Boatmen's is headquartered in St. Louis, Missouri, with its principal
assets being the stock of its subsidiaries. At September 30, 1996, Boatmen's had
total assets of $41 billion and had over 600 banking offices in Missouri,
Kansas, Arkansas, Oklahoma, New Mexico, Texas, Iowa, Illinois and Tennessee.
The Merger is intended to constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and to be accounted for as a
purchase.
Consummation of the Merger is subject to various conditions, including: (i)
receipt of approval by the shareholders of each of NationsBank and Boatmen's of
appropriate matters relating to the Merger Agreement and the Merger, as required
to be approved under applicable law; (ii) receipt of requisite regulatory
approvals from the Federal Reserve Board and other federal and state regulatory
authorities; (iii) receipt of an opinion of counsel as to the tax treatment of
certain aspects of the Merger; (iv) listing, subject of notice of issuance, of
the NationsBank stock to be issued in the Merger; and (v) satisfaction of
certain other conditions. The Merger is expected to be completed in January
1997. For additional information regarding this pending acquisition, see the
Corporation's Current Report on Form 8-K filed September 6, 1996, as amended by
Form 8-K/A-1 filed September 11, 1996 and Form 8-K/A-2 filed November 13, 1996,
incorporated herein by reference.
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
ABSENCE OF PRIOR PUBLIC MARKET
Prior to this offering, there has been no public market for the Preferred
Securities. Although application has been made to list the Preferred Securities
on the New York Stock Exchange, there can be no assurance that an active public
market will develop for the Preferred Securities or that, if such market
develops, the market price will equal or exceed the public offering price set
forth on the cover page of this Prospectus Supplement. The public offering price
for the Preferred Securities has been determined through negotiations between
the Corporation and the Underwriters. Prices for the Preferred Securities will
be determined in the marketplace and may be influenced by many factors,
including the liquidity of the market for the Preferred Securities, investor
perceptions of the Corporation and general industry and economic conditions.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE PREFERRED SECURITIES GUARANTEE AND
JUNIOR SUBORDINATED NOTES
The Corporation's obligations under the Preferred Securities Guarantee rank
(i) subordinate and junior in right of payment to all liabilities, including
contingent liabilities, of NationsBank (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Corporation and
with any guarantee now or hereafter entered into by NationsBank in respect of
any preferred or preference stock of any affiliate of the Corporation, and (iii)
senior to the Corporation's common stock. The obligations of NationsBank under
the Junior Subordinated Notes are subordinate and junior in right of payment to
all present and future Senior Obligations of NationsBank and rank pari passu
with obligations to or rights of the Corporation's other general unsecured
creditors. No payment of principal (including redemption payments, if any),
premium, if any, or interest on the Junior Subordinated Notes may be made if (i)
any Senior Obligations of NationsBank are not paid when due and any applicable
grace period with respect to such default has ended with such default not
S-6
<PAGE>
<PAGE>
having been cured or waived or ceasing to exist, or (ii) the maturity of any
Senior Obligations has been accelerated because of a default. As of September
30, 1996, Senior Obligations of NationsBank aggregated approximately $17.6
billion. In addition, because NationsBank is a holding company, the Junior
Subordinated Notes are effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, including obligations to
depositors. There are no terms in the Preferred Securities, the Junior
Subordinated Notes or the Preferred Securities Guarantee that limit the
Corporation's ability to incur additional indebtedness, including indebtedness
that ranks senior to the Junior Subordinated Notes and the Preferred Securities
Guarantee. See "Description of the Preferred Securities Guarantees -- Status of
the Preferred Securities Guarantees" and "Description of the Junior Subordinated
Notes" in the accompanying Prospectus, and "Description of the Junior
Subordinated Notes -- Subordination" herein.
RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will be qualified as an indenture under
the Trust Indenture Act. The Bank of New York will act as indenture trustee
under the Preferred Securities Guarantee for purposes of compliance with the
provisions of the Trust Indenture Act (the "Preferred Guarantee Trustee"). The
Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the
benefit of the holders of the Preferred Securities.
The Preferred Securities Guarantee guarantees to the holders of the
Preferred Securities the payment of (i) any accrued and unpaid distributions
that are required to be paid on the Preferred Securities, to the extent the
Trust has funds available therefor, (ii) the Redemption Price, with respect to
Preferred Securities called for redemption by the Trust, to the extent the Trust
has funds available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Junior Subordinated Notes to the holders of Preferred
Securities or a redemption of all the Preferred Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid distributions
on the Preferred Securities to the date of the payment to the extent the Trust
has funds available therefor or (b) the amount of assets of the Trust remaining
available for distribution to holders of the Preferred Securities in liquidation
of the Trust. 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 or to
direct the exercise of any trust or power conferred upon the Preferred Guarantee
Trustee under the Preferred Securities Guarantee. Notwithstanding the foregoing,
any holder of Preferred Securities may institute a legal proceeding directly
against NationsBank to enforce the Property Trustee's rights under the Preferred
Securities Guarantee without first instituting a legal proceeding against the
Trust, the Preferred Guarantee Trustee or any other person or entity. If
NationsBank were to default on its obligation to pay amounts payable on the
Junior Subordinated Notes or otherwise, the Trust would lack funds for the
payment of distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and, in such event, holders of the Preferred Securities
would not be able to rely upon the Preferred Securities Guarantee for payment of
such amounts. Instead, holders of the Preferred Securities would rely on the
enforcement (1) by the Property Trustee of its rights as registered holder of
the Junior Subordinated Notes against NationsBank pursuant to the terms of the
Junior Subordinated Notes or (2) by such holder of the Property Trustee's rights
against NationsBank to enforce payments on the Junior Subordinated Notes. See
"Description of the Preferred Securities Guarantees" and "Description of the
Junior Subordinated Notes" in the accompanying Prospectus. The Declaration
provides that each holder of Preferred Securities, by acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions thereof, and the Indenture (as defined in "Description
of the Junior Subordinated Notes" herein).
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of Preferred Securities would rely on the
enforcement by the Property Trustee of its rights as a holder of the Junior
Subordinated Notes against NationsBank. In addition, the holders of a majority
in liquidation amount of the Preferred Securities will have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Junior Subordinated Notes. If the Property Trustee fails to
enforce its
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<PAGE>
rights under the Junior Subordinated Notes, a holder of Preferred Securities may
institute a legal proceeding directly against NationsBank to enforce the
Property Trustee's rights under the Junior Subordinated Notes without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Notes. See "Description of the Preferred Securities -- Declaration
Events of Default."
LIMITED RIGHTS OF ACCELERATION
The Property Trustee, as holder of the Junior Subordinated Notes, may
accelerate payment of the principal and accrued and unpaid interest on the
Junior Subordinated Notes only upon the occurrence and continuation of a
"Declaration Event of Default" which, generally is limited to certain events of
bankruptcy, insolvency and reorganization of the Corporation and certain events
of dissolution, winding-up or termination of the Trust. See "Description of
Junior Subordinated Notes -- Events of Default, Waiver and Notice" in the
accompanying Prospectus for a description of the Events of Default. Accordingly,
there is no right to acceleration upon default by the Corporation of its payment
obligations under the Junior Subordinated Notes or defaults of the Corporation
under the Preferred Securities Guarantee.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
NationsBank has the right under the Indenture to defer payments of interest
on the Junior Subordinated Notes by extending the interest payment period at any
time, and from time to time, on the Junior Subordinated Notes. As a consequence
of such an extension, quarterly distributions on the Preferred Securities would
be deferred (but would continue to accrue, despite such deferral, with interest
thereon compounded quarterly) by the Trust during any such Extension Period.
Such right to extend the interest payment period for the Junior Subordinated
Notes is limited to a period not exceeding 20 consecutive quarters, but no such
Extension Period may extend beyond the Stated Maturity of the Junior
Subordinated Notes. During any such Extension Period (a) NationsBank shall not
declare or pay dividends on, or make a distribution with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of shares of NationsBank
Common Stock in connection with the satisfaction by NationsBank of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of NationsBank capital stock or the exchange or conversion of
one class or series of the Corporation's capital stock for another class or
series of NationsBank capital stock or (iii) the purchase of fractional
interests in shares of the Corporation's capital stock pursuant to an
acquisition or the conversion or exchange provisions of such NationsBank capital
stock or the security being converted or exchanged), (b) NationsBank shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by NationsBank that rank pari
passu with or junior to the Junior Subordinated Notes and (c) NationsBank shall
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee). Prior to the termination of any
such Extension Period, NationsBank may further extend the interest payment
period; provided, that such Extension Period, together with all such previous
and further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Junior Subordinated Notes. Upon the
termination of any Extension Period and the payment of all amounts then due,
NationsBank may commence a new Extension Period, subject to the above
requirements. See "Description of the Preferred Securities -- Distributions" and
"Description of the Junior Subordinated Notes -- Option to Extend Interest
Payment Period."
Should NationsBank exercise its right to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
be required to accrue income (as original issue discount ("OID")) in respect of
the deferred stated interest allocable to its Preferred Securities for United
States federal income tax purposes, which will be allocated but not distributed,
to holders of record of Preferred Securities. As a result, each such holder of
Preferred Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash from NB
Capital Trust related to such income if such holder disposes of its Preferred
Securities prior to the record date for the date on which distributions of such
amounts are made. NationsBank has no current intention of exercising its right
to defer payments of interest by extending the interest payment period on the
Junior Subordinated Notes. However, should NationsBank determine to exercise
such right in the future, the market price of the Preferred Securities is likely
to be affected. A holder that disposes of its Preferred Securities during an
Extension Period, therefore,
S-8
<PAGE>
<PAGE>
might not receive the same return on its investment as a holder that continues
to hold its Preferred Securities. In addition, as a result of the existence of
the Corporation's right to defer interest payments, the market price of the
Preferred Securities (which represent an undivided beneficial interest in the
Junior Subordinated Notes) may be more volatile than other securities on which
OID accrues that do not have such rights.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "Proposed Legislation") if such debt obligations have a maximum term
in excess of 20 years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued a joint statement (the "Joint Statement") indicating
their intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the views expressed in
the Joint Statement (the "Democrat Letters"). Based upon the Joint Statement and
the Democrat Letters, it is expected that if the Proposed Legislation were to be
enacted, such legislation would not apply to the Junior Subordinated Notes.
There can be no assurances, however, that the effective date guidance contained
in the Joint Statement and the Democrat Letters will be incorporated into the
Proposed Legislation, if enacted, or that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of the Corporation
to deduct the interest payable on the Junior Subordinated Notes. Accordingly,
there can be no assurance that a Tax Event will not occur. See "Description of
the Preferred Securities -- Tax Event Redemption."
REDEMPTION OR DISTRIBUTION OF THE JUNIOR SUBORDINATED NOTES
NationsBank will have the right at any time to dissolve the Trust and,
after the satisfaction of creditors as required by law, to cause the Junior
Subordinated Notes to be distributed to the holders of the Trust Securities in
connection with the liquidation of the Trust. In certain circumstances,
NationsBank shall have the right to redeem the Junior Subordinated Notes, in
whole or in part, in lieu of a distribution of the Junior Subordinated Notes by
the Trust; in which event the Trust will redeem the Trust Securities on a pro
rata basis to the same extent as the Junior Subordinated Notes are redeemed by
NationsBank. Any such distribution or redemption prior to the Stated Maturity
may require prior approval of the Federal Reserve Board. See "Description of the
Preferred Securities -- Tax Event Redemption."
Under current United States federal income tax law, a distribution of
Junior Subordinated Notes upon the dissolution of NB Capital Trust would not be
a taxable event to holders of the Preferred Securities. If, however, the Trust
is characterized as an association taxable as a corporation at the time of the
dissolution of the Trust, the distribution of the Junior Subordinated Notes may
constitute a taxable event to holders of Preferred Securities. Moreover, upon
occurrence of a Tax Event, a dissolution of NB Capital Trust in which holders of
the Preferred Securities receive cash may be a taxable event to such holders.
See "United States Federal Income Taxation -- Receipt of Junior Subordinated
Notes or Cash Upon Liquidation of NB Capital Trust."
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Notes that may be distributed in exchange
for Preferred Securities upon a dissolution or liquidation of the Trust.
Accordingly, the Preferred Securities or the Junior Subordinated Notes, may
trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby.
Because holders of Preferred Securities may receive Junior Subordinated
Notes, prospective purchasers of Preferred Securities are also making an
investment decision with regard to the Junior Subordinated Notes and should
carefully review all the information regarding the Junior Subordinated Notes
contained herein and in the accompanying Prospectus. See "Description of the
Preferred Securities -- Distribution of the Junior Subordinated Notes" and
" -- Liquidation Distribution Upon Dissolution" and "Description of the Junior
Subordinated Notes -- General."
S-9
<PAGE>
<PAGE>
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, NB Trustees, which voting rights are vested exclusively
in the holder of the Common Securities. See "Description of Preferred
Securities -- Voting Rights."
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Notes. A holder who uses the accrual method of accounting for tax
purposes (and a cash method holder, if the Junior Subordinated Notes are deemed
to be issued with OID) and who disposes of his Preferred Securities between
record dates for payments of distributions thereon will be required to include
accrued but unpaid interest on the Junior Subordinated Notes through the date of
disposition in income as ordinary income (i.e., interest or, possibly, OID), and
to add such amount to his adjusted tax basis in his pro rata share of the
underlying Junior Subordinated Notes 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. See
"United States Federal Income Taxation -- Interest Income and Original Issue
Discount" and " -- Sales of Preferred Securities."
S-10
<PAGE>
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of the Corporation
and its subsidiaries as of September 30, 1996 and as adjusted to give effect to
(i) the issuance of the Preferred Securities offered hereby; (ii) the issuance
and the maturity of certain of the Corporation's and its subsidiaries' notes
during the period beginning October 1, 1996 through the date of this Prospectus
Supplement; and (iii) the issuance and the maturity of certain of the
Corporation's medium-term notes during the period beginning October 1, 1996
through the date of this Prospectus Supplement. This table does not reflect the
proposed issuance by NationsBank of its common stock and preferred stock in
connection with the Merger nor does it reflect the pro forma capitalization of
NationsBank assuming consummation of the Merger. For a discussion of the Merger
see "RECENT DEVELOPMENTS".
<TABLE>
<CAPTION>
NATIONSBANK AS
ACTUAL ADJUSTED
<S> <C> <C>
(AMOUNTS IN MILLIONS)
<CAPTION>
<S> <C> <C>
LONG-TERM DEBT
SENIOR DEBT:
NationsBank Corporation (parent):
Floating rate medium-term notes, due 1996-2004.................................................. $ 3,896 4,078
4.55 to 8.20% medium-term notes, due 1996-2006.................................................. 1,078 1,078
8 1/2% notes, due 1996.......................................................................... 150 150
5.51% ESOP secured notes, due 1996-1999......................................................... 56 56
7 1/2% notes, due 1997.......................................................................... 250 250
5 1/8% notes, due 1998.......................................................................... 300 300
6 5/8% notes, due 1998.......................................................................... 400 400
Floating rate notes, due 1998................................................................... 300 300
5 3/8% notes, due 2000.......................................................................... 398 398
Floating rate notes, due 2000................................................................... 500 500
7% notes, due 2001.............................................................................. 499 499
Floating rate notes, due 2001................................................................... 200 200
Floating rate notes, due 2002................................................................... 499 499
7% notes, due 2003.............................................................................. 498 498
9 1/4% unsecured notes, due 2006................................................................ 124 124
Other senior notes.............................................................................. 30 30
9,178 9,360
Subsidiaries (1):
Bank notes with maturities greater than one year, due 1996-2003................................. 3,066 3,240
Floating rate mortgage-backed bonds, due 1998-2000.............................................. 2,999 3,000
Other senior notes.............................................................................. 638 635
6,703 6,875
Total senior debt............................................................................. 15,881 16,235
</TABLE>
S-11
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NATIONSBANK AS
ACTUAL ADJUSTED
(AMOUNTS IN MILLIONS)
<S> <C> <C>
SUBORDINATED DEBT:
NationsBank Corporation (parent):
9 3/8% notes, due 1997.......................................................................... 75 75
9 3/4% notes, due 1999.......................................................................... 100 100
9 1/8% notes, due 2001.......................................................................... 299 299
8 1/8% notes, due 2002.......................................................................... 350 350
6.20% to 7.875% medium-term notes, due 2003 through 2011........................................ 521 610
6 1/2% notes, due 2003.......................................................................... 600 600
7 3/4% notes, due 2004.......................................................................... 299 299
6 7/8% notes, due 2005.......................................................................... 399 399
7 5/8% notes, due 2005.......................................................................... 297 297
6 1/2% notes, due 2006.......................................................................... 300 300
7 1/2% notes, due 2006.......................................................................... 500 500
9 3/8% notes, due 2009.......................................................................... 397 397
10.20% notes, due 2015.......................................................................... 200 200
7 3/4% notes, due 2015.......................................................................... 350 350
7.80% notes, due 2016........................................................................... 447 447
8.57% medium-term notes, due 2024, putable 2004................................................. 100 100
7 1/4% notes, due 2025.......................................................................... 444 444
Other subordinated notes........................................................................ 40 40
5,718 5,807
Subsidiaries (1):
9 1/2% notes, due 2004.......................................................................... 300 300
Floating rate notes, due 2019, putable 1999..................................................... 8 8
308 308
Total subordinated debt....................................................................... 6,026 6,115
Total long-term debt.......................................................................... 21,907 22,350
Corporation-obligated mandatorily redeemable securities of NB Capital Trust I (2)................. --
SHAREHOLDERS' EQUITY
Preferred stock, authorized -- 45,000,000 shares; issued -- 5,280,406............................. 174 174
Common stock, authorized -- 800,000,000 shares; issued -- 288,111,941 (3)(4)...................... 3,956 3,956
Retained earnings................................................................................. 9,235 9,235
Other, including loan to ESOP trust............................................................... (61) (61 )
Total shareholders' equity.................................................................... 13,304 13,304
$35,211
</TABLE>
(1) These obligations are direct obligations of certain of the subsidiaries of
NationsBank and, as such, constitute claims against such subsidiaries prior
to the Corporation's equity interest therein.
(2) As described herein, the sole assets of the Trust will be $ aggregate
principal amount of % Junior Subordinated Deferrable Interest Notes, due
2026 issued by the Corporation to the Trust.
(3) On July 16, 1996, the Corporation's Board of Directors authorized the
purchase of up to 20 million shares of NationsBank common stock, from time
to time during the next 36 months, in open market or private transactions.
Also on July 16, 1996, the Board of Directors authorized the repurchase of
NationsBank common stock in the open market, from time to time over the next
13 months, representing the number of shares of NationsBank common stock the
Corporation intends to issue for its Dividend Reinvestment and Stock
Purchase Plan and other employee and director benefit plans.
(4) As of September 30, 1996, (a) 55.7 million shares of NationsBank common
stock were reserved for issuance under various employee and director benefit
plans of the Corporation and upon the conversion of the ESOP Convertible
Preferred Stock, Series C, (b) 2.8 million shares of NationsBank common
stock were reserved for issuance under the Corporation's Dividend
Reinvestment and Stock Purchase Plan and (c) 110 million shares of Common
Stock were reserved for issuance in connection with the Merger.
As of September 30, 1996, the Corporation had $2.6 billion of commercial
paper and other short-term notes payable outstanding. During the nine months
ended September 30, 1996, the amount of commercial paper and other short-term
notes payable outstanding averaged $2.7 billion and ranged from a high of $3.1
billion to a low of $2.4 billion. At September 30, 1996, the Corporation had
unused lines of credit aggregating $1.5 billion, principally to support
commercial paper borrowings.
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<PAGE>
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the Corporation's consolidated ratios of earnings to
fixed charges and ratios of earnings to combined fixed charges and preferred
stock dividend requirements for the nine months ended September 30, 1996 and for
each of the years in the five-year period ended December 31, 1995:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits...................................... 1.8 1.7 1.9 2.3 2.4 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends:
Excluding interest on deposits...................................... 1.8 1.6 1.8 2.3 2.3 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
</TABLE>
For purposes of computing the consolidated ratios, earnings represent net
income of the Corporation plus applicable income taxes and fixed charges, less
capitalized interest and the equity in undistributed earnings of unconsolidated
subsidiaries and associated companies. Fixed charges represent interest expense
(exclusive of interest on deposits in one case and inclusive of such interest in
the other), capitalized interest, amortization of debt discount and appropriate
issuance costs and one-third (the amount deemed to represent an appropriate
interest factor) of net rent expense under all lease commitments. Preferred
stock dividend requirements represent dividend requirements on the outstanding
preferred stock adjusted to reflect the pre-tax earnings that would be required
to cover such dividend requirements.
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated into the
Corporation's consolidated financial statements, with the Preferred
Securities included in the Corporation's balance sheet as Corporation-Obligated
Mandatorily Redeemable Preferred Securities of NB Capital Trust I.
USE OF PROCEEDS
The Trust will use the gross proceeds received from the sale of the
Preferred Securities to purchase Junior Subordinated Notes from NationsBank.
NationsBank intends to add the net proceeds from the sale of the Junior
Subordinated Notes to its general funds, to be used for general corporate
purposes, including the Corporation's working capital needs, the funding of
investments in, or extensions of credit to, its banking and nonbanking
subsidiaries, possible acquisitions of other financial institutions or their
assets or liabilities, possible acquisitions of or investments in other
businesses of a type eligible for bank holding companies and possible reduction
of outstanding indebtedness or repurchase of outstanding equity securities of
the Corporation. Pending such use, the Corporation may temporarily invest the
net proceeds in investment grade securities. The Corporation may, from time to
time, engage in additional capital financings of a character and in amounts to
be determined by the Corporation in light of its needs at such time or times and
in light of prevailing market conditions.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, The Bank of New York, will act as indenture
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. The following summary of the
material terms and provisions of the Preferred Securities which supplements, and
to the extent inconsistent, replaces the description set forth under the caption
"Description of the Preferred Securities" in the accompanying Prospectus does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, the Declaration, a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus Supplement is a part, the Trust
Act and the Trust Indenture Act.
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GENERAL
The Declaration authorizes the Regular Trustees to issue the Trust
Securities on behalf of the Trust, which represent undivided beneficial
interests in the assets of the Trust. All of the Common Securities will be
owned, directly or indirectly, by NationsBank. The Common Securities rank pari
passu, and payments will be made thereon on a pro rata basis, with the Preferred
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Declaration does not permit the issuance by the
Trust of any securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust. Pursuant to the Declaration, the Property Trustee
will own the Junior Subordinated Notes purchased by the Trust for the benefit of
the holders of the Trust Securities. The payment of distributions out of money
held by the Trust, and payments upon redemption of the Preferred Securities or
liquidation of the Trust, are guaranteed by NationsBank to the extent described
under "Description of the Preferred Securities Guarantees" in the accompanying
Prospectus. The Preferred Securities Guarantee will be held by The Bank of New
York, as the Preferred Guarantee Trustee, for the benefit of the holders of the
Preferred Securities. The Preferred Securities Guarantee does not cover payment
of distributions when the Trust does not have sufficient available funds to pay
such distributions. In such event, the remedy of a holder of Preferred
Securities is to vote to direct the Property Trustee to enforce the Property
Trustee's rights under the Junior Subordinated Notes. See " -- Voting Rights"
and " -- Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of percent of the stated liquidation amount of $ per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the rate per annum of percent thereof compounded quarterly. The term
"distribution" as used herein includes any such interest payable 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.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1996 and, except as otherwise described below, will be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing , when, as and if available for payment.
NationsBank has the right under the Indenture to defer payments of interest
on the Junior Subordinated Notes by extending the interest payment period from
time to time on the Junior Subordinated Notes, which, if exercised, would defer
quarterly distributions on the Preferred Securities (though such distributions
would continue to accrue with interest since interest would continue to accrue
on the Junior Subordinated Notes) during any such Extension Period. Such right
to extend the interest payment period for the Junior Subordinated Notes is
limited to a period not exceeding 20 consecutive quarters and such period may
not extend beyond the Stated Maturity of the Junior Subordinated Notes. In the
event that NationsBank exercises this right, then (a) NationsBank shall not
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than (i) purchases or acquisitions of shares of NationsBank
Common Stock in connection with the satisfaction by NationsBank of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of NationsBank capital stock for another class
or series of NationsBank capital stock or (iii) the purchase of fractional
interests in shares of NationsBank capital stock pursuant to an acquisition or
the conversion or exchange provisions of such NationsBank capital stock or the
security being converted or exchanged), (b) NationsBank shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by NationsBank that rank pari passu with or
junior to such Junior Subordinated Notes and (c) NationsBank shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee). Prior to the termination of any such Extension
Period, NationsBank may further extend the interest payment period; provided,
that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters or extend beyond the
Stated Maturity of the Junior Subordinated Notes. Upon the termination of any
Extension Period and the payment of all amounts then due, NationsBank may select
a new Extension Period, subject to the above requirements. See "Description
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of the Junior Subordinated Notes -- Interest" and " -- Option to Extend Interest
Payment Period." If distributions are deferred, the deferred distributions and
accrued interest thereon shall be paid to holders on the record date next
following the termination of such Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from NationsBank on the Junior Subordinated Notes. See
"Description of the Junior Subordinated Notes." The payment of distributions out
of moneys held by the Trust is guaranteed by NationsBank to the extent set forth
under "Description of the Preferred Securities Guarantees" in the accompanying
Prospectus.
Distributions on the Preferred Securities will be payable to the holders
thereof on the relevant record dates, which, as long as the Preferred Securities
remain in book-entry only form, will be one Business Day (as defined below)
prior to the relevant payment dates. Such distributions will be paid through the
Property Trustee who will hold amounts received in respect of the Junior
Subordinated Notes in the Property Account for the benefit of the holders of the
Trust Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment will be made as described under
" -- Book-Entry Only Issuance -- The Depository Trust Company" below. In the
event that the Preferred Securities do not continue to remain in book-entry only
form, the record dates for payment of distributions will be March 15, June 15,
September 15 and December 15. In the event that any date on which distributions
are to be made on the Preferred Securities is not a Business Day, then payment
of the distributions payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such record date. A "Business Day" shall mean any day other than a day on
which federal or state banking institutions in New York, New York or Charlotte,
North Carolina are authorized or obligated by law, executive order or regulation
to close.
MANDATORY REDEMPTION
The Junior Subordinated Notes will mature on , 2026. Moreover,
the Junior Subordinated Notes are redeemable, in whole or in part, at any time
on or after , 200 or, in whole but not in part, prior to ,
200 upon the occurrence of a Tax Event. See "Description of the Junior
Subordinated Notes." Upon the repayment of the Junior Subordinated Notes,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall simultaneously be applied to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Junior Subordinated Notes so repaid or redeemed at the Redemption Price for the
Preferred Securities equal to the liquidation amount thereof, plus accrued and
unpaid distributions; provided, that holders of Trust Securities shall be given
not less than 30 nor more than 60 days notice of such redemption. See
"Description of the Junior Subordinated Notes -- Optional Redemption." In the
event that fewer than all of the outstanding Preferred Securities are to be
redeemed, the Preferred Securities will be redeemed pro rata as described under
" -- Book-Entry Only Issuance -- The Depository Trust Company" below. Any such
distribution or redemption prior to the Stated Maturity may require prior
approval of the Federal Reserve Board.
TAX EVENT REDEMPTION
If, at any time prior to 20 , a Tax Event (as defined below)
shall occur and be continuing, NationsBank shall have the right, upon not less
than 30 and no more than 60 days notice, to redeem the Junior Subordinated
Notes, in whole (but not in part), for cash within 90 days following the
occurrence of such Tax Event and, following such redemption, all Trust
Securities shall be redeemed by the Trust at the Redemption Price; provided,
however, that if NationsBank may eliminate the Tax Event by taking some
ministerial action ("Ministerial Action") such as filing a form or making an
election; or pursuing some other similar reasonable measure that has no adverse
effect on the Trust, NationsBank or the holders of the Trust Securities,
NationsBank will pursue such Ministerial Action in lieu of redemption. Any such
Tax Event redemption may require the prior approval of the Federal Reserve
Board.
"Tax Event" means that (i) NationsBank shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States
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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 original
issuance of the Preferred Securities, there is more than an insubstantial risk
that interest payable on the Junior Subordinated Notes is not, or within 90 days
of the date thereof, will not be deductible, in whole or in part, by NationsBank
for United States federal income tax purposes or (ii) the Regular Trustees have
been informed by a nationally recognized independent tax counsel that a No
Recognition Opinion (as defined herein) cannot be delivered. "No Recognition
Opinion" means as opinion of a nationally recognized independent tax counsel
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the holders of the Trust
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
the Junior Subordinated Notes.
DISTRIBUTION OF THE JUNIOR SUBORDINATED NOTES
NationsBank will have the right at any time to dissolve the Trust and cause
the Subordinated Notes to be distributed to the holders of the Trust Securities.
Any such dissolution and distribution may require prior approval of the Federal
Reserve Board. If the Junior Subordinated Notes are distributed to the holders
of the Preferred Securities, NationsBank will use its best efforts to cause the
Junior Subordinated Notes to be listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed.
After the date for any distribution of Junior Subordinated Notes upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding, (ii) the Depositary (as defined herein) or its nominee, as
the record holder of the Preferred Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Notes to be
delivered upon such distribution, and (iii) any certificates representing
Preferred Securities not held by the Depositary or its nominee will be deemed to
represent Junior Subordinated Notes having an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the distribution rate of, and accrued and unpaid interest equal to accrued
and unpaid distributions on such Preferred Securities until such certificates
are presented to NationsBank or its agent for transfer or reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Junior Subordinated Notes that may be distributed in exchange
for the Preferred Securities upon a dissolution and liquidation of the Trust.
Accordingly, the Preferred Securities or the Junior Subordinated Notes may trade
at a discount to the price that the investor paid to purchase the Preferred
Securities offered hereby.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, provided that NationsBank has paid to the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Notes, the Trust will
irrevocably deposit with the Depositary funds sufficient to pay the applicable
Redemption Price and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the holders of the Preferred
Securities. See " -- Book-Entry Only Issuance -- The Depository Trust Company."
If notice of redemption shall have been given and funds deposited as required,
then, immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred 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 (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Trust, or by
NationsBank pursuant to the Preferred Securities Guarantee, distributions on
such Preferred Securities will continue to accrue at the then applicable rate
from the original redemption date
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to the 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.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed pro rata as
described below under " -- Book-Entry Only Issuance -- The Depository Trust
Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws and the regulations of the Federal Reserve
Board), NationsBank 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.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then holders
of the Preferred Securities will be entitled to receive out of the assets of the
Trust, after satisfaction of liabilities to creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $ per
Preferred Security plus accrued and unpaid distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
Liquidation, Junior Subordinated Notes in an aggregate stated principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest equal to
accrued and unpaid distributions on, the Preferred Securities have been
distributed on a pro rata basis to the holders of the Preferred Securities. Any
Liquidation Distribution may require prior approval of the Federal Reserve
Board.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a pro rata basis. The holders
of the Common Securities will be entitled to receive distributions upon any such
dissolution pro rata with the holders of the Preferred Securities, except that
if a Declaration Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on
20 , the expiration of the term of the Trust, (ii) upon the bankruptcy of the
Corporation, (iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Corporation, the filing of a certificate of
cancellation with respect to the Trust after obtaining the consent of the
holders of at least a majority in liquidation amount of the Trust Securities
affected thereby voting together as a single class to file such certificate of
cancellation or the revocation of the charter of NationsBank and the expiration
of 90 days after the date of revocation without a reinstatement thereof, (iv)
upon the distribution of Junior Subordinated Notes to holders of the Preferred
Securities, (v) upon the entry of a decree of a judicial dissolution of
NationsBank or the Trust, or (vi) upon the redemption of all the Trust
Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
If the Property Trustee fails to enforce its rights under the Junior
Subordinated Notes after a holder of Preferred Securities has made a written
request, such holder of record of Preferred Securities may institute a legal
proceeding against NationsBank to enforce the Property Trustee's rights under
the Junior Subordinated Notes without first instituting any legal proceeding
against the Property Trustee or any other person or entity. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Notes.
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Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Junior Subordinated Notes will have the right under
the Indenture to declare the principal of and interest on the Junior
Subordinated Notes to be immediately due and payable. NationsBank and the Trust
are each required to file annually with the Property Trustee an officer's
certificate as to its compliance with all conditions and covenants under the
Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act
and under "Description of the Preferred Securities Guarantees -- Modification of
the Preferred Securities Guarantees; Assignment" in the accompanying Prospectus,
and as otherwise required by law and the Declaration, the holders of the
Preferred Securities will have no voting rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion
in certain circumstances set forth in the last sentence of this paragraph, 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 Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration including the right to direct the Property Trustee, as holder of the
Junior Subordinated Notes, to (i) exercise the remedies available to it under
the Indenture as a holder of the Junior Subordinated Notes, (ii) waive any past
Indenture Event of Default that is waivable under the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of all the Junior
Subordinated Notes shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Notes
where such consent shall be required; provided, however, that, where a consent
or action under the Indenture would require the consent or act of holders of
more than a majority in principal amount of the Junior Subordinated Notes (a
"Super Majority") affected thereby, only the holders of at least such Super
Majority in aggregate liquidation amount of the Preferred Securities may direct
the Property Trustee to give such consent or take such action. If the Property
Trustee fails to enforce its rights under the Junior Subordinated Notes after a
holder of record of Preferred Securities has made a written request, such holder
of record of Preferred Securities may institute a legal proceeding directly
against NationsBank to enforce the Property Trustee's rights under the Junior
Subordinated Notes without first instituting any legal proceeding against the
Property Trustee or any other person or entity. The Property Trustee shall
notify all holders of the Preferred Securities of any notice of default received
from the Debt Trustee with respect to the Junior Subordinated Notes. Such notice
shall state that such Indenture Event of Default also constitutes a Declaration
Event of Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Property Trustee shall not take any of
the actions described in clauses (i), (ii) or (iii) above unless the Property
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.
In the event the consent of the Property Trustee, as the holder of the
Junior Subordinated Notes, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Property Trustee
shall request the direction of the holders of the Trust Securities with respect
to such amendment, modification or termination and shall vote with respect to
such amendment, modification or termination as directed by a majority in
liquidation amount of the Trust 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 Property Trustee may only give such consent at
the direction of the holders of at least the proportion in liquidation amount of
the Trust Securities which the relevant Super Majority represents of the
aggregate principal amount of the Junior Subordinated Notes outstanding. The
Property Trustee shall not take any such action in accordance with the
directions of the holders of the Trust Securities unless the Property 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 not be classified as other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required 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 Trust Securities or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which holders of
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Preferred Securities are entitled to vote, or of any matter upon which action by
written consent of such holders is to be taken, to be mailed to each holder of
record of Preferred Securities. Each such notice will include a statement
setting forth the following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought; and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holders of
Preferred Securities will be required for the Trust to redeem and cancel
Preferred Securities or distribute Junior Subordinated Notes in accordance with
the Declaration.
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 at such time by NationsBank or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, NationsBank, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See " -- Book-Entry Only Issuance -- The
Depository Trust Company."
Holders of the Preferred Securities will have no rights to appoint or
remove the NB Trustees, who may be appointed, removed or replaced solely by
NationsBank 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 (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and, in certain circumstances, the Property Trustee or the
Delaware Trustee, provided that, if any proposed amendment 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 Trust
Securities, whether by way of amendment to the Declaration or otherwise or (ii)
the dissolution, winding-up or termination of the Trust 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 such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of at least a majority in liquidation amount of the Trust Securities
affected thereby; provided, that, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or 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 a majority in liquidation amount of such class of
Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee or (iii) cause the Trust to be deemed an "investment
company" which is required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities, the
Property 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 "Succesor Entity") either (x) expressly assumes all of the
obligations of the Trust under the Trust Securities or (y) substitutes for the
Trust Securities other securities having substantially the same terms as the
Trust Securities (the "Successor Securities"), so long as the Successor
Securities rank the same as the Trust Securities rank with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
NationsBank expressly acknowledges a trustee of such successor entity possessing
the same powers and duties as the Property Trustee as the holder of the Junior
Subordinated Notes, (iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities of the Preferred Securities will be
listed upon notification of issuance, on any national
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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 Preferred Securities (including
any Successor Securities thereof) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such successor entity has a purpose identical
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, NationsBank 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 Trust
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the holders' interest in the new entity),
(B) following such merger, consolidation, amalgamation or replacement, neither
the Trust nor such Successor Entity will be required to register as an
investment company under the 1940 Act and (c) following such merger,
consolidation, amalgamation or replacement, the Trust or the Successor Entity
will continue to be classified as a grantor trust for United States federal
income tax purposes and (viii) NationsBank guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Preferred Securities Guarantee and the Common Securities Guarantee (as
described in the accompanying Prospectus). Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100 percent in
liquidation amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary (the
"Depositary") for the Preferred Securities. The Preferred Securities will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global Preferred Securities
certificates, representing the total aggregate number of Preferred Securities,
will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, 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 pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Participants in DTC include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Participants and by the New
York Stock Exchange, the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others, such as securities brokers and dealers, banks and trust
companies that clear transactions through or maintain a direct or indirect
custodial relationship with a Direct Participant either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Participants, which will receive a credit for the Preferred Securities
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Participants' and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased Preferred
Securities. Transfers of ownership interests in the Preferred Securities are to
be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
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DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Preferred Securities represented thereby for all
purposes under the Declaration and the Preferred Securities. No beneficial owner
of an interest in a Global Certificate will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the Declaration.
DTC has advised the Corporation that it will take any action permitted to
be taken by a holder of Preferred Securities (including the presentation of
Preferred Securities for exchange as described below) only at the direction of
one or more Participants to whose account the DTC interests in the Global
Certificates are credited and only in respect of such portion of the aggregate
liquidation amount of Preferred Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Preferred Securities, DTC will exchange the Global
Certificates for certificated securities, which it will distribute to its
Participants and which will be legended as set forth under the heading "Notices
to Investors."
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Preferred Securities held in
book-entry form will be sent to Cede & Co. If less than all of the Preferred
Securities are being redeemed, DTC will determine the amount of the interest of
each Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Participants to whose accounts the Preferred Securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distributions on the Preferred Securities held in book-entry form will be
made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payments on such payment date. Payments by Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participants and Indirect Participants and not of DTC, the Trust or the
Corporation, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to DTC is the responsibility
of the Trust, disbursement of such payments to Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Corporation, the
Trust nor the Trustee will have any responsibility for the performance by DTC or
its Participants or Indirect Participants under the rules and procedures
governing DTC. DTC may discontinue providing its services as securities
depositary with respect to the Preferred Securities at any time by giving notice
to the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Security certificates are required to be
printed and delivered. Additionally, the Trust (with the consent of the
Corporation) may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). In that event, certificates for the
Preferred Securities will be printed and delivered. In each of the above
circumstances, the Corporation will appoint a paying agent with respect to the
Preferred Securities.
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The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Preferred
Securities as represented by a Global Certificate.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities represented by the Global
Certificates shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable distribution dates or, in the case of certificated
securities, such payments shall be made by check mailed to the address of the
holder entitled thereto. The Paying Agent shall initially be The Bank of New
York. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Regular Trustees. In the event that The Bank of New
York shall no longer be the Paying Agent, the Regular Trustees shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company).
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The Property Trustee will act as registrar, transfer agent and paying agent
for the Preferred Securities. In the event The Bank of New York shall no longer
be the Paying Agent, the Regular Trustees shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company).
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Trust or the Corporation may require) in respect of any tax or
other government charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property 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, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Property Trustee also
serves as trustee under the Preferred Securities Guarantee and the Indenture.
The Corporation and certain of its affiliates have from time to time
maintained deposit accounts and conducted other banking transactions with the
Property Trustee and its affiliated entities in the ordinary course of business.
The Property Trustee also serves as trustee for certain series of the
Corporation's outstanding indebtedness under other indentures.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or characterized as other than a grantor trust for
United States federal income tax purposes. NationsBank is authorized and
directed to conduct its affairs so that the Junior Subordinated Notes will be
treated as indebtedness of NationsBank for United States federal income tax
purposes. In this connection, NationsBank and the Regular Trustees are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the certificate of incorporation of
NationsBank, that each of NationsBank and the Regular Trustees determine in
their discretion to be necessary or desirable to achieve such end, as long as
such action does not adversely affect the interests of the holders of the
Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Pursuant to the Preferred Securities Guarantee, NationsBank will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full to the holders of the Preferred Securities issued by the Trust the
Preferred Securities Guarantee Payments (as defined in the accompanying
Prospectus) (except to the extent paid by the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Trust may
have or assert. The Corporation's obligation to make a Preferred Securities
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Corporation to the holders of Preferred Securities or by causing the Trust
to pay such amounts to such holders. The Preferred Securities Guarantee will be
qualified as an indenture under the Trust Indenture Act. The Bank of New York
will act as indenture trustee under the Preferred Securities Guarantee (in such
capacity, the "Preferred Guarantee Trustee"). The terms of the Preferred
Securities Guarantee will be those set forth in such Preferred Securities
Guarantee and those made part of such Preferred Securities Guarantee by the
Trust Indenture Act. The Preferred Securities Guarantee will be held by the
Preferred Guarantee Trustee for the benefit of the holders of the Preferred
Securities. A summary description of the Preferred Securities Guarantee appears
in the accompanying Prospectus under the caption "Description of the Preferred
Securities Guarantees."
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the specific terms of the Junior
Subordinated Notes in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. This description supplements the description
of the general terms and provisions of the Junior Subordinated Notes set forth
in the accompanying Prospectus under the caption "Description of the Junior
Subordinated Notes." The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
description in the accompanying Prospectus and the Indenture, dated as of
, 1996 (the "Base Indenture"), between NationsBank and The Bank of New
York, as Trustee (the "Debt Trustee"), as supplemented by a First Supplemental
Indenture, dated as of , 1996 (the Base Indenture, as so supplemented,
is hereinafter referred to as the "Indenture"), the forms of which are filed as
Exhibits to the Registration Statement of which this Prospectus Supplement and
the accompanying Prospectus form a part. Certain capitalized terms used herein
are defined in the Indenture.
NationsBank will have the right at any time to dissolve the Trust and cause
the Junior Subordinated Notes to be distributed to the holders of the Trust
Securities. Any such distribution will require the prior approval of the Federal
Reserve Board if such prior approval is then required under its applicable
rules, guidelines or policies. If the Junior Subordinated Notes are distributed
to the holders of the Preferred Securities, NationsBank will use its best
efforts to have the Junior Subordinated Notes listed on the New York Stock
Exchange or on such other national securities exchange or similar organization
on which the Preferred Securities are then listed or quoted.
GENERAL
The Junior Subordinated Notes will be issued as unsecured debt under the
Indenture. The Junior Subordinated Notes will be limited in aggregate principal
amount to approximately $ , such amount being the sum of the
aggregate stated liquidation amount of the Trust Securities.
The Junior Subordinated Notes are not subject to a sinking fund provision.
The entire principal amount of the Junior Subordinated Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon
including Compounded Interest (as defined herein) and Additional Interest (as
defined herein), if any, on , 2026.
If Junior Subordinated Notes are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such Junior
Subordinated Notes will initially be issued as a Global Security (as defined
herein). As described herein, Junior Subordinated Notes also may be issued in
certificated form in exchange for a Global Security. See " -- Book-Entry and
Settlement" below. In the event that Junior Subordinated Notes are issued in
certificated form, such Junior Subordinated Notes will be in denominations of
$ and integral multiples thereof and may be transferred or exchanged at the
offices described below. Payments on Junior Subordinated Notes issued as a
Global Security will be made to DTC, a successor depositary or, in
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the event that no depositary is used, to a Paying Agent for the Junior
Subordinated Notes. In the event Junior Subordinated Notes are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Notes will be registrable and Junior Subordinated Notes will
be exchangeable for Junior Subordinated Notes of other denominations of a like
aggregate principal amount at the corporate trust office of the Property Trustee
in New York, New York; provided, that payment of interest may be made at the
option of NationsBank by check mailed to the address of the holder entitled
thereto or by wire transfer to an account appropriately designated by the holder
entitled thereto. Notwithstanding the foregoing, so long as the holder of any
Junior Subordinated Notes is the Property Trustee, the payment of principal and
interest on the Junior Subordinated Notes held by the Property Trustee will be
made at such place and to such account as may be designated by the Property
Trustee.
The Indenture does not contain provisions that afford holders of the Junior
Subordinated Notes protection in the event of a highly leveraged transaction or
other similar transaction involving NationsBank that may adversely affect such
holders.
SUBORDINATION
The Indenture provides that the Junior Subordinated Notes are subordinated
and junior in right of payment to all present and future Senior Obligations of
NationsBank (as defined herein) and rank pari passu and are equivalent to
creditor obligations of those holding general unsecured claims not entitled to
statutory priority under the United States Bankruptcy Code or otherwise. In
addition, no payment of principal (including redemption and sinking fund
payments), premium, if any, or interest on the Junior Subordinated Notes may be
made at any time when (i) there is a default in the payment of the principal of,
premium, if any, interest on or otherwise with respect to any Senior
Obligations, whether at maturity or any date fixed for prepayment or by
declaration or otherwise, (ii) any event of default with respect to Senior
Obligations has occurred and is continuing, or would occur as a result of such
payment on the Junior Subordinated Notes or any redemption, retirement, purchase
or other acquisition of any of the Junior Subordinated Notes, permitting the
holders of such Senior Obligations (or a trustee on behalf of the holder
thereof) to accelerate the maturity thereof. Upon any distribution of assets of
the Corporation to creditors upon any dissolution, winding-up, liquidation or
reorganization, whether voluntary or involuntary, or in a bankruptcy,
insolvency, receivership or other proceedings, the payment of the principal of,
and interest on, the Junior Subordinated Notes will, to the extent set forth in
the Indenture, be subordinated in right of payment to the prior payment in full
of all Senior Obligations of NationsBank. Upon any payment or distribution of
assets to creditors upon dissolution, winding-up, liquidation, reorganization,
assignment for benefit of creditors, marshalling of assets or any bankruptcy,
insolvency or similar proceedings of NationsBank, the holders of all Senior
Obligations will first be entitled to receive payment in full of all amount due
or to become due thereon before the holders of the Junior Subordinated Notes
will be entitled to receive and retain any payments in respect of the principal
of, or interest on, the Junior Subordinated Notes.
The term "Senior Obligations" means, with respect to NationsBank, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of
NationsBank for money borrowed (whether or not denominated as senior or
subordinated) and (B) indebtedness evidenced by securities, debentures, bonds or
other similar instruments (whether or not denominated as senior or subordinated)
issued by NationsBank, (ii) all capital lease obligations of NationsBank, (iii)
all obligations of NationsBank issued or assumed as the deferred purchase price
of property, all conditional sale obligations of NationsBank and all obligations
of NationsBank under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business), (iv) all obligations of
NationsBank for the reimbursement on any letter of credit, banker's acceptance,
or similar credit transaction, (v) all obligations of the Corporation arising
from off-balance sheet guarantees by the Corporation and direct credit
substitutes and obligations of the Corporation associated with derivative
products such as interest and foreign exchange contracts, commodity contracts,
swap agreements (including interest rate and foreign exchange swap agreements),
cap agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange rate agreements, options, commodity futures contracts and
commodity option contracts; (vi) all obligations and financial instruments of
the type referred to in clauses (i) through (v) above of other persons for the
payment of which NationsBank is responsible or liable as obligor, guarantor or
otherwise and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other persons secured by any lien on any property or asset
of NationsBank (whether or not such obligation is
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assumed by NationsBank), except for (1) any such indebtedness that is by its
terms subordinated to or ranks pari passu with the Junior Subordinated Notes and
(2) any indebtedness between or among NationsBank or its affiliates, including
all other debt securities and guarantees in respect of those debt securities,
issued to (a) any other NB Trust or a trustee of such trust and (b) any other
trust, or a trustee of such trust, partnership or other entity affiliated with
NationsBank that is a financing vehicle of NationsBank (a "financing entity") in
connection with the issuance by such financial entity of Preferred Securities or
other securities that rank pari passu with, or junior to, the Preferred
Securities.
The rights of the holders of the Junior Subordinated Notes will be
subrogated to the rights of holders of or obligees under the Senior Obligations
of NationsBank until all amounts owing to the holders of or obligees under the
Senior Obligations are paid in full. Such Senior Obligations shall continue to
be Senior Obligations and be entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Obligations.
The Indenture does not limit the aggregate amount of Senior Obligations
that may be issued by NationsBank. As of September 30, 1996, Senior Obligations
of NationsBank aggregated approximately $17.6 billion. In addition, because
NationsBank is a holding company, the Junior Subordinated Notes are effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, including obligations to depositors.
OPTIONAL REDEMPTION
NationsBank shall have the right to redeem the Junior Subordinated Notes,
in whole or in part, from time to time, on or after , 200 , but
prior to the Stated Maturity, or, in whole but not in part, prior to
200 , upon the occurrence of a Tax Event upon not less than 30 nor
more than 60 days notice, at a redemption price equal to 100 percent of the
principal amount to be redeemed plus any accrued and unpaid interest, including
Additional Interest, if any, to the redemption date; provided, in each case,
such redemption may be subject to the prior approval of the Federal Reserve
Board.
INTEREST
Junior Subordinated Notes shall bear interest at the rate of percent
per annum from the original date of issuance, payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year (each an "Interest
Payment Date"), commencing , 199 , to the person in whose name such
Junior Subordinated Notes is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
In the event the Junior Subordinated Notes shall not continue to remain in
book-entry only form, the record dates shall be the March 15, June 15, September
15 and December 15 prior to the applicable Interest Payment Date.
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 30-day
month. In the event that any date on which interest is payable on the Junior
Subordinated Notes is not a Business Day, then payment of the interest payable
on such date will be made on the next succeeding day 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, then such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
NationsBank shall have the right at any time, and from time to time, during
the term of the Junior Subordinated Notes to defer payments of interest by
extending the interest payment period for a period not exceeding 20 consecutive
quarters, but no such Extension Period may extend beyond the Stated Maturity. At
the end of any such Extension Period, NationsBank shall pay all interest then
accrued and unpaid (including any Additional Interest, as herein defined)
together with interest thereon compounded quarterly at the rate specified for
the Junior Subordinated Notes to the extent permitted by applicable law
("Compounded Interest"); provided, that during any such Extension Period, (a)
NationsBank shall not declare or pay dividends on, make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to any of its
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capital stock (other than (i) purchases or acquisitions of shares of NationsBank
Common Stock in connection with the satisfaction by NationsBank of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of NationsBank capital stock or the exchange or conversion of
one class or series of the Corporation's capital stock for another class or
series of NationsBank capital stock or (iii) the purchase of fractional
interests in shares of the Corporation's capital stock pursuant to an
acquisition or the conversion or exchange provisions of such NationsBank capital
stock or the security being converted or exchanged), (b) NationsBank shall not
make any payment of principal, premium, if any, or interest on or repay,
repurchase or redeem any debt securities issued by NationsBank that rank pari
passu with or junior to the Junior Subordinated Notes and (c) NationsBank shall
not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee). Prior to the termination of any
such Extension Period, NationsBank may further defer payments of interest by
extending the interest payment period; provided, however, that, such Extension
Period, including all such previous and further extensions, may not exceed 20
consecutive quarters or beyond the Stated Maturity. Upon the termination of any
Extension Period and the payment of all amounts then due, NationsBank may
commence a new Extension Period, subject to the terms set forth in this section.
No interest shall be due and payable during an Extension Period, except at the
end thereof, but NationsBank may prepay at any time all or any portion of the
interest accrued during an Extension Period. NationsBank has no present
intention of exercising its right to defer payments of interest by extending the
interest payment period on the Junior Subordinated Notes. If the Property
Trustee shall be the sole holder of the Junior Subordinated Notes, NationsBank
shall give the Regular Trustees and the Property Trustee notice of its selection
of such Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Preferred Securities are payable or (ii) the date the
Regular Trustees are required to give notice of the record date or the date such
distribution is payable to the New York Stock Exchange (or other applicable
self-regulatory organization) or to holders of the Preferred Securities, but in
any event at least one Business Day before such record date. The Regular
Trustees shall give notice of the Corporation's selection of such Extension
Period to the holders of the Preferred Securities. If the Property Trustee shall
not be the sole holder of the Junior Subordinated Notes, NationsBank shall give
the holders of the Junior Subordinated Notes notice of its selection of such
Extension Period at least 10 Business Days prior to the earlier of (i) the
Interest Payment Date or (ii) the date upon which NationsBank is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange (or other applicable self-regulatory organization) or to
holders of the Junior Subordinated Notes.
ADDITIONAL INTEREST
If at any time the Trust shall be 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 domestic taxing authority,
then, in any such case, NationsBank will pay as additional interest ("Additional
Interest") such additional amounts as shall be required so that the net amounts
received and retained by the Trust after paying any such taxes, duties,
assessments or other governmental charges will be not less than the amounts the
Trust would have received had no such taxes, duties, assessments or other
governmental charges been imposed.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Junior Subordinated Notes, will have the
right to declare the principal of and the interest on the Junior Subordinated
Notes (including any Compounded Interest and Additional Interest, if any) and
any other amounts payable under the Indenture to be forthwith due and payable
and to enforce its other rights as a creditor with respect to the Junior
Subordinated Notes. "Indenture Events of Default" are limited to certain events
of bankruptcy, insolvency and reorganization of the Corporation and certain
events of dissolution, winding-up or termination of the Trust and do not include
defaults of the Corporation in payment obligations with request to the Junior
Subordinated Notes or defaults of the Corporation under the Preferred Securities
Guarantee. See "Description of Junior Subordinated Notes -- Events of Default,
Waiver and Notice" in the accompanying Prospectus for a description of the
Indenture Events of Default. An Indenture Event of Default also constitutes a
Declaration Event of Default. The holders of Preferred Securities in certain
circumstances have the right to
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direct the Property Trustee to exercise its rights as the holder of the Junior
Subordinated Notes. See "Description of the Preferred Securities -- Declaration
Events of Default" and " -- Voting Rights." The holders of Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Notes.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of the Trust as
a result of the election of the Corporation, the Junior Subordinated Notes will
be issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the Depositary or its nominee. Except under
the limited circumstances described below, Junior Subordinated Notes represented
by the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Junior Subordinated Notes in definitive form. The Global Securities
described above may not be transferred except by the Depositary to a nominee of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor Depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Junior
Subordinated Notes in definitive form and will not be considered the holders (as
defined in the Indenture) thereof for any purpose under the Indenture, and no
Global Security representing Junior Subordinated Notes shall be exchangeable,
except for another Global Security of like denomination and tenor to be
registered in the name of the Depositary or its nominee or to a successor
Depositary or its nominee. Accordingly, each Beneficial Owner must rely on the
procedures of the Depositary or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Junior Subordinated Notes are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Junior Subordinated Notes. For a description of
DTC and the specific terms of the depositary arrangements, see "Description of
the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Corporation." As of the date of this Prospectus Supplement, the description
therein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Preferred
Securities apply in all material respects to any debt obligations represented by
one or more Global Securities held by NationsBank. NationsBank may appoint a
successor to DTC or any successor depositary in the event DTC or such successor
depositary is unable or unwilling to continue as a depositary for the Global
Securities.
None of NationsBank, the Trust, the Property Trustee, any paying agent and
any other agent of NationsBank, or the Debt 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 a Global Security for such Junior
Subordinated Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Junior Subordinated Notes
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies NationsBank that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the Depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) NationsBank, in its sole discretion,
determines that such Global Security shall be so exchangeable or (iv) there
shall have occurred an Event of Default with respect to such Junior Subordinated
Notes. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Junior Subordinated Notes registered in such
names as the Depositary shall direct. It is expected that
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such instructions will be based upon directions received by the Depositary from
its Participants with respect to ownership of beneficial interests in such
Global Security.
GOVERNING LAW
The Indenture and the Junior Subordinated Notes will be governed by, and
construed in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Indenture provides that NationsBank will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Junior Subordinated
Notes, (ii) the organization, maintenance and dissolution of the Trust, (iii)
the retention of the NB Trustees and (iv) the enforcement by the Property
Trustee of the rights of the holders of the Preferred Securities. The payment of
such fees and expenses will be fully and unconditionally guaranteed by
NationsBank.
NationsBank will have the right at all times to assign any of its
respective rights or obligations under the Indenture to a direct or indirect
wholly-owned subsidiary of NationsBank; provided that, in the event of any such
assignment, NationsBank will remain liable for all of their respective
obligations. Subject to the foregoing, the Indenture will be binding upon and
inure to the benefit of the parties thereto and their respective successors and
assigns. The Indenture provides that it may not otherwise be assigned by the
parties thereto.
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EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED
NOTES AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, and to invest the proceeds from such issuance and sale in the Junior
Subordinated Notes.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Notes, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Junior Subordinated Notes will be
equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Junior Subordinated Notes will match the distribution rate and distribution
and other payment dates for the Preferred Securities; (iii) NationsBank shall
pay all, and the Trust shall not be obligated to pay, directly or indirectly,
all costs, expenses, debt, and obligations of the Trust (other than with respect
to the Trust Securities); and (iv) the Declaration further provides that the
Regular Trustees shall not take or cause or permit the Trust to, among other
things, engage in any activity that is not consistent with the purposes of the
Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed on a subordinated basis by NationsBank as and to the
extent set forth under "Description of the Preferred Securities Guarantees" in
the accompanying Prospectus. If NationsBank does not make interest payments on
the Junior Subordinated Notes purchased by the Trust, it is expected that the
Trust will not have sufficient funds to pay distributions on the Preferred
Securities. The Preferred Securities Guarantee does not apply to any payment of
distributions unless and until the Trust has sufficient funds for the payment of
such distributions. The Preferred Securities Guarantee covers the payment of
distributions and other payments on the Preferred Securities only if and to the
extent that NationsBank has made a payment of interest or principal on the
Junior Subordinated Notes held by the Trust as its sole asset. The Preferred
Securities Guarantee, when taken together with the Corporation's obligations
under the Junior Subordinated Notes and the Indenture and its obligations under
the Declaration, including its obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities),
provide a full and unconditional guarantee on a subordinated basis of amounts on
the Preferred Securities.
If NationsBank fails to make interest or other payments on the Junior
Subordinated Notes when due (taking account of any Extension Period), the
Declaration provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Corporation" and
" -- Voting Rights," may direct the Property Trustee to enforce its rights under
the Junior Subordinated Notes. If the Property Trustee fails to enforce its
rights under the Junior Subordinated Notes, a holder of Preferred Securities may
institute a legal proceeding against NationsBank to enforce the Property
Trustee's rights under the Junior Subordinated Notes without first instituting
any legal proceeding against the Property Trustee or any other person or entity.
NationsBank, under the Preferred Securities Guarantee, acknowledges that the
Preferred Guarantee Trustee shall enforce the Preferred Securities Guarantee on
behalf of the holders of the Preferred Securities. If NationsBank fails to make
payments under the Preferred Securities Guarantee, the Preferred Securities
Guarantee provides a mechanism whereby the holders of the Preferred Securities
may direct the Preferred Guarantee Trustee to enforce its rights thereunder. Any
holder of Preferred Securities may institute a legal proceeding directly against
NationsBank to enforce the Preferred Guarantee Trustee's rights under the
Preferred Securities Guarantee without first instituting a legal proceeding
against the Trust, the Preferred Guarantee Trustee, or any other person or
entity.
NationsBank and the Trust believe that the above mechanisms and
obligations, taken together, provide a full and unconditional guarantee by
NationsBank on a subordinated basis of payments due on the Preferred Securities.
See "Description of the Preferred Securities Guarantees -- General" in the
accompanying Prospectus.
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UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In the opinion of Stroock & Stroock & Lavan, special tax counsel to
NationsBank and the Trust ("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. Unless otherwise stated, this
summary deals only with Preferred Securities held as capital assets by holders
who purchase the Preferred Securities upon original issuance ("Initial
Holders"). 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,
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 thereunder and administrative and judicial interpretations
thereof, as of the date hereof, all of which are subject to change, possibly on
a retroactive basis.
CLASSIFICATION OF THE JUNIOR SUBORDINATED NOTES
In connection with the issuance of the Junior Subordinated Notes, Tax
Counsel will render its opinion generally to the effect that under then 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 such
opinion, the Junior Subordinated Notes will be classified for United States
federal income tax purposes as indebtedness of NationsBank.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Preferred Securities, Tax Counsel
will render its opinion generally to the effect that, under then 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 such opinion, 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. Accordingly, for United States federal income tax purposes,
each holder of Preferred Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Notes, and each holder will be
required to include in its gross income any interest (or accrued OID) with
respect to its allocable share of those Junior Subordinated Notes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations (the "Regulations") applicable
to debt instruments issued on or after August 13, 1996, a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with OID. NationsBank believes that the
likelihood of its exercising its option to defer payments of interest is
"remote" since exercising that option would prevent NationsBank from declaring
dividends on any class of its equity. Accordingly, NationsBank intends to take
the position, based on the advice of Tax Counsel, that the Junior Subordinated
Notes will not be considered to be issued with OID and, accordingly, stated
interest on the Junior Subordinated Notes generally will be taxable to a holder
as ordinary income at the time it is paid or accrued in accordance with such
holder's method of accounting.
Under the Regulations, if NationsBank were to exercise its option to defer
payments of interest, the Junior Subordinated Notes would at that time be
treated as issued with OID, and all stated interest on the Junior Subordinated
Notes would thereafter be treated as OID as long as the Junior Subordinated
Notes remain outstanding. In such event, all of a holder's taxable interest
income with respect to the Junior Subordinated Notes would thereafter be
accounted for on an economic accrual basis regardless of such holder's method of
tax accounting, and actual distributions of stated interest would not be
reported as taxable income. Consequently,
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a holder of Preferred Securities would be required to include OID in its gross
income even though NationsBank would not make actual cash payments during an
Extension Period.
The Regulations have not yet been addressed in any rulings or other
interpretations by the Internal Revenue Service ("IRS"), and the IRS could take
a position that the likelihood of deferral is not remote.
Because income on the Preferred Securities will constitute interest or OID,
corporate holders of Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Preferred Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Preferred Securities other than Initial Holders may be
considered to have acquired their undivided interests in the Junior Subordinated
Notes with market discount or acquisition premium as such phrases are defined
for United States federal income tax purposes. Such holders are advised to
consult their tax advisors as to the income tax consequences of the acquisition,
ownership and disposition of the Preferred Securities.
RECEIPT OF JUNIOR SUBORDINATED NOTES OR CASH UPON LIQUIDATION OF NB CAPITAL
TRUST
NationsBank will have the right at any time to dissolve the Trust and cause
the Junior Subordinated Notes to be distributed to the holders of the Trust
Securities, provided that NationsBank has received prior approval from the
Federal Reserve Board if required. 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 Notes equal to such holder's aggregate tax basis in its
Preferred Securities. A holder's holding period in the Junior Subordinated Notes
so received in liquidation of the Trust would include the period during which
the Preferred Securities were held by such holder. If, however, at the time of
the dissolution of the Trust there has been a Tax Event or similar circumstance
which results in the Trust being treated as an association taxable as a
corporation, the distribution of the Junior Subordinated Notes would likely
constitute a taxable event to holders of Preferred Securities.
Under certain circumstances described herein (see "Description of the
Preferred Securities"), the Junior Subordinated Notes may be redeemed for cash
and the proceeds of such 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 as
if it sold such redeemed Preferred Securities for cash. See "United States
Federal Income Taxation -- Sales of Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities 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 such 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 such holder's gross income to
the date of disposition and decreased by payments received on the Preferred
Securities that are principal payments on the Junior Subordinated Notes. Such
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 for
more than one year.
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 Notes. A holder who uses the accrual method of accounting
for tax purposes (and a cash method holder, if the Junior Subordinated Notes are
deemed to be issued with OID) and who disposes of his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Junior Subordinated Notes through the
date of disposition in income as ordinary income (i.e., interest or, possibly,
OID), and to add such amount to his adjusted tax basis in his pro rata share of
the underlying Junior Subordinated Notes 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.
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UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, under United
States tax law, a foreign corporation, a non-resident alien individual, a
foreign partnership, or an estate or trust treated as a foreign estate or trust
under Section 7701(a)(31) of the Code.
Under present United States federal income tax law: (i) payments by the
Trust or any of its paying agents to any holder of a Preferred Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (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 NationsBank entitled
to vote, (b) the beneficial owner of the Preferred Security is not a controlled
foreign corporation that is related to NationsBank through stock ownership, and
(c) either (A) the beneficial owner of the Preferred Security certifies to the
Trust or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a 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 such capacity, certifies to
the Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (ii) a United States Alien Holder of a Preferred Security will not
be subject to United States federal withholding tax on any gain realized upon
the sale or other disposition of a Preferred Security.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "Proposed Legislation") if such debt obligations have a maximum term
in excess of 20 years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued a joint statement (the "Joint Statement") indicating
their intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the views expressed in
the Joint Statement (the "Democrat Letters"). Based upon the Joint Statement and
the Democrat Letters, it is expected that if the Proposed Legislation were to be
enacted, such legislation would not apply to the Junior Subordinated Notes.
There can be no assurances, however, that the effective date guidance contained
in the Joint Statement and the Democrat Letters will be incorporated into the
Proposed Legislation, if enacted, or that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of the Corporation
to deduct the interest payable on the Junior Subordinated Notes. Accordingly,
there can be no assurance that a Tax Event will not occur. See "Description of
the Preferred Securities -- Tax Event Redemption."
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 of 31 percent 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 Service.
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 TAX ADVISORS WITH
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RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), NB Capital Trust has agreed to sell to each of
the Underwriters named below, and each of the Underwriters, for whom Merrill
Lynch, Pierce, Fenner & Smith Incorporated, are acting as
representatives (the "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 therein, to purchase all the Preferred Securities
offered hereby if any of the Preferred Securities are purchased. In the event of
default by an Underwriter, the Underwriting Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS PREFERRED SECURITIES
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................................
Total....................................................................
</TABLE>
The Representatives have advised the Trust that they propose initially to
offer the Preferred Securities to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers at
such price less a concession not in excess of $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per Preferred Security to certain dealers. After the initial public
offering, the public offering price, concessions and discount may be changed.
In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used to purchase the Junior Subordinated Notes of
NationsBank, the Underwriting Agreement provides that NationsBank will pay as
compensation ("Underwriters' Compensation") to the Underwriters arranging the
investment therein of such proceeds, an amount in immediately available funds of
$ per Preferred Security (or $ in the aggregate) for the accounts
of the several Underwriters; provided that, such compensation for sales of
10,000 or more Preferred Securities to any single purchaser will be $ per
Preferred Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified in
the preceding sentence.
The Trust has granted the Underwriters an option to purchase up to an
additional Preferred Securities at the initial public offering price
less the underwriting discount. Such option, which expires 30 days from the date
of this Prospectus, may be exercised solely to cover over-allotments. To the
extent that the Underwriters exercise such option, each of the Underwriters will
have a firm commitment, subject to certain conditions, to purchase approximately
the same percentage of the additional Preferred Securities that the number of
Preferred Securities to be purchased initially by the Underwriter is of the
Preferred Securities initially purchased by the Underwriters.
To the extent that the Underwriters exercise their option to purchase
additional Preferred Securities, the Trust shall issue and sell to the
Corporation, additional Common Securities and the Corporation shall issue and
sell to the Trust, Junior Subordinated Notes in an aggregate principal amount
equal to the total aggregate liquidation amount of the additional Preferred
Securities being purchased pursuant to the option.
During a period of 30 days from the date of the Prospectus Supplement,
neither NB Capital Trust nor NationsBank 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
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or exchangeable into or exercisable for Preferred Securities or Junior
Subordinated Notes or any debt securities substantially similar to the Junior
Subordinated Notes or equity securities substantially similar to the Preferred
Securities (except for the Junior Subordinated Notes and the Preferred
Securities offered hereby).
Application has been made to list the Preferred Securities on the New York
Stock Exchange. If such listing is approved, trading of the Preferred Securities
on the New York Stock Exchange is expected to commence within a 30-day period
after the initial delivery of the Preferred Securities. The Representatives have
advised NB Capital Trust that they intend to make a market in the Preferred
Securities prior to the commencement of trading on the New York Stock Exchange.
The Representatives will have no obligation to make a market in the Preferred
Securities, however, and may cease market-making activities, if commenced, at
any time.
Prior to this offering there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
NB Capital Trust and NationsBank 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.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, NationsBank and its subsidiaries in the
ordinary course of business.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the NB Capital Trust by Richards,
Layton & Finger, special Delaware counsel to the NB Capital Trust. The validity
of the Junior Subordinated Notes and the Preferred Securities Guarantees and
certain matters relating thereto will be passed upon for NationsBank by Smith
Helms Mulliss & Moore, L.L.P. and for the underwriters by Stroock & Stroock &
Lavan. Certain United States federal income taxation matters will be passed upon
for NationsBank and the NB Capital Trust by Stroock & Stroock & Lavan, special
tax counsel to NationsBank and the NB Capital Trust. Smith Helms Mulliss &
Moore, L.L.P. and Stroock & Stroock & Lavan will rely on the opinion of
Richards, Layton & Finger as to matters of Delaware law. As of the date of this
Prospectus Supplement, certain members of Smith Helms Mulliss & Moore, L.L.P.
beneficially own approximately 50,000 shares of the Corporation's common stock.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER , 1996
PROSPECTUS
$1,000,000,000
NATIONSBANK(Register mark)
JUNIOR SUBORDINATED NOTES
NB CAPITAL TRUST I
NB CAPITAL TRUST II
NB CAPITAL TRUST III
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
NATIONSBANK(Register mark)
NationsBank Corporation ("NationsBank" or the "Corporation") may offer from
time to time its subordinated debentures, notes or other evidence of
indebtedness (the "Junior Subordinated Notes") in one or more series and in
amounts, at prices and on terms to be determined at the time of the offering.
The Junior Subordinated Notes when issued will be unsecured obligations of the
Corporation. The Corporation's obligations under the Junior Subordinated Notes
will be subordinate and junior in right of payment to other indebtedness of the
Corporation, as may be described in an accompanying Prospectus Supplement (the
"Prospectus Supplement") and in an aggregate amount to be set forth as of the
most recent practicable date in such Prospectus Supplement.
NB Capital Trust I, NB Capital Trust II and NB Capital Trust III (each, a
"NB Capital Trust"), each a statutory business trust formed under the laws of
the State of Delaware, may offer, from time to time, preferred securities,
representing undivided beneficial interests in the assets of the respective NB
Capital Trust ("Preferred Securities"). The payment of periodic cash
distributions ("distributions") with respect to Preferred Securities of each of
the NB Capital Trusts out of moneys held by each of the NB Capital Trusts, and
payment on liquidation, redemption or otherwise with respect to such Preferred
Securities, will be guaranteed by NationsBank to the extent described herein
(each a "Preferred Securities Guarantee"). See "Description of the Preferred
Securities Guarantees" below. The Corporation's obligations under the Preferred
Securities Guarantees will be subordinate and junior in right of payment to all
other liabilities, including contingent liabilities, of the Corporation and will
rank pari passu with the most senior preferred or preference stock now or
hereafter issued by the Corporation and with any guarantee now or hereafter
entered into by NationsBank in respect of any preferred or preference stock of
any affiliate of the Corporation. Junior Subordinated Notes may be issued and
sold from time to time in one or more series to a NB Capital Trust, or a trustee
of such NB Capital Trust, in connection with the investment of the proceeds from
the offering of Preferred Securities and Common Securities (as defined herein,
together the "Trust Securities") of such NB Capital Trust. The Junior
Subordinated Notes purchased by a NB Capital Trust may be subsequently
distributed pro rata to holders of the Trust Securities in connection with the
dissolution of such NB Capital Trust upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement. The Junior
Subordinated Notes and the Preferred Securities and the related Preferred
Securities Guarantees are sometimes collectively referred to hereafter as the
"Offered Securities."
Specific terms of the Junior Subordinated Notes of any series or the
Preferred Securities of any NB Capital Trust, the terms of which will mirror the
terms of the Junior Subordinated Notes held by any NB Capital Trust, in respect
of which this prospectus (the "Prospectus") is being delivered will be set forth
in a Prospectus
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Supplement with respect to such securities, which will describe, without
limitation and where applicable, the following: (i) in the case of Junior
Subordinated Notes, the specific designation, aggregate principal amount,
denomination, maturity, premium, if any, any exchange, conversion, redemption or
sinking fund provisions, if any, interest rate (which may be fixed or variable),
if any, the time and method of calculating interest payments, if any, dates on
which premium, if any, and interest, if any, will be payable, the right of
NationsBank, if any, to defer payment of interest on the Junior Subordinated
Notes and the maximum length of such deferral period, the initial public
offering price, subordination terms, and any listing on a securities exchange
and other specific terms of the offering; and (ii) in the case of Preferred
Securities, the designation, number of securities, liquidation preference per
security, initial public offering price, any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
any voting rights, terms for any conversion or exchange into other securities,
any redemption, exchange or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Junior Subordinated
Notes of NationsBank.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering. The Prospectus Supplement relating to any
series of Offered Securities will contain information concerning certain United
States federal income tax considerations, if applicable to the Offered
Securities.
NationsBank and/or each of the NB Capital Trusts may sell the Offered
Securities directly, through agents designated from time to time, or through
underwriters or dealers. See "Plan of Distribution" below. If any agents of
NationsBank and/or any NB Capital Trust or any underwriters or dealers are
involved in the sale of the Offered Securities, the names of such agents,
underwriters or dealers and any applicable commissions and discounts will be set
forth in any related Prospectus Supplement.
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
THE OFFERED SECURITIES ARE NOT SAVINGS ACCOUNTS OR BANK DEPOSITS, ARE NOT
OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF
NATIONSBANK (EXCEPT TO THE EXTENT THAT THE PREFERRED SECURITIES
ARE GUARANTEED BY NATIONSBANK AS DESCRIBED HEREIN), ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY AND INVOLVE INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA (THE "COMMISSIONER") OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION, THE COMMISSIONER OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1996
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS OR ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY NATIONSBANK
CORPORATION, ANY OF THE NB CAPITAL TRUSTS OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NATIONSBANK
CORPORATION
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OR ANY OF THE NB CAPITAL TRUSTS SINCE THE DATE HEREOF. THIS PROSPECTUS OR ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO
OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Corporation with the
Securities and Exchange Commission (the "Commission") pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), are
incorporated herein by reference:
(a) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995;
(b) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
(c) The Corporation's Current Reports on Form 8-K filed January 12,
1996, February 1, 1996, March 8, 1996, April 17, 1996, May 16, 1996, July
5, 1996, July 31, 1996, September 6, 1996 (as amended by Form 8-K/A-1 filed
September 11, 1996 and Form 8-K/A-2 filed November 13, 1996), September 20,
1996 (as amended by Form 8-K/A filed September 23, 1996), October 25, 1996
and November 14, 1996; and
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, and
any amendment or report filed for the purpose of updating such description,
including the Corporation's Current Report on Form 8-K filed on September
21, 1994.
All reports and any definitive proxy or information statements filed by the
Corporation with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the 1934 Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Offered Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO JOHN
E. MACK, SENIOR VICE PRESIDENT AND TREASURER, NATIONSBANK CORPORATION,
NATIONSBANK CORPORATE CENTER, CORPORATE TREASURY DIVISION, CHARLOTTE, NORTH
CAROLINA 28255. TELEPHONE REQUESTS MAY BE DIRECTED TO (704) 386-5972.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed by NationsBank and the NB Capital Trusts with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Offered Securities. This Prospectus does not contain all of the
information set forth in such Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, although
it does include a summary of the material terms of the Indenture and the
Declarations (each as defined herein). Reference is made to such Registration
Statement and to the exhibits relating thereto for further information with
respect to the NationsBank, the NB Capital Trusts and the Offered Securities.
Any statements contained herein concerning the provisions of any document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission or incorporated by reference herein are not necessarily complete,
and, in each instance, reference is made to the copy of such document so filed
for a more complete description of the matter involved. Each such statement is
qualified in its entirety by such reference.
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NationsBank is subject to the informational requirements of the 1934 Act
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the following public reference
facilities maintained by the Commission: 450 Fifth Street, N.W., Washington,
D.C. 20549; 7 World Trade Center, Suite 1300, New York, New York 10048; and the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material may also be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, upon payment of prescribed rates. The Commission
maintains an Internet web site that contains reports, proxy and information
statements and other information regarding issuers who file electronically with
the Commission. The address of that site is http://www.sec.gov. In addition,
reports, proxy statements and other information concerning NationsBank may be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005 and at the offices of The Pacific Stock Exchange
Incorporated, 301 Pine Street, San Francisco, California 94104.
No separate financial statements of any of the NB Capital Trusts have been
included herein. NationsBank does not consider that such financial statements
would be material to holders of the Preferred Securities because (i) all of the
voting securities of each of the NB Capital Trusts will be owned, directly or
indirectly, by NationsBank, a reporting company under the 1934 Act, (ii) each of
the NB Capital Trusts has no independent operations but exists for the sole
purpose of issuing securities representing undivided beneficial interests in the
assets of such NB Capital Trust and investing the proceeds thereof in Junior
Subordinated Notes issued by NationsBank, and (iii) the Corporation's
obligations described herein and in any accompanying Prospectus Supplement to
provide certain indemnities in respect of and be responsible for certain costs,
expenses, debts and liabilities of each of the NB Capital Trusts under the
Indenture and any supplemental indenture thereto and pursuant to the
Declarations of each NB Capital Trust, the guarantee issued with respect to
Preferred Securities issued by that NB Capital Trust, the Junior Subordinated
Notes purchased by that NB Capital Trust and the related Indenture, taken
together, constitute a full and unconditional guarantee of payments due on the
Preferred Securities. See "Description of the Junior Subordinated Notes" and
"Description of the Preferred Securities Guarantees."
The NB Capital Trusts are not currently subject to the information
reporting requirements of the 1934 Act. The NB Capital Trusts will become
subject to such requirements upon the effectiveness of the Registration
Statement, although they intend to seek and expect to receive exemptions
therefrom.
NATIONSBANK CORPORATION
GENERAL
NationsBank is a multi-bank holding company established as a North Carolina
corporation in 1968 and is registered under the Bank Holding Company Act of
1956, as amended (the "BHCA"), with its principal assets being the stock of its
subsidiaries. Through its banking subsidiaries (the "Banks") and its various
non-banking subsidiaries, NationsBank provides banking and banking-related
services, primarily throughout the Southeast and Mid-Atlantic states and Texas.
The principal executive offices of NationsBank are located at NationsBank
Corporate Center in Charlotte, North Carolina 28255. Its telephone number is
(704) 386-5000.
OPERATIONS
NationsBank provides a diversified range of banking and certain nonbanking
financial services and products through its various subsidiaries. NationsBank
manages its business activities through three major business units: the General
Bank, Global Finance and Financial Services.
The General Bank provides comprehensive services in the commercial and
retail banking fields, including the origination and servicing of home mortgage
loans, the issuance and servicing of credit cards (through a Delaware
subsidiary), indirect lending, dealer finance and certain insurance services.
The General Bank also provides retirement services for defined benefit and
defined contribution plans, full service and discount brokerage services, and
investment advisory services to institutional clients, including advising the
NationsFund family of mutual funds, as well as private banking, fiduciary and
investment management services through subsidiaries of NationsBank. As of
September 30, 1996, the General Bank operated 1,980 banking offices
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through the following Banks: NationsBank, N.A. (serving the states of North
Carolina, South Carolina, Maryland and Virginia and the District of Columbia);
NationsBank, N.A. (South) (serving the states of Florida and Georgia);
NationsBank of Kentucky, N.A.; NationsBank of Tennessee, N.A.; NationsBank of
Texas, N.A.; and Sun World, N.A. (serving the state of Texas). The General Bank
also provides fully automated, 24-hour cash dispensing and depositing services
throughout the states in which it is located, through 3,609 automated teller
machines.
Global Finance provides comprehensive corporate and investment banking as
well as trading and distribution services to domestic and international
customers. The group serves as a principal lender and investor, as well as an
advisor, arranger and underwriter, and manages treasury and trade transactions
for clients and customers. Loan origination and syndication, asset-backed
lending, leasing, factoring, project finance and mergers and acquisitions are
representative of the services provided by the group. Global Finance also
underwrites, trades and distributes a wide range of securities (including
bank-eligible securities and, to a limited extent, bank-ineligible securities as
authorized by the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board")), and trades and distributes a wide range of derivative products
in certain interest rate, foreign exchange, commodity and equity markets. Global
Finance provides its services through various offices located in major United
States cities as well as in London, Frankfurt, Singapore, Bogota, Mexico City,
Grand Cayman, Nassau, Seoul, Tokyo, Osaka, Taipei and Hong Kong.
Financial Services includes NationsCredit Consumer Corporation, primarily a
consumer finance subsidiary, and NationsCredit Commercial Corporation, primarily
a commercial finance subsidiary. NationsCredit Consumer Corporation, which has
approximately 331 offices located in 36 states, provides personal, mortgage and
automobile loans to consumers and retail finance programs to dealers.
NationsCredit Commercial Corporation consists of seven divisions that specialize
in one or more of the following areas: equipment loans and leasing; loans for
debt restructuring, mergers and acquisitions and working capital; real estate,
golf/recreational and health care financing; and inventory financing to
manufacturers, distributors and dealers.
As part of its operations, NationsBank regularly evaluates the potential
acquisition of, and holds discussions with, various financial institutions and
other businesses of a type eligible for bank holding company investment. In
addition, NationsBank regularly analyzes the values of, and submits bids for,
the acquisition of customer-based funds and other liabilities and assets of such
financial institutions and other businesses. As a general rule, NationsBank
publicly announces such material acquisitions when a definitive agreement has
been reached.
SUPERVISION AND REGULATION
GENERAL. As a registered bank holding company, NationsBank is subject to
the supervision of, and to regular inspection by, the Federal Reserve Board. The
Banks are organized as national banking associations, which are subject to
regulation, supervision and examination by the Office of the Comptroller of the
Currency (the "Comptroller"). The Banks are also subject to regulation by the
Federal Deposit Insurance Corporation (the "FDIC") and other federal regulatory
agencies. In addition to banking laws, regulations and regulatory agencies,
NationsBank and its subsidiaries and affiliates are subject to various other
laws and regulations and supervision and examination by other regulatory
agencies, all of which directly or indirectly affect the Corporation's
operations, management and ability to make distributions. The following
discussion summarizes certain aspects of those laws and regulations that affect
NationsBank.
Under the BHCA, the activities of NationsBank, and those of companies which
it controls or in which it holds more than 5% of the voting stock, are limited
to banking or managing or controlling banks or furnishing services to or
performing services for its subsidiaries, or any other activity which the
Federal Reserve Board determines to be so closely related to banking or managing
or controlling banks as to be a proper incident thereto. In making such
determinations, the Federal Reserve Board is required to consider whether the
performance of such activities by a bank holding company or its subsidiaries can
reasonably be expected to produce benefits to the public such as greater
convenience, increased competition or gains in efficiency that outweigh possible
adverse effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest or unsound banking practices. Generally, bank
holding companies, such as NationsBank, are required to obtain prior approval of
the Federal Reserve Board to engage in any new activity not previously approved
by the Federal Reserve Board or to acquire more than 5% of any class of voting
stock of any company.
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The BHCA also requires bank holding companies to obtain the prior approval
of the Federal Reserve Board before acquiring more than 5% of any class of
voting stock of any bank which is not already majority-owned by the bank holding
company. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 (the "Interstate Banking and Branching Act"), a bank holding company
became able to acquire banks in states other than its home state beginning
September 29, 1995, without regard to the permissibility of such acquisition
under state law, but subject to any state requirement that the bank has been
organized and operating for a minimum period of time, not to exceed five years,
and the requirement that the bank holding company, prior to or following the
proposed acquisition, controls no more than 10% of the total amount of deposits
of insured depository institutions in the United States and no more than 30% of
such deposits in that state (or such lesser or greater amount set by state law).
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, therefore creating interstate branches, beginning June 1,
1997. Under such legislation, each state has the opportunity either to "opt out"
of this provision, thereby prohibiting interstate branching in such states, or
to "opt in" at an earlier time, thereby allowing interstate branching within
that state prior to June 1, 1997. Furthermore, pursuant to such act, a bank is
now able to open new branches in a state in which it does not already have
banking operations if the laws of such state permit such DE NOVO branching. Of
those states in which the Banks are located, Delaware, Maryland, North Carolina
and Virginia have enacted legislation to "opt in," thereby permitting interstate
branching prior to June 1, 1997, and Texas has adopted legislation to "opt out"
of the interstate branching provisions (which Texas law currently expires on
September 2, 1999).
As previously described, NationsBank regularly evaluates merger and
acquisition opportunities, and it anticipates that it will continue to evaluate
such opportunities in light of the new legislation.
Proposals to change the laws and regulations governing the banking industry
are frequently introduced in Congress, in the state legislatures and before the
various bank regulatory agencies.
CAPITAL AND OPERATIONAL REQUIREMENTS. The Federal Reserve Board, the
Comptroller and the FDIC have issued substantially similar risk-based and
leverage capital guidelines applicable to United States banking organizations.
In addition, those regulatory agencies may from time to time require that a
banking organization maintain capital above the minimum levels, whether because
of its financial condition or actual or anticipated growth.
The Federal Reserve Board risk-based guidelines define a two-tier capital
framework. Tier 1 capital consists of common and qualifying preferred
shareholders' equity, less certain intangibles and other adjustments. Tier 2
capital consists of subordinated and other qualifying debt, and the allowance
for credit losses up to 1.25% of risk-weighted assets. The sum of Tier 1 and
Tier 2 capital less investments in unconsolidated subsidiaries represents
qualifying total capital, at least 50% of which must consist of Tier 1 capital.
Risk-based capital ratios are calculated by dividing Tier 1 and total capital by
risk-weighted assets. Assets and off-balance sheet exposures are assigned to one
of four categories of risk-weights, based primarily on relative credit risk. The
minimum Tier 1 capital ratio is 4% and the minimum total capital ratio is 8%.
The Corporation's Tier 1 and total risk-based capital ratios under these
guidelines at September 30, 1996 were 7.05% and 12.05%, respectively.
The leverage ratio is determined by dividing Tier 1 capital by adjusted
average total assets. Although the stated minimum ratio is 3%, most banking
organizations are required to maintain ratios of at least 100 to 200 basis
points above 3%. The Corporation's leverage ratio at September 30, 1996 was
6.30%. Management believes that NationsBank meets its leverage ratio
requirement.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for insured
depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal regulatory agencies to
implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Failure to meet the capital guidelines could
also subject a banking institution to capital raising requirements. An
"undercapitalized" bank must develop a capital restoration plan and its
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parent holding company must guarantee that bank's compliance with the plan. The
liability of the parent holding company under any such guarantee is limited to
the lesser of 5% of the bank's assets at the time it became "undercapitalized"
or the amount needed to comply with the plan. Furthermore, in the event of the
bankruptcy of the parent holding company, such guarantee would take priority
over the parent's general unsecured creditors. In addition, FDICIA requires the
various regulatory agencies to prescribe certain non-capital standards for
safety and soundness relating generally to operations and management, asset
quality and executive compensation and permits regulatory action against a
financial institution that does not meet such standards.
The various regulatory agencies have adopted substantially similar
regulations that define the five capital categories identified by FDICIA, using
the total risk-based capital, Tier 1 risk-based capital and leverage capital
ratios as the relevant capital measures. Such regulations establish various
degrees of corrective action to be taken when an institution is considered
undercapitalized. Under the regulations, a "well capitalized" institution must
have a Tier 1 capital ratio of at least 6%, a total capital ratio of at least
10% and a leverage ratio of at least 5% and not be subject to a capital
directive order. An "adequately capitalized" institution must have a Tier 1
capital ratio of at least 4%, a total capital ratio of at least 8% and a
leverage ratio of at least 4%, or 3% in some cases. Under these guidelines, as
of September 30, 1996, each of the Banks was considered well capitalized.
Banking agencies have recently adopted final regulations which mandate that
regulators take into consideration concentrations of credit risk and risks from
non-traditional activities, as well as an institution's ability to manage those
risks, when determining the adequacy of an institution's capital. This
evaluation will be made as a part of the institution's regular safety and
soundness examination. Banking agencies also have recently adopted final
regulations requiring regulators to consider interest rate risk (when the
interest rate sensitivity of an institution's assets does not match the
sensitivity of its liabilities or its off-balance-sheet position) in the
evaluation of a bank's capital adequacy. Concurrently, banking agencies have
proposed a methodology for evaluating interest rate risk. After gaining
experience with the proposed measurement process, these banking agencies intend
to propose further regulations to establish an explicit risk-based capital
charge for interest rate risk.
DISTRIBUTIONS. The Corporation's funds for cash distributions to its
shareholders are derived from a variety of sources, including cash and temporary
investments. The primary source of such funds, however, is dividends received
from the Banks. The amount of dividends that each Bank may declare in a calendar
year without approval of the Comptroller is the Bank's net profits for that
year, as defined by statute, combined with its net retained profits, as defined,
for the preceding two years. In addition, from time to time NationsBank applies
for, and may receive, permission from the Comptroller for one or more of the
Banks to declare special dividends. As of January 1, 1996, the Banks can
initiate dividend payments without prior regulatory approval of up to $905
million plus an additional amount equal to their net profits for 1996 up to the
date of any such dividend declaration.
In addition to the foregoing, the ability of NationsBank and the Banks to
pay dividends may be affected by the various minimum capital requirements and
the capital and non-capital standards established under FDICIA as described
above. Furthermore, the Comptroller may prohibit the payment of a dividend by a
national bank if it determines that such payment would constitute an unsafe or
unsound practice. The right of NationsBank, its shareholders and its creditors
to participate in any distribution of the assets or earnings of its subsidiaries
is further subject to the prior claims of creditors of the respective
subsidiaries.
SOURCE OF STRENGTH. According to Federal Reserve Board policy, bank holding
companies are expected to act as a source of financial strength to each
subsidiary bank and to commit resources to support each such subsidiary. This
support may be required at times when a bank holding company may not be able to
provide such support. In the event of a loss suffered or anticipated by the
FDIC -- either as a result of default of a banking or thrift subsidiary of
NationsBank or related to FDIC assistance provided to a subsidiary in danger of
default -- the other Banks may be assessed for the FDIC's loss, subject to
certain exceptions.
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THE TRUSTS
Each of the NB Capital Trusts is a statutory business trust formed under
Delaware law pursuant to (i) a separate declaration of trust executed by the
Corporation, as sponsor for such trust (the "Sponsor") and the NB Trustees (as
defined herein) for such trust and (ii) the filing of a separate certificate of
trust with the Delaware Secretary of State. The declarations of trust with
respect to each of the NB Capital Trusts have identical terms (except with
respect to the name of the NB Capital Trust to which it relates) and each is
referred to as a "Declaration". Each NB Capital Trust exists for the exclusive
purposes of (i) issuing the Preferred Securities and common securities
representing undivided beneficial interests in the assets of such Trust (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) investing the gross proceeds from the sale of the Trust
Securities in the purchase of Junior Subordinated Notes, and (iii) engaging in
only those other activities necessary or incidental thereto. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Preferred Securities except that upon an event of default under the
Declaration with respect thereto, 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. The Corporation will, directly or indirectly, purchase
and own all of the Common Securities of each NB Capital Trust, which will
represent an aggregate liquidation amount equal to at least 3 percent of the
total capital of each NB Capital Trust. Each NB Capital Trust has a term of
approximately 55 years, but may earlier terminate as provided in the
Declaration. Each NB Capital Trust's business and affairs will be conducted by
the trustees (the "NB Trustees") appointed by the Corporation, as the direct or
indirect holder of all the Common Securities. The holder of the Common
Securities will be entitled to appoint, remove or replace any of, or increase or
reduce the number of, the NB Trustees of a NB Capital Trust. The duties and
obligations of the NB Trustees shall be governed by the Declaration of such NB
Capital Trust. One or more of the NB Trustees (the "Regular Trustees") of each
NB Capital Trust will be persons who are employees or officers of or who are
otherwise affiliated with the Corporation. One NB Trustee of each NB Capital
Trust will be a financial institution which will be unaffiliated with the
Corporation and which shall act as property trustee under the Declaration and as
indenture trustee (the "Property Trustee") for purposes of compliance with the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), pursuant to
the terms set forth in a Prospectus Supplement. The Property Trustee will hold
title to the Junior Subordinated Notes for the benefit of the holders of the
Trust Securities and will have the power to exercise all rights, power and
privileges under the Indenture as the holder of the Junior Subordinated Notes.
In addition, the Property Trustee will maintain exclusive control of a
segregated non-interest bearing bank account (the "Property Account") to hold
all payments made in respect of the Junior Subordinated Notes for the benefit of
the holders of Trust Securities. The Property Trustee will make payments of
distributions and payments on liquidation, redemption or otherwise to the
holders of the Trust Securities out of funds from the Property Account. In
addition, unless the Property Trustee maintains a principal place of business in
the State of Delaware, and otherwise meets the requirements of applicable law,
one NB Trustee of each NB Capital Trust will have its principal place of
business or reside in the State of Delaware (the "Delaware Trustee"). The
Corporation will pay all fees and expenses related to the NB Capital Trusts and
the offering of Trust Securities. The office of the Delaware Trustee for each NB
Capital Trust in the State of Delaware is The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711. The principal place of business
of each NB Capital Trust shall be c/o NationsBank Corporation, Corporate
Treasury Division, NationsBank Corporate Center, Charlotte, North Carolina
28255.
USE OF PROCEEDS
Each NB Capital Trust will use the gross proceeds received from the sale of
the Preferred Securities to purchase Junior Subordinated Notes from NationsBank.
NationsBank intends to add the net proceeds from the sale of the Junior
Subordinated Notes to its general funds, to be used for general corporate
purposes, including the Corporation's working capital needs, the funding of
investments in, or extensions of credit to, its banking and nonbanking
subsidiaries, possible acquisitions of other financial institutions or their
assets or liabilities, possible acquisitions of or investments in other
businesses of a type eligible for bank holding companies and possible reduction
of outstanding indebtedness or repurchase of outstanding equity securities of
the Corporation. Pending such use, the Corporation may temporarily invest the
net proceeds in investment grade securities. The Corporation may, from time to
time, engage in additional capital financings of a character and
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in amounts to be determined by the Corporation in light of its needs at such
time or times and in light of prevailing market conditions. If the Corporation
elects at the time of issuance of Junior Subordinated Notes to make different or
more specific use of proceeds other than that set forth herein, such use will be
described in the applicable Prospectus Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the Corporation's consolidated ratios of earnings to
fixed charges and ratios of earnings to combined fixed charges and preferred
stock dividend requirements for the nine months ended September 30, 1996 and for
each of the years in the five-year period ended December 31, 1995:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits...................................... 1.8 1.7 1.9 2.3 2.4 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends:
Excluding interest on deposits...................................... 1.8 1.6 1.8 2.3 2.3 1.1
Including interest on deposits...................................... 1.5 1.4 1.5 1.5 1.4 1.0
</TABLE>
For purposes of computing the consolidated ratios, earnings represent net
income of the Corporation plus applicable income taxes and fixed charges, less
capitalized interest and the equity in undistributed earnings of unconsolidated
subsidiaries and associated companies. Fixed charges represent interest expense
(exclusive of interest on deposits in one case and inclusive of such interest in
the other), capitalized interest, amortization of debt discount and appropriate
issuance costs and one-third (the amount deemed to represent an appropriate
interest factor) of net rent expense under all lease commitments. Preferred
stock dividend requirements represent dividend requirements on the outstanding
preferred stock adjusted to reflect the pre-tax earnings that would be required
to cover such dividend requirements.
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PLAN OF DISTRIBUTION
NationsBank may sell the Junior Subordinated Notes and any NB Capital Trust
may sell Preferred Securities in any of, or any combination of, the following
ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters, and (iv) through dealers.
Offers to purchase Offered Securities may be solicited directly by
NationsBank and/or any NB Capital Trust, as the case may be, or by agents
designated by NationsBank and/or any NB Capital Trust, as the case may be, from
time to time. Any such agent, who may be deemed to be an underwriter as that
term is defined in the Securities Act, involved in the offer or sale of the
Offered Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by NationsBank to such agent will be set
forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agency will be acting in a best efforts basis
for the period of its appointment (ordinarily five business days or less).
Agents, dealers and underwriters may be customers of, engage in transactions
with, or perform services for the Corporation in the ordinary course of
business.
If an underwriter or underwriters are utilized in the sale of the Offered
Securities, NationsBank and/or the NB Capital Trust as to which such Offered
Securities relate, will execute an underwriting agreement with such underwriters
at the time of sale to them and the names of the underwriters and the terms of
the transaction will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make releases of the Offered Securities in respect
of which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, NationsBank and/or any NB Capital Trust, as
the case may be, will sell such Offered Securities to the dealer, as principal.
The dealer may then resell such Offered Securities to the public at varying
prices to be determined by such dealer at the time of resale. The name of the
dealer and the terms of the transaction will be set forth in the Prospectus
Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by NationsBank and/or any NB Capital Trust, as the
case may be, against certain liabilities, including liabilities under the
Securities Act.
The place and time of delivery for the Offered Securities in respect of
which this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
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DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
THE FOLLOWING DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES SETS FORTH
CERTAIN GENERAL TERMS AND PROVISIONS OF THE JUNIOR SUBORDINATED NOTES TO WHICH
ANY PROSPECTUS SUPPLEMENT MAY RELATE. THE PARTICULAR TERMS OF THE JUNIOR
SUBORDINATED NOTES OFFERED BY ANY PROSPECTUS SUPPLEMENT AND THE EXTENT, IF ANY,
TO WHICH SUCH GENERAL PROVISIONS MAY APPLY TO THE JUNIOR SUBORDINATED NOTES SO
OFFERED WILL BE DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATING TO SUCH JUNIOR
SUBORDINATED NOTES.
Junior Subordinated Notes may be issued from time to time in one or more
series under an Indenture (the "Indenture"), between the Corporation and The
Bank of New York, as Trustee (in such capacity, the "Debt Trustee"). The
Indenture is incorporated by reference in the Registration Statement of which
this Prospectus forms a part. The terms of the Junior Subordinated Notes will
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The following summary of certain
provisions of the Indenture does not purport to be complete and is subject in
all respects to the provisions of, and is qualified in its entirety by reference
to, the Indenture, and the Trust Indenture Act. Unless otherwise indicated
capitalized terms shall have the meanings ascribed to them in the Indenture.
GENERAL
The Junior Subordinated Notes will be unsecured, subordinated obligations
of the Corporation. The Indenture does not limit the aggregate principal amount
of Junior Subordinated Notes which may be issued thereunder and provides that
the Junior Subordinated Notes may be issued from time to time in one or more
series. The Subordinated Notes are issuable in one or more series pursuant to an
indenture supplemental to the Indenture or a resolution of the Corporation's
Board of Directors or a special committee appointed thereby (each, a
"Supplemental Indenture").
In the event Junior Subordinated Notes are issued to a NB Capital Trust or
a trustee of such trust in connection with the issuance of Trust Securities by
such NB Capital Trust, such Junior Subordinated Notes subsequently may be
distributed pro rata to the holders of such Trust Securities in connection with
the dissolution of such NB Capital Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Junior Subordinated Notes will be issued to a NB Capital Trust or
a trustee of such trust in connection with the issuance of Trust Securities by
such NB Capital Trust.
Reference is made to the Prospectus Supplement relating to the particular
Junior Subordinated Notes being offered thereby for the following terms: (i) the
designation of such Junior Subordinated Notes; (ii) the aggregate principal
amount of such Junior Subordinated Notes; (iii) the percentage of their
principal amount at which such Junior Subordinated Notes will be issued; (iv)
the date or dates on which such Junior Subordinated Notes will mature and the
right, if any, to extend such date or dates; (v) the rate or rates, if any, per
annum, at which such Junior Subordinated Notes will bear interest, or the method
of determination of such rate or rates; (vi) the date or dates from which such
interest shall accrue, the interest payment dates on which such interest will be
payable or the manner of determination of such interest payment dates and the
record dates for the determination of holders to whom interest is payable on any
such interest payment dates; (vii) the right to extend the interest payment
periods and the duration of such extension; (viii) provisions for a sinking
purchase or other analogous fund, if any; (ix) the period or periods, if any,
within which, the price or prices of which, and the terms and conditions upon
which such Subordinated Notes may be redeemed, in whole or in part, at the
option of the Corporation or the holder; (x) the form of such Junior
Subordinated Notes; and (xi) any other specific terms of the Junior Subordinated
Notes. Principal, premium, if any, and interest, if any, will be payable, and
the Junior Subordinated Notes offered hereby will be transferable, at the
corporate trust office of the Debt Trustee in New York, New York, provided that
payment of interest, if any, may be made at the option of the Corporation by
check mailed to the address of the person entitled thereto as it appears in the
Security Register.
The ability of NationsBank to make payments of principal of (and premium,
if any, on) and any interest on the Junior Subordinated Notes may be affected by
the ability of the Banks to pay dividends. The ability of the Banks, as well as
of the Corporation, to pay dividends in the future currently is, and could be
further, influenced by bank regulatory requirements and capital guidelines. See
"NATIONSBANK CORPORATION -- Supervision and Regulation."
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The covenants contained in the Indenture would not necessarily afford
protection to holders of the Junior Subordinated Notes in the event of a decline
in credit quality resulting from takeovers, recapitalization or similar
restructuring.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Notes will be issued in fully registered form without
coupons and in denominations of $1,000 and multiples of $1,000. No service
charge will be made for any transfer or exchange of the Junior Subordinated
Notes, but the Corporation or the Debt Trustee may require payment of a sum
sufficient to cover any tax or other government charge payable in connection
therewith.
Unless otherwise provided in the applicable Prospectus Supplement,
principal and premium, if any, or interest, if any, will be payable and the
Junior Subordinated Notes may be surrendered for payment or transferred at the
offices of the Debt Trustee as paying and authenticating agent, provided that
payment of interest on registered securities that are not issued to a NB Capital
Trust may be made at the option of the Corporation by check mailed to the
address of the person entitled thereto as it appears in the Security Register.
BOOK-ENTRY JUNIOR SUBORDINATED NOTES
The Junior Subordinated Notes of a series may be issued in whole or in part
in the form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Global Depositary"), or its nominee, identified in
the Prospectus Supplement relating to such series. In such case, one or more
Global Securities will be issued in a denomination or aggregate denomination
equal to the portion of the aggregate principal amount of Outstanding Junior
Subordinated Notes of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for Junior
Subordinated Notes in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Global Depositary
for such Global Security to a nominee for such Global Depositary and except in
the circumstances described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Subordinated Notes to be represented by a Global Security
and a description of the Global Depositary will be provided in the applicable
Prospectus Supplement.
SUBORDINATION
The Junior Subordinated Notes will be subordinated and junior in right of
payment to other indebtedness of the Corporation to the extent set forth in the
applicable Prospectus Supplement.
CERTAIN COVENANTS OF THE CORPORATION
If Junior Subordinated Notes are issued to a NB Capital Trust or a trustee
of such trust in connection with the issuance of Trust Securities by such NB
Capital Trust and (i) there shall have occurred any event that would constitute
an Event of Default (as defined herein) or (ii) the Corporation shall be in
default with respect to its payment of any obligations under the related
Preferred Securities Guarantee or Common Securities Guarantee, or (iii) the
Corporation shall have given notice to its election to defer payments of
interest on such Junior Subordinated Notes by extending the interest payment
period as provided in the Indenture and such period, or any extension thereof,
shall be continuing, then (a) the Corporation shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of NationsBank Common Stock in connection
with the satisfaction by NationsBank of its obligations under any employee
benefit plans, (ii) as a result of a reclassification of NationsBank capital
stock or the exchange or conversion of one class or series of NationsBank
capital stock for another class or series of NationsBank capital stock or (iii)
the purchase of fractional interests in shares of NationsBank capital stock
pursuant to an acquisition or the conversion or exchange provisions of such
NationsBank capital stock or the security being converted or exchanged
("Permitted Purchases/Exchanges")) or make any guarantee payments with respect
to the foregoing and (b) the Corporation shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem
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any debt securities (including guarantees) issued by the Corporation which rank
pari passu with or junior to such Junior Subordinated Notes.
If Junior Subordinated Notes are issued to a NB Capital Trust or a trustee
of such trust in connection with the issuance of Trust Securities by such NB
Capital Trust, for so long as such Trust Securities remain outstanding, the
Corporation will covenant (i) to directly or indirectly maintain 100 percent
ownership of the Common Securities of such NB Capital Trust; provided, however,
that any permitted successor of the Corporation under the Indenture may succeed
to the Corporation's ownership of such Common Securities, (ii) to use its
reasonable efforts to cause such NB Capital Trust (a) to remain a statutory
business trust, except in connection with the distribution of Junior
Subordinated Notes to the holders of Trust Securities in liquidation of such NB
Capital Trust, the redemption of all of the Trust Securities of such NB Capital
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration of such NB Capital Trust, and (b) to otherwise continue not to
be classified as an association taxable as a corporation or partnership for
United States federal income tax purposes and (iii) to use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
undivided beneficial interest in the Junior Subordinated Notes.
LIMITATION ON MERGERS AND SALES OF ASSETS
The Corporation shall not consolidate with, or merge into, any corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person unless (a) the successor entity shall be a corporation organized
under the laws of the United States or any State or the District of Columbia and
shall expressly assume the obligations of the Corporation under the Indenture
and the Preferred Securities Guarantees and (b) after giving effect thereto, no
Default shall have occurred and be continuing under the Indenture.
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Indenture provides that any one or more of the following described
events which has occurred and is continuing constitutes an "Event of Default"
with respect to each series of Junior Subordinated Notes:
(a) certain events of bankruptcy, insolvency or reorganization of the
Corporation; or
(b) in the event Junior Subordinated Notes are issued to a NB Capital Trust
or a trustee of such trust in connection with the issuance of Trust Securities
by such NB Capital Trust, the voluntary or involuntary dissolution, winding-up
or termination of such NB Capital Trust, except in connection with the
distribution of Junior Subordinated Notes to the holders of Trust Securities in
liquidation of such NB Capital Trust, the redemption of all of the Trust
Securities of such NB Capital Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such NB Capital Trust.
The Indenture provides that the Debt Trustee may withhold notice of an
Indenture Event of Default to the holders of a series of Subordinated Notes
(except in payment of principal or of interest or premium on the Junior
Subordinated Notes) if the Trustee considers it in the interest of such holders
to do so.
The Indenture provides that, if an Indenture Event of Default on any series
of Junior Subordinated Notes shall have occurred and be continuing, either the
Debt Trustee or the holders of 25 percent in principal amount of the Junior
Subordinated Notes of such series then outstanding may declare the principal
(or, if the Junior Subordinated Notes of such series, are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all Junior Subordinated Notes to be due and payable
immediately. The holders or a majority in aggregate outstanding principal amount
of such series of Junior Subordinated Notes may annul such declaration and waive
the default if the default, other than default in payment of the principal of,
or interest or premiums on, such series of Junior Subordinated Notes.
The holders of a majority in principal amount of the Subordinated Notes of
any and all series affected and then outstanding shall 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, provided that the holders of the Junior
Subordinated Notes shall have offered to the Debt Trustee reasonable indemnity
against expenses and liabilities. Notwithstanding the foregoing, subject to the
subordination provisions set forth in a Prospectus Supplement, the right of any
holder of Junior Subordinated Notes to receive payment of the principal of and
interest on such Junior Subordinated Notes on or after the due dates therefor,
as the same may be extended in accordance with the terms of such Junior
Subordinated Notes, or to institute suit for the enforcement of any such payment
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provisions, shall not be impaired or affected without the consent of such
holder. If the Junior Subordinated Notes are issued to a NB Capital Trust, the
same rights with respect to the Junior Subordinated Notes will extend to the
holders of the Preferred Securities issued by such Trust. The Indenture requires
the annual filing by the Company with the Debt Trustee of a certificate as to
the absence of certain defaults under the Indenture.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Corporation and the Debt
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Notes of all series affected by such
modification at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the holders of the Junior Subordinated
Notes; provided that no such modification shall (i) extend the fixed maturity of
any Security, or reduce the principal amount thereof (including in the case of a
discounted Security the amount payable thereon in the event of acceleration or
the amount provable in bankruptcy) or any redemption premium thereon, or reduce
the rate or extend the time of payment of interest thereon, or make the
principal of, or interest or premium on, the Junior Subordinated Notes payable
in any coin or currency other than that provided in the Subordinated Notes, or
impair or affect the right of any holder of Subordinated Notes to institute suit
for the payment thereof or the right of prepayment, if any, at the option of the
holder, without the consent of the holder of each Security so affected, or (ii)
reduce the aforesaid percentage of Subordinated Notes the consent of the holders
of which is required for any such modification without the consent of the
holders of each Security affected.
DEFEASANCE AND DISCHARGE
The Indenture provides that the Corporation (a) will be Discharged from any
and all obligations in respect of the Junior Subordinated Notes of a series
(except for certain obligations to register the transfer or exchange of Junior
Subordinated Notes, replace stolen, lost or mutilated Junior Subordinated Notes,
maintain paying agencies and hold moneys for payment in trust) or (b) need not
comply with certain restrictive covenants of the Indenture (including those
described under "Certain Covenants of the Corporation"), in each case if the
Corporation, at its option, deposits, in trust with the Debt Trustee or the
Defeasance Agent, money or U.S. Government Obligations which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money, in an amount sufficient to pay all the principal of, and interest
and premium, if any, on, the Junior Subordinated Notes of such series on the
dates such payments are due in accordance with the terms of such Junior
Subordinated Notes. To exercise any such option, the Corporation is required to
deliver to the Debt Trustee and the Defeasance Agent, if any, an opinion of
counsel to the effect that (i) the deposit and related defeasance would not
cause the holders of the Junior Subordinated Notes of such series to recognize
income, gain or loss for United States federal income tax purposes and, in the
case of a Discharge pursuant to clause (a), such opinion shall be accompanied by
a private letter ruling to that effect received by the Corporation from the
United States Internal Revenue Service or a revenue ruling pertaining to a
comparable form of transaction to that effect published by the United States
Internal Revenue Service, and (ii) if listed on any national securities
exchange, such Junior Subordinated Notes would not be delisted from such
exchange as a result of the exercise of such option.
GOVERNING LAW
The Indenture and the Junior Subordinated Notes will be governed by, and
construed in accordance with, the internal laws of the State of New York.
THE DEBT TRUSTEE
The Corporation and certain of its affiliates have from time to time
maintained deposit accounts and conducted other banking transactions with the
Debt Trustee and its affiliated entities in the ordinary course of business. The
Debt Trustee also serves as trustee for certain series of the Corporation's
outstanding indebtedness under other indentures.
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DESCRIPTION OF THE PREFERRED SECURITIES
Each NB Capital Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each NB Capital Trust authorizes the
Regular Trustees of that NB Capital Trust to issue on behalf of the NB Capital
Trust one series of Preferred Securities. The Declaration will be qualified as
an indenture under the Trust Indenture Act. The Bank of New York will act as
Indenture Trustee for the purposes of the Trust Indenture Act. The Preferred
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act and which will mirror the terms of the
Subordinated Notes held by that NB Capital Trust and described in the Prospectus
Supplement relating thereto. Reference is made to the Prospectus Supplement
relating to the Preferred Securities of the NB Capital Trust for specific terms,
including (i) the distinctive designation of such Preferred Securities; (ii) the
number of Preferred Securities issued by such NB Capital Trust; (iii) the annual
distribution rate (or method of determining such rate) for Preferred Securities
issued by such NB Capital Trust and the date or dates upon which such
distributions shall be payable; provided, however, that distributions on such
Preferred Securities shall be payable on a quarterly basis to holders of such
Preferred Securities as of a record date in each quarter during which such
Preferred Securities are outstanding; (iv) whether distributions on Preferred
Securities issued by such NB Capital Trust shall be cumulative, and, in the case
of Preferred Securities having cumulative distribution rights, the date or dates
or method of determining the date or dates from which distributions on Preferred
Securities issued by such NB Capital Trust shall be cumulative; (v) the amount
or amounts which shall be paid out of the assets of such NB Capital Trust to the
holders of Preferred Securities of such NB Capital Trust upon voluntary or
involuntary dissolution, winding-up or termination of such NB Capital Trust;
(vi) the obligation, if any, of such NB Capital Trust to purchase or redeem
Preferred Securities issued by such NB Capital Trust and the price or prices at
which, the period or periods within which, and the terms and conditions upon
which, Preferred Securities issued by such NB Capital Trust shall be purchased
or redeemed, in whole or in part, pursuant to such obligation; (vii) the voting
rights, if any, of Preferred Securities issued by such NB Capital Trust in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities, or of Preferred Securities issued by one or more NB Capital Trusts,
or of both, as a condition to specified action or amendments to the Declaration
of such NB Capital Trust; (viii) the terms and conditions, if any, upon which
the Junior Subordinated Notes may be distributed to holders of Preferred
Securities; (ix) if applicable, any securities exchange upon which the Preferred
Securities shall be listed; and (x) any other relevant rights, preferences,
privileges, limitations or restrictions of Preferred Securities issued by such
NB Capital Trust not inconsistent with the Declaration of such NB Capital Trust
or with applicable law. All Preferred Securities offered hereby will be
guaranteed by the Corporation to the extent set forth below under "Description
of the Preferred Securities Guarantees." Certain United States federal income
tax considerations applicable to any offering of Preferred Securities will be
described in the Prospectus Supplement relating thereto.
The Declaration of each NB Capital Trust authorizes its Regular Trustees to
issue on behalf of that NB Capital Trust one series of Common Securities having
such terms including distributions, redemption, voting, liquidation rights or
such restrictions as shall be set forth therein. Except for the voting rights
noted below, the terms of the Common Securities issued by a NB Capital Trust
will be substantially identical to the terms of the Preferred Securities issued
by that trust and the Common Securities will rank pari passu, and payments will
be made thereon pro rata, with the Preferred Securities except that, upon an
Event of Default under the Declaration, 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 certain limited circumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace any
of the NB Trustees of a NB Capital Trust. All of the Common Securities of each
NB Capital Trust will be directly or indirectly owned by the Corporation.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If an Event of Default under the Declaration of a NB Capital Trust occurs
and is continuing, then the holders of Preferred Securities of such NB Capital
Trust would rely on the enforcement by the Property Trustee of its rights as a
holder of the applicable series of Junior Subordinated Notes against the
Corporation. In
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addition, the holders of a majority in liquidation amount of the Preferred
Securities of such NB Capital Trust will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Property Trustee or to direct the exercise of any trust or power conferred upon
the Property Trustee under the applicable Declaration, including the right to
direct the Property Trustee to exercise the remedies available to it as a holder
of the Junior Subordinated Notes. If the Property Trustee fails to enforce its
rights under the applicable series of Junior Subordinated Notes, a holder of
Preferred Securities of such NB Capital Trust may, to the extent permitted by
applicable law, institute a legal proceeding directly against the Corporation to
enforce the Property Trustee's rights under the applicable series of
Subordinated Notes without first instituting any legal proceeding against the
Property Trustee or any other person or entity.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "Proposed Legislation") if such debt obligations have a maximum term
in excess of 20 years and are not shown as indebtedness on the issuer's
applicable consolidated balance sheet. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth, Jr. and House Ways and Means Committee
Chairman Bill Archer issued a joint statement (the "Joint Statement") indicating
their intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the views expressed in
the Joint Statement (the "Democrat Letters"). Based upon the Joint Statement and
the Democrat Letters, it is expected that if the Proposed Legislation were to be
enacted, such legislation would not apply to the Junior Subordinated Notes.
There can be no assurances, however, that the effective date guidance contained
in the Joint Statement and the Democrat Letters will be incorporated into the
Proposed Legislation, if enacted, or that other legislation enacted after the
date hereof will not otherwise adversely affect the ability of the Corporation
to deduct the interest payable on the Junior Subordinated Notes. Accordingly,
there can be no assurance that a Tax Event will not occur. See "Description of
the Preferred Securities -- Tax Event Redemption or Distribution."
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees which will be executed and delivered by NationsBank for
the benefit of the holders from time to time of Preferred Securities. Each
Preferred Securities Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Bank of New York will act as indenture trustee under each
Preferred Securities Guarantee for purposes of the Trust Indenture Act (the
"Preferred Guarantee Trustee"). The terms of each Preferred Securities Guarantee
will be those set forth in such Preferred Securities Guarantee and those made
part of such Preferred Securities Guarantee by the Trust Indenture Act. The
summary of the material terms of the Preferred Securities Guarantees does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the form of Preferred Securities
Guarantee, which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, and the Trust Indenture Act. Each Preferred
Securities Guarantee will be held by the Preferred Guarantee Trustee for the
benefit of the holders of the Preferred Securities of the applicable NB Capital
Trust.
GENERAL
Pursuant to each Preferred Securities Guarantee, the Corporation will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by a NB Capital
Trust, the Guarantee Payments (as defined herein) (except to the extent paid by
such NB Capital Trust), as and when due, regardless of any defense, right of
set-off or counterclaim which such NB Capital Trust may have or assert. The
following payments with respect to Preferred Securities issued by a NB Capital
Trust to the extent not paid by such NB Capital Trust (the "Guarantee
Payments"), will be subject to the Preferred Securities Guarantee thereon
(without duplication): (i) any accrued and unpaid distributions which are
required to be paid on such Preferred Securities, to the extent such NB Capital
Trust shall have funds
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available therefor; (ii) the redemption price, including all accrued and unpaid
distributions (the "Redemption Price"), to the extent such NB Capital Trust has
funds available therefor with respect to any Preferred Securities called for
redemption by such NB Capital Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of such NB Capital Trust (other than in
connection with the distribution of Junior Subordinated Notes to the holders of
Preferred Securities or the redemption of all of the Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on such Preferred Securities to the date of payment, to the extent
such NB Capital Trust has funds available therefor and (b) the amount of assets
of such NB Capital Trust remaining available for distribution to holders of such
Preferred Securities in liquidation of such NB Capital Trust. The redemption
price and liquidation amount will be fixed at the time the Preferred Securities
are issued. The Corporation's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Corporation to the
holders of Preferred Securities or by causing the applicable NB Capital Trust to
pay such amounts to such holders.
Each Preferred Securities Guarantee will not apply to any payment of
distributions except to the extent such NB Capital Trust shall have funds
available therefor. If the Corporation does not make interest payments on the
Junior Subordinated Notes purchased by a NB Capital Trust, such NB Capital Trust
will not pay distributions on the Preferred Securities issued by such NB Capital
Trust and will not have funds available therefor. See "Description of the Junior
Subordinated Notes -- Certain Covenants of the Corporation." The Preferred
Securities Guarantee, when taken together with the Corporation's obligations
under the Junior Subordinated Notes, the Indenture and the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of such
NB Capital Trust (other than with respect to the Trust Securities), will provide
a full and unconditional guarantee on a subordinated basis by the Corporation of
payments due on the Preferred Securities.
The Corporation has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the NB Capital Trusts with respect
to the Common Securities (the "Common Securities Guarantees") to the same extent
as the Preferred Securities Guarantees, except that upon an Event of Default
under the Indenture, holders of Preferred Securities shall have priority over
holders of Common Securities with respect to distributions and payments on
liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE CORPORATION
In each Preferred Securities Guarantee, the Corporation will covenant that,
so long as any Preferred Securities issued by the applicable NB Capital Trust
remain outstanding, if there shall have occurred any event that would constitute
an Event of Default under such Preferred Securities Guarantee or the Declaration
of such NB Capital Trust, then (a) the Corporation shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock (other than
Permitted Purchases/Exchanges) or make any guarantee payments with respect to
the foregoing, (b) the Corporation shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its Preferred Stock (other than
Permitted Purchases/Exchanges) except that the Corporation may meet the same
proportion of its payment obligations with respect to its Preferred Stock that
it meets under such Preferred Securities Guarantee and (c) the Corporation shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Corporation which rank pari passu with or junior to such Junior Subordinated
Notes.
MODIFICATION OF THE PREFERRED SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
each Preferred Securities Guarantee may be amended only with the prior approval
of the holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities issued by the applicable NB Capital Trust. The
manner of obtaining any such approval of holders of such Preferred Securities
will be as set forth in an accompanying Prospectus Supplement. All guarantees
and agreements contained in a Preferred Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Corporation
and shall inure to the benefit of the holders of the Preferred Securities of the
applicable NB Capital Trust then outstanding.
17
<PAGE>
<PAGE>
TERMINATION
Each Preferred Securities Guarantee will terminate as to the Preferred
Securities issued by the applicable NB Capital Trust (a) upon full payment of
the Redemption Price of all Preferred Securities of such NB Capital Trust, (b)
upon distribution of the Junior Subordinated Notes held by such NB Capital Trust
to the holders of the Preferred Securities of such NB Capital Trust or (c) upon
full payment of the amounts payable in accordance with the Declaration of such
NB Capital Trust upon liquidation of such NB Capital Trust. Each Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of Preferred Securities issued by the
applicable NB Capital Trust must restore payment of any sums paid under such
Preferred Securities or such Preferred Securities Guarantee.
EVENTS OF DEFAULT
An Event of Default under a Preferred Securities Guarantee will occur upon
the failure of the Corporation to perform any of its payment or other
obligations thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
relating to such Preferred Securities Guarantee 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 the Preferred Securities Guarantee
or to direct the exercise of any trust or power conferred upon the Preferred
Guarantee Trustee under such Preferred Securities. Any holder of Preferred
Securities relating to such Preferred Securities Guarantee may institute a legal
proceeding directly against the Corporation to enforce the Preferred Guarantee
Trustee's rights under such Preferred Securities Guarantee, without first
instituting a legal proceeding against the relevant NB Capital Trust, the
Preferred Guarantee Trustee or any other person or entity. Notwithstanding the
foregoing, if the Corporation has failed to make a guarantee payment, a holder
of Preferred Securities may directly institute a proceeding against the
Corporation for enforcement of the Preferred Securities Guarantee for such
payment. The Corporation waives any right or remedy to require that any action
be brought first against such NB Capital Trust or any other person or entity
before proceeding directly against the Corporation.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Preferred Securities Guarantees will constitute unsecured obligations
of the Corporation and will rank (i) subordinate and junior in right of payment
to all other liabilities, including contingent liabilities, of the Corporation,
(ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by the Corporation and with any guarantee now or hereafter
entered into by NationsBank in respect of any preferred or preference stock of
any affiliate of the Corporation, and (iii) senior to the Corporation's common
stock. The terms of the Preferred Securities provide that each holder of
Preferred Securities issued by the applicable NB Capital Trust by acceptance
thereof agrees to the subordination provisions and other terms of the Preferred
Securities Guarantee relating thereto.
The Preferred Securities Guarantees will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default with
respect to a Preferred Securities Guarantee, undertakes to perform only such
duties as are specifically set forth in such Preferred Securities Guarantee and,
after default, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the Preferred Guarantee Trustee is under no obligation to exercise
any of the powers vested in it by a Preferred Securities Guarantee at the
request of any holder of Preferred Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby.
The Corporation and certain of its affiliates have from time to time
maintained deposit accounts and conducted other banking transactions with the
Preferred Guarantee Trustee and its afifiliated entities in the ordinary course
of business. The Preferred Guarantee Trustee also serves as trustee for certain
series of the Corporation's outstanding indebtedness under other indentures.
18
<PAGE>
<PAGE>
GOVERNING LAW
The Preferred Securities Guarantees will be governed by and construed in
accordance with, the internal laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED NOTES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of each of the NB Capital
Trusts is to issue the Trust Securities evidencing undivided beneficial
interests in the assets of each of the NB Capital Trusts, and to invest the
proceeds from such issuance and sale in Junior Subordinated Notes.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Notes held by a NB Capital Trust, such payments will be
sufficient to cover distributions and payments due on the Trust Securities
because of the following factors: (i) the aggregate principal amount of such
Junior Subordinated Notes will be equal to the sum of the aggregate stated
liquidation amount of the Trust Securities; (ii) the interest rate and the
interest and other payment dates on such Subordinated Notes will match the
distribution rate and distribution and other payment dates for the Preferred
Securities; (iii) NationsBank shall pay all, and the NB Capital Trust shall not
be obligated to pay, directly or indirectly, all costs, expenses, debt, and
obligations of such NB Capital Trust (other than with respect to the Trust
Securities); and (iv) the Declaration further provides that the NationsBank
Trustees shall not take or cause or permit the NB Capital Trust to, among other
things, engage in any activity that is not consistent with the purposes of such
NB Capital Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by NationsBank as and to the extent set forth under
"Description of the Preferred Securities Guarantees." If NationsBank does not
make interest payments on the Subordinated Notes purchased by the applicable NB
Capital Trust, the applicable NB Capital Trust will not have sufficient funds to
pay distributions on the Preferred Securities. The Preferred Securities
Guarantee does not apply to any payment of distributions unless and until the
applicable NB Capital Trust has sufficient funds for the payment of such
distributions. The Preferred Securities Guarantee covers the payment of
distributions and other payments on the Preferred Securities only if and to the
extent that NationsBank has made a payment of interest or principal on the
Junior Subordinated Notes held by the applicable NB Capital Trust as its sole
asset. The Preferred Securities Guarantee, when taken together with the
Corporation's obligations under the Junior Subordinated Notes and the Indenture
and its obligations under the Declaration, including its obligations to pay
costs, expenses, debts and liabilities of the applicable NB Capital Trust (other
than with respect to the Trust Securities), provide a full and unconditional
guarantee, on a subordinated basis, by the Corporation of amounts due on the
Preferred Securities.
If NationsBank fails to make interest or other payments on the Junior
Subordinated Notes when due (taking account of any Extension Period), the
Declarations provide a mechanism whereby the holders of the Preferred Securities
affected thereby, using the procedures described in any accompanying Prospectus
Supplement, may direct the Property Trustee to enforce its rights under the
Junior Subordinated Notes. If the Property Trustee fails to enforce its rights
under the Junior Subordinated Notes, a holder of Preferred Securities of a Trust
may, to the extent permitted by applicable law, institute a legal proceeding
against NationsBank to enforce the Property Trustee's rights under the
Subordinated Notes owned by such Trust without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
NationsBank, under the Guarantee, acknowledges that the Guarantee Trustee shall
enforce the Preferred Securities Guarantee on behalf of the holders of the
Preferred Securities. If NationsBank fails to make payments under the Preferred
Securities Guarantee, the Preferred Securities Guarantee provides a mechanism
whereby the holders of the Preferred Securities may direct the Preferred
Securities Guarantee Trustee to enforce its rights thereunder. Any holder of
Preferred Securities may institute a legal proceeding directly against
NationsBank to enforce the Preferred Securities Guarantee Trustee's rights under
the Preferred Securities Guarantee without first instituting a legal proceeding
against the applicable NB Capital Trust, the Preferred Securities Guarantee
Trustee, or any other person or entity.
19
<PAGE>
<PAGE>
NationsBank and each of the NB Capital Trusts believe that the above
mechanisms and obligations, taken together, provide a full and unconditional
guarantee by NationsBank of payments due on the Preferred Securities. See
"Description of the Preferred Securities Guarantees -- General."
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon on behalf of the NB Capital Trusts by Richards,
Layton & Finger, special Delaware counsel to the NB Capital Trusts. The validity
of the Junior Subordinated Notes and the Preferred Securities Guarantees and
certain matters relating thereto will be passed upon for NationsBank by Smith
Helms Mulliss & Moore, L.L.P. and for the underwriters by Stroock & Stroock &
Lavan. Certain United States federal income taxation matters will be passed upon
for NationsBank and the NB Capital Trusts by Stroock & Stroock & Lavan, special
tax counsel to NationsBank and the NB Capital Trusts. Smith Helms Mulliss &
Moore, L.L.P. and Stroock & Stroock & Lavan will rely on the opinion of
Richards, Layton & Finger as to matters of Delaware law.
EXPERTS
The consolidated financial statements of the Corporation incorporated in
this Prospectus by reference to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1995, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
20
<PAGE>
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY NATIONSBANK CORPORATION, NB CAPITAL TRUST I OR
THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF NATIONSBANK CORPORATION, NB CAPITAL TRUST I SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
NationsBank Corporation............................... S-4
NB Capital Trust...................................... S-4
NationsBank Corporation Selected Financial Data....... S-5
Recent Developments................................... S-6
Risk Factors.......................................... S-6
Capitalization........................................ S-11
Ratios of Earnings to Fixed Charges................... S-13
Accounting Treatment.................................. S-13
Use of Proceeds....................................... S-13
Description of the Preferred Securities............... S-13
Description of the Preferred Securities Guarantee..... S-23
Description of the Junior Subordinated Notes.......... S-23
Effect of Obligations Under the Junior Subordinated
Notes and the Preferred Securities Guarantee........ S-29
United States Federal Income Taxation................. S-30
Underwriting.......................................... S-33
Legal Matters......................................... S-34
<CAPTION>
PROSPECTUS
<S> <C>
Incorporation of Certain Documents by Reference....... 3
Available Information................................. 3
NationsBank Corporation............................... 4
The Trusts............................................ 8
Use of Proceeds....................................... 8
Ratios of Earnings to Fixed Charges................... 9
Plan of Distribution.................................. 10
Description of the Junior Subordinated Notes.......... 11
Description of the Preferred Securities............... 15
Description of the Preferred Securities Guarantees.... 16
Effect of Obligations Under the Junior Subordinated
Notes and the Guarantee............................. 19
Legal Matters......................................... 20
Experts............................................... 20
</TABLE>
PREFERRED SECURITIES
NB CAPITAL TRUST I
% TRUST ORIGINATED
PREFERRED SECURITIES(SM)
("TOPRS(SM)")
FULLY AND UNCONDITIONALLY
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY
NATIONSBANK(Register mark)
PROSPECTUS SUPPLEMENT
MERRILL LYNCH & CO.
, 1996
<PAGE>
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses, other than underwriting or broker-dealer fees,
discounts and commissions, in connection with the offering are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee..................... $ *
Printing and Engraving Expenses..................... *
Legal Fees and Expenses............................. *
Accounting Fees and Expenses........................ *
Blue Sky Fees and Expenses.......................... *
Indenture Trustee Expenses.......................... *
Rating Agency Fees and Expenses..................... *
Listing Fees........................................ *
Miscellaneous....................................... *
$ *
</TABLE>
* To be filed by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There are no provisions in the Corporation's Restated Articles of
Incorporation, and no contracts between the Corporation and its directors and
officers, relating to indemnification. The Corporation's Restated Articles of
Incorporation prevent the recovery by the Corporation of monetary damages
against its directors. However, in accordance with the provisions of the North
Carolina Business Corporation Act (the "Act"), the Corporation's Amended and
Restated Bylaws provide that, in addition to the indemnification of directors
and officers otherwise provided by the Act, the Corporation shall, under certain
circumstances, indemnify its directors, executive officers and certain other
designated officers against any and all liability and litigation expense,
including reasonable attorneys' fees, arising out of their status or activities
as directors and officers, except for liability or litigation expense incurred
on account of activities that were at the time known or reasonably should have
been known by such director or officer to be clearly in conflict with the best
interests of the Corporation. Pursuant to such bylaw and as authorized by
statute, the Corporation maintains insurance on behalf of its directors and
officers against liability asserted against such persons in such capacity
whether or not such directors or officers have the right to indemnification
pursuant to the bylaw or otherwise.
In addition to the above-described provisions, Sections 55-8-50 through
55-8-58 of the Act contain provisions prescribing the extent to which directors
and officers shall or may be indemnified. Section 55-8-51 of the Act permits a
corporation, with certain exceptions, to indemnify a current or former director
against liability if (i) he conducted himself in good faith, (ii) he reasonably
believed (x) that his conduct in his official capacity with the corporation was
in its best interests and (y) in all other cases his conduct was at least not
opposed to the corporation's best interests, and (iii) in the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. A corporation may not indemnify a current or former director in
connection with a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation or in connection with a
proceeding charging improper personal benefit to him in which he was adjudged
liable on such basis. The above standard of conduct is determined by the Board
of Directors or a committee thereof or special legal counsel or the shareholders
as prescribed in Section 55-8-55.
Sections 55-8-52 and 55-8-56 of the Act require a corporation to indemnify
a director or officer in the defense of any proceeding to which he was a party
because of his capacity as a director or officer against reasonable expenses
when he is wholly successful in his defense, unless the articles of
incorporation provide otherwise. Upon application, the court may order
indemnification of the director or officer if he is adjudged fairly and
reasonably so entitled under Section 55-8-54. Section 55-8-56 allows a
corporation to indemnify and advance expenses to an officer, employee or agent
who is not a director to the same extent as a director or as otherwise set forth
in the Corporation's articles of incorporation or bylaws or by resolution of the
Board of Directors.
In addition, Section 55-8-57 permits a corporation to provide for
indemnification of directors, officers, employees or agents, in its articles of
incorporation or bylaws or by contract or resolution, against liability in
various proceedings and to purchase and maintain insurance policies on behalf of
these individuals.
II-1
<PAGE>
<PAGE>
THE FOREGOING IS ONLY A GENERAL SUMMARY OF CERTAIN ASPECTS OF NORTH
CAROLINA LAW DEALING WITH INDEMNIFICATION OF DIRECTORS AND OFFICERS AND DOES NOT
PURPORT TO BE COMPLETE. IT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
RELEVANT STATUTES WHICH CONTAIN DETAILED SPECIFIC PROVISIONS REGARDING THE
CIRCUMSTANCES UNDER WHICH AND THE PERSON FOR WHOSE BENEFIT INDEMNIFICATION SHALL
OR MAY BE MADE AND ACCORDINGLY ARE INCORPORATED HEREIN BY REFERENCE.
The Declarations of Trust of NB Capital Trust I, NB Capital Trust II, and
NB Capital Trust III (each a "Trust" and together the "Trusts") provide that to
the fullest extent permitted by applicable law, the Sponsor shall indemnify and
hold harmless each of the Regular Trustees of the respective Trust, any
Affiliate of any such Regular Trustee, any officer, director, shareholder,
member, partner, employee, representative or agent of any such Regular Trustee,
or any employee or agent of the Trust or its Affiliates (each a "Company
Indemnified Person"), from and against any loss, damage or claim incurred by
such Company Indemnified Person by reason of any act or omission performed or
omitted by such Company Indemnified Person in good faith on behalf of the Trust
and in a manner such Company Indemnified Person 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 illegal. The Declarations of Trust also provide that, to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by a
Company Indemnified Person in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the Company prior to the
final disposition of such claim, demand, action suit or proceeding upon receipt
by the Company of any undertaking by or on behalf of the Company Indemnified
Person to repay such amount if it shall be determined that the Company
Indemnified Person is not entitled to be indemnified as authority in the
Declaration of Trust. The Declarations of Trust further provide that no Company
Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Trust or any Covered Person (as defined therein) or for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Company Indemnified Person in good faith on behalf of the Trust
and in a manner such Company Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Company Indemnified Person by the
Declaration of Trust or by law, except that a Company Indemnified Person shall
be liable for any such loss, damage or claim incurred by reason of such Company
Indemnified Person's gross negligence or willful misconduct with respect to acts
or omissions.
In addition, certain sections of each of the form of Underwriting Agreement
filed as an Exhibit hereto provide for indemnification of the Registrants and
their directors and officers by the underwriters or agents against certain
liabilities, including certain liabilities under the 1933 Act. From time to time
similar provisions have been contained in other agreements relating to other
securities of the Corporation.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement for offering of Preferred Securities**
4.1 Certificate of Trust of NB Capital Trust I*
4.2 Certificate of Trust of NB Capital Trust II*
4.3 Certificate of Trust of NB Capital Trust III*
4.4 Declaration of Trust of NB Capital Trust I*
4.5 Declaration of Trust of NB Capital Trust II*
4.6 Declaration of Trust of NB Capital Trust III*
4.7 Form of Amended and Restated Declaration of Trust for NB Capital Trust I
4.8 Form of Amended and Restated Declaration of Trust for NB Capital Trust II
4.9 Form of Amended and Restated Declaration of Trust for NB Capital Trust III
4.10 Form of Indenture between NationsBank Corporation and The Bank of New York, as Trustee
4.11 Form of Supplemental Indenture to be used in connection with the issuance of Junior Subordinated
Notes and Preferred Securities
4.12 Form of Preferred Security (included in 4.7-4.9 above)
4.13 Form of Junior Subordinated Debt Security (included in 4.11 above)
4.14 Form of Guarantee with respect to Preferred Securities issued by NB Capital Trust I
4.15 Form of Guarantee with respect to Preferred Securities issued by NB Capital Trust II
4.16 Form of Guarantee with respect to Preferred Securities issued by NB Capital Trust III
5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P.**
5.2 Opinion of Stroock & Stroock & Lavan**
</TABLE>
II-2
<PAGE>
<PAGE>
<TABLE>
<C> <S>
8.1 Opinion of Stroock & Stroock & Lavan**
12.1 Calculation of Ratios of Earnings to Fixed Charges, incorporated herein by reference to Exhibit
12(a) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996 (File No. 1-6523)
23.1 Consent of Price Waterhouse LLP*
23.2 Consent of Ernst & Young LLP
23.3 Consent of Smith Helms Mulliss & Moore, L.L.P. (included in Exhibit 5.1)
23.4 Consent of Stroock & Stroock & Lavan (included in Exhibit 5.2)
23.5 Consent of Stroock & Stroock & Lavan (included in Exhibit 8.1)
24.1 Powers of Attorney
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Debt Trustee under the Indenture**
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and Restated Declaration of Trust of NB Capital
Trust I**
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and Restated Declaration of Trust of NB Capital
Trust II**
25.4 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and Restated Declaration of Trust of NB Capital
Trust III**
25.5 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Preferred Guarantee Trustee under the Preferred Securities Guarantee of NationsBank
Corporation for the benefit of the holders of Preferred Securities of NB Capital Trust I**
25.6 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Preferred Guarantee Trustee under the Preferred Securities Guarantee of NationsBank
Corporation for the benefit of the holders of Preferred Securities of NB Capital Trust II**
25.7 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Preferred Guarantee Trustee under the Preferred Securities Guarantee of NationsBank
Corporation for the benefit of the holders of Preferred Securities of NB Capital Trust III**
</TABLE>
* Previously filed with the initial filing of this Registration Statement
** To be filed by further Amendment
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the 1933 Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement.
II-3
<PAGE>
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the 1933 Act,
each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the 1933 Act, each filing of the Corporation's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act 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.
(c) Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the 1933 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 the Registrants 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 1933 Act and will be governed by the
final adjudication of such issue.
(d) The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the 1933 Act, 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 1933 Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the 1933 Act, 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.
II-4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Charlotte, North Carolina, on November
15, 1996.
NATIONSBANK CORPORATION
(REGISTRANT)
By: /S/ HUGH L. MCCOLL, JR.*
HUGH L. MCCOLL, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ HUGH L. MCCOLL, JR.* Chairman of the Board, Chief Executive November 15, 1996
Officer and Director (Principal
(HUGH L. MCCOLL, JR.) Executive Officer)
/s/ JAMES H. HANCE, JR.* Vice Chairman and Chief Financial November 15, 1996
Officer (Principal Financial Officer)
(JAMES H. HANCE, JR.)
/s/ MARC D. OKEN* Executive Vice President November 15, 1996
and Chief Accounting Officer
(MARC D. OKEN) (Principal Accounting
Officer)
/s/ RONALD W. ALLEN* Director November 15, 1996
(RONALD W. ALLEN)
/s/ RAY C. ANDERSON* Director November 15, 1996
(RAY C. ANDERSON)
/s/ WILLIAM M. BARNHARDT* Director November 15, 1996
(WILLIAM M. BARNHARDT)
/s/ THOMAS E. CAPPS* Director November 15, 1996
(THOMAS E. CAPPS)
/s/ CHARLES W. COKER* Director November 15, 1996
(CHARLES W. COKER)
/s/ THOMAS G. COUSINS* Director November 15, 1996
(THOMAS G. COUSINS)
/s/ ALAN T. DICKSON* Director November 15, 1996
(ALAN T. DICKSON)
</TABLE>
II-5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ W. FRANK DOWD, JR.* Director November 15, 1996
(W. FRANK DOWD, JR.)
/s/ PAUL FULTON* Director November 15, 1996
(PAUL FULTON)
/s/ TIMOTHY L. GUZZLE* Director November 15, 1996
(TIMOTHY L. GUZZLE)
/s/ W. W. JOHNSON* Director November 15, 1996
(W. W. JOHNSON)
/s/ JOHN J. MURPHY* Director November 15, 1996
(JOHN J. MURPHY)
/s/ JOHN C. SLANE* Director November 15, 1996
(JOHN C. SLANE)
/s/ O. TEMPLE SLOAN, JR.* Director November 15, 1996
(O. TEMPLE SLOAN, JR.)
/s/ JOHN W. SNOW* Director November 15, 1996
(JOHN W. SNOW)
/s/ MEREDITH R. SPANGLER* Director November 15, 1996
(MEREDITH R. SPANGLER)
/s/ ROBERT H. SPILMAN* Director November 15, 1996
(ROBERT H. SPILMAN)
/s/ RONALD TOWNSEND* Director November 15, 1996
(RONALD TOWNSEND)
/s/ E. CRAIG WALL, JR.* Director November 15, 1996
(E. CRAIG WALL, JR.)
/s/ JACKIE M. WARD* Director November 15, 1996
(JACKIE M. WARD)
/s/ VIRGIL R. WILLIAMS* Director November 15, 1996
(VIRGIL R. WILLIAMS)
*By: CHARLES M. BERGER
CHARLES M. BERGER, ATTORNEY-IN-FACT
</TABLE>
II-6
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Charlotte, North Carolina, on November 15,
1996.
NB CAPITAL TRUST I
By:/s/ JOHN E. MACK
JOHN E. MACK
REGULAR TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Charlotte, North Carolina, on November 15,
1996.
NB CAPITAL TRUST II
By:/s/ JOHN E. MACK
JOHN E. MACK
REGULAR TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Charlotte, North Carolina, on November 15,
1996.
NB CAPITAL TRUST III
By:/s/ JOHN E. MACK
JOHN E. MACK
REGULAR TRUSTEE
II-7
<PAGE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
<C> <S> <C>
1.1 Form of Underwriting Agreement for offering of Preferred Securities**
4.1 Certificate of Trust of NB Capital Trust I*
4.2 Certificate of Trust of NB Capital Trust II*
4.3 Certificate of Trust of NB Capital Trust III*
4.4 Declaration of Trust of NB Capital Trust I*
4.5 Declaration of Trust of NB Capital Trust II*
4.6 Declaration of Trust of NB Capital Trust III*
4.7 Form of Amended and Restated Declaration of Trust for NB Capital Trust I
4.8 Form of Amended and Restated Declaration of Trust for NB Capital Trust II
4.9 Form of Amended and Restated Declaration of Trust for NB Capital Trust III
4.10 Form of Indenture between NationsBank Corporation and The Bank of New York, as Trustee
4.11 Form of Supplemental Indenture to be used in connection with the issuance of Junior Subordinated
Notes and Preferred Securities.
4.12 Form of Preferred Security (included in 4.7-4.9 above)
4.13 Form of Junior Subordinated Debt Security (included in 4.11 above)
4.14 Form of Guarantee with respect to Preferred Securities issued by NB Capital Trust I
4.15 Form of Guarantee with respect to Preferred Securities issued by NB Capital Trust II
4.16 Form of Guarantee with respect to Preferred Securities issued by NB Capital Trust III
5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P.**
5.2 Opinion of Stroock & Stroock & Lavan**
8.1 Opinion of Stroock & Stroock & Lavan**
12.1 Calculation of Ratios of Earnings to Fixed Charges, incorporated herein by reference to Exhibit
12(a) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996 (File No. 1-6523)
23.1 Consent of Price Waterhouse LLP*
23.2 Consent of Ernst & Young LLP
23.3 Consent of Smith Helms Mulliss & Moore, L.L.P. (included in Exhibit 5.1)
23.4 Consent of Stroock & Stroock & Lavan (included in Exhibit 5.2)
23.5 Consent of Stroock & Stroock & Lavan (included in Exhibit 8.1)
24.1 Powers of Attorney
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Debt Trustee under the Indenture**
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and Restated Declaration of Trust of NB Capital
Trust I**
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and Restated Declaration of Trust of NB Capital
Trust II**
25.4 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Property Trustee under the Amended and Restated Declaration of Trust of NB Capital
Trust III**
25.5 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Preferred Guarantee Trustee under the Preferred Securities Guarantee of NationsBank
Corporation for the benefit of the holders of Preferred Securities of NB Capital Trust I**
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
25.6 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Preferred Guarantee Trustee under the Preferred Securities Guarantee of NationsBank
Corporation for the benefit of the holders of Preferred Securities of NB Capital Trust II**
<C> <S> <C>
25.7 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New
York, as Preferred Guarantee Trustee under the Preferred Securities Guarantee of NationsBank
Corporation for the benefit of the holders of Preferred Securities of NB Capital Trust III**
</TABLE>
* Previously filed with the initial filing of this Registration Statement
** To be filed by further Amendment
<PAGE>
EXHIBIT 4.7
AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL TRUST I
Dated as of November __, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...........................8
SECTION 2.2 Lists of Holders of Securities.............................8
SECTION 2.3 Reports by the Property Trustee............................9
SECTION 2.4 Periodic Reports to Property Trustee.......................9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent..................................................9
SECTION 2.6 Events of Default; Waiver.................................10
SECTION 2.7 Event of Default; Notice..................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name......................................................12
SECTION 3.2 Office....................................................12
SECTION 3.3 Purpose...................................................13
SECTION 3.4 Authority.................................................13
SECTION 3.5 Title to Property of the Trust............................13
SECTION 3.6 Powers and Duties of the Regular Trustees.................13
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees..................................................17
SECTION 3.8 Powers and Duties of the Property Trustee.................18
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee..........................................20
SECTION 3.10 Certain Rights of Property Trustee........................22
SECTION 3.11 Delaware Trustee..........................................25
SECTION 3.12 Execution of Documents....................................25
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities................................................26
SECTION 3.14 Duration of Trust.........................................26
SECTION 3.15 Mergers...................................................26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities...................28
SECTION 4.2 Responsibilities of the Sponsor...........................28
i
<PAGE>
Page
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees........................................29
SECTION 5.2 Qualifications of Delaware Trustee........................30
SECTION 5.3 Property Trustee; Eligibility.............................30
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally................................31
SECTION 5.5 Regular Trustees..........................................31
SECTION 5.6 Appointment of Delaware Trustee.
SECTION 5.7 Appointment, Removal and Resignation of
Trustees..................................................33
SECTION 5.8 Vacancies among Trustees..................................34
SECTION 5.9 Effect of Vacancies.......................................34
SECTION 5.10 Meetings..................................................35
SECTION 5.11 Delegation of Power.......................................35
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business....................................36
ARTICLE VI
0DISTRIBUTIONS
SECTION 6.1 Distributions.............................................36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities...................36
SECTION 7.2 Paying Agent.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust......................................38
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................................39
SECTION 9.2 Transfer of Certificates..................................39
SECTION 9.3 Deemed Security Holders...................................40
SECTION 9.4 Book-Entry Interests......................................40
SECTION 9.5 Notices to Clearing Agency................................41
SECTION 9.6 Appointment of Successor Clearing Agency..................41
SECTION 9.7 Definitive Preferred Security
Certificates ..............................41
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................42
ii
<PAGE>
Page
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................43
SECTION 10.2 Exculpation...............................................43
SECTION 10.3 Fiduciary Duty............................................44
SECTION 10.4 Indemnification...........................................45
SECTION 10.5 Outside Businesses.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year...............................................49
SECTION 11.2 Certain Accounting Matters................................49
SECTION 11.3 Banking...................................................50
SECTION 11.4 Withholding...............................................50
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................51
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent........................................53
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee...................................................55
SECTION 13.2 Representations and Warranties of Delaware
Trustee...................................................56
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...................................................56
SECTION 14.2 Governing Law.............................................58
SECTION 14.3 Intention of the Parties..................................58
SECTION 14.4 Headings..................................................58
SECTION 14.5 Successors and Assigns....................................58
SECTION 14.6 Partial Enforceability....................................58
SECTION 14.7 Counterparts; Acceptance..................................59
iii
<PAGE>
Page
ANNEX I TERMS OF SECURITIES.............................I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE........ A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE........... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE...........................B-1
EXHIBIT C UNDERWRITING AGREEMENT..........................C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)......................................................... 5.3(a)
310(c)......................................................... Inapplicable
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(f)......................................................... Inapplicable
315(a)......................................................... 3.9(b)
315(c)......................................................... 3.9(a)
315(d)......................................................... 3.9(a)
316(a)......................................................... Annex I
316(c)......................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the inter pretation of any of its terms or
provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NB CAPITAL TRUST I
November __, 1996
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of November __, 1996, 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 Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established NB Capital
Trust I (the "Trust"), a trust under the Delaware Busi ness Trust Act pursuant
to a Declaration of Trust dated as of October 29, 1996 and amended as of
_______, 199_ (the "Original Declaration"), and a Certificate of Trust filed
with the Secre tary of State of the State of Delaware on November 1, 1996, for
the sole purpose of issuing and selling certain securities repre senting
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Notes of the Note Issuer (each as defined herein);
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act (as
defined herein) and that this Declaration constitute the governing instrument of
such business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the 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.
<PAGE>
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 Dec laration"
are to this Declaration as modified, supplemented or amended from time
to time and Annex I and Exhibits A and B shall be a part of this
Declaration;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sec tions of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(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.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereun der.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry" means a book entry by a Clearing Agency as
described in Section 9.4.
"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 Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or
2
<PAGE>
Charlotte, North Carolina are authorized or obligated by law, executive order or
regulation to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect Book-Entry transfers and pledges of the Preferred
Securi ties.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects Book-Entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" under the
Underwriting 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 Commis
sion.
"Common Securities" has the meaning specified in
Section 7.1.(a).
"Common Securities Guarantee" means the guarantee agreement to
be dated as of November __, 1996 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security 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, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
3
<PAGE>
Property 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, Floor 21 West, 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.
"Delaware Trustee" has the meaning set forth in Section
5.2.
"Definitive Preferred Security Certificates" has the
meaning set forth in Section 9.4.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Notes.
"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 10.4(b).
"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
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means the Indenture and First Supplemental
Indenture, each dated as of November __, 1996, among the Note Issuer and the
Note Trustee pursuant to which the Notes are to be issued.
"Investment Company" means an investment company as
defined in the Investment Company Act.
4
<PAGE>
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section
3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securi ties or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class 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 aggre gate 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 percentag es are determined) of all outstanding Securities of
the relevant class.
"Ministerial Action" has the meaning set forth in the
terms of the Securities as set forth in Annex I.
"Note Issuer" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as issuer of the Notes under the Indenture.
"Note Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a suc cessor is appointed
thereunder, and thereafter means such succes sor trustee.
"Notes" means the series of Notes to be issued by the Note
Issuer under the Indenture to be held by the Property Trustee.
"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 officer signing the Certifi
cate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
5
<PAGE>
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Paying Agent" has the meaning specified in Section
7.2.
"Person" means a legal person, including any individu al,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorpo rated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in
Section 7.1.
"Preferred Securities Guarantee" means the guarantee agreement
to be dated as of November __, 1996, of the Sponsor 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 Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Property Trustee" means the Trustee meeting the eligi bility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section
5.1.
6
<PAGE>
"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.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice-president, any assis tant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated offi cers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particu lar 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.
"Sponsor" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Sec
tion 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I
hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
out standing Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemp tion, liquidation or otherwise, plus accrued
and unpaid Dis tributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
7
<PAGE>
"Treasury Regulations" means the income tax regula tions,
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 provi sions of succeeding regulations).
"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
provi sions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agree ment for
the offering and sale of Preferred Securities in the form of Exhibit C.
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 Property 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
ss.ss. 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securi ties as equity
securities representing undivided beneficial interests in the assets of
the Trust.
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 Property Trustee (i)
8
<PAGE>
within 14 days after each record date for payment of Distributions, a
list, in such form as the Property Trustee may reasonably require, of
the names and addresses of the Holders of the Securities ("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 Property
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 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it
or which it re ceives in the capacity as Paying Agent (if acting in
such capacity) provided that the Property Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obli gations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 31 of each year, the Property
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such docu ments, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Inden ture Act in the form, in the manner and
at the times required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Prece dent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth
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in ss. 314(c) of the Trust Indenture Act. Any certificate or opinion required to
be given by an officer pursuant to ss. 314(c)(1) may be given in the form of an
Officers' Certificate.
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 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 under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Notes (a
"Super Majority") to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the
Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 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, any such
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) 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:
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(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Decla ration as
provided below in this Section 2.6(b), the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Ma
jority to be waived, 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), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal
amount of the Notes outstanding;
provided further, 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 consequenc es until 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 other wise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
ss.ss. 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 Inden ture 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) A waiver of an Event of Default under the Inden ture by
the Property Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and
such ss. 316(a)(1)(B) of the Trust Indenture Act is hereby express ly
excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
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SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all
defaults with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, unless such defaults have been cured
be fore the giving of such notice (the term "defaults" for the purposes
of this Section 2.7(a) being hereby defined to be an Event of Default
as defined in the Indenture, not in cluding any periods of grace
provided for therein and irre spective of the giving of any notice
provided therein); provided that, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Section 5.01 of the
Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NB Capital Trust I," as such name may be
modified from time to time by the Regular Trustees follow ing written notice to
the Holders of Securities. 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
NationsBank Corporation, NationsBank Corporate Center, 100 North Tryon Street,
23rd Floor, Charlotte, North Carolina 28255. On 10 Business Days written notice
to the Holders of Securities, the Regular Trustees may designate another
principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Notes, and (b) except as otherwise limited herein, 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 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, 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 and an action taken by the
Property 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 Notes
and the Property 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 undi vided 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 Preferred Securities and the Common
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 Securi
ties, and the issuance of Securities shall be limited to a
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simultaneous issuance of both Preferred Securities and Com
mon Securities on each Closing Date;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the
Sponsor, including any 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 State in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, pre pared by
the Sponsor, to the New York Stock Exchange, Inc. or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing 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; and
(v) execute and enter into the Underwriting
Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Notes with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Notes to be held of
record in the name of the Property Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Tax Event; provided that the
Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining from taking any Ministerial Action
in relation to a Tax 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
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of ss.316(c) of the Trust Indenture Act, Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders
of Preferred Securities and Holders of Common 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;
(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 Property 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;
(j) to give the certificate required by ss. 314(a)(4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary or inciden
tal to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Note Issuer of its election
to defer payments of interest on the Notes by extending the interest
payment period under the Inden ture;
(n) 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;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such exis tence is necessary to protect the
limited liability of the
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Holders of the Preferred Securities or to enable the Trust
to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trust ees determine in their
discretion to be necessary or desir able 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 Note Issuer to ensure
that the Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all appli cable tax
returns and tax information reports that are re quired to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
The Regular Trustees must 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 inconsis tent 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 Property 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 Note Issuer.
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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
Property Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause
the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Notes;
(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; or
(vii) other than as provided in this Amended and
Restated Declaration or Annex I, (A) direct the time, method
and place of exercising any trust or power conferred upon the
Note Trustee with respect to the Notes, (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 Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or
the Notes where such consent shall be required unless the
Trust shall have received an opinion of counsel to the effect
that such modification will not cause more than an
insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
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SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Property Trustee to the Notes shall vest automatically in each Person
who may hereafter be appointed as Property Trustee in accordance with
Section 5.7. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-in
terest bearing trust account (the "Property Trustee Ac count")
in the name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held
uninvested until dis bursed in accordance with this
Declaration. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securi ties by a
"nationally recognized statistical rating organization", as
that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the re demption of the
Preferred Securities and the Common Securities to the extent
the Notes are redeemed or ma ture; 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
Notes to Holders of
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Securities upon the occurrence of certain special events (as
may be defined in the terms of the Securities) or other
specified circumstances pursuant to the terms of the
Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's du ties and obligations under this Declaration or
the Trust Indenture Act.
If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
Except as provided in this Section, the Holders of Preferred
Securities will not be able to exercise directly any other remedy
available to the holders of the Notes.
(f) The Property 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 of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been
appointed and has accepted that appointment in
accordance with Section 5.7.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Notes
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Property Trustee occurs and is continuing,
the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Notes subject to the
rights of the Holders pursuant to the terms of such Securi ties.
(h) The Property Trustee may authorize one or more
Persons (each, a "Paying Agent") to pay Distributions,
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redemption payments or liquidation payments on behalf of the Trust with
respect to all securities and any such Paying Agent shall comply with
ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be removed
by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the pur poses and functions
of the Trust set out in Section 3.3, and the Property 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 Property
Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property 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 of the
Property Trustee has actual knowledge, the Property 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 exer cise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be con strued to
relieve the Property 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 De fault
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and the
Property Trustee shall not be liable except for the
performance of such duties and obliga-
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tions as are specifically set forth in this
Declaration, and no implied covenants or obliga
tions shall be read into this Declaration against
the Property Trustee; and
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certifi cates or
opinions furnished to the Property 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
Property Trustee, the Property Trustee shall be
under a duty to examine the same to de termine
whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Re sponsible
Officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall re
quire the Property 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 exer cise 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 indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with re spect
to the custody, safe keeping and physical pres ervation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner
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as the Property Trustee deals with similar property for its
own account, subject to the protections and limita tions on
liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuine ness,
existence or sufficiency of the Notes or the payment of any
taxes or assessments levied thereon or in connection
therewith;
(vii) the Property 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. Money held by the
Property Trustee need not be segre gated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be re
sponsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under
this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, state ment, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document be lieved by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) An application by the Property Trustee for
written instructions from the appropriate party or parties
may, at the option of the Property Trustee, set forth in
writing any action proposed to be taken or omitted by the
Property hereunder and the date on and/or after which such
action shall be taken or such omission shall be effective. The
Property Trustee shall not be liable for any action taken by,
or omission of, the Property Trustee in accordance with a
proposal included in such application on or after the date
specified in such application (which date shall
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not be less than three Business Days after the date the
appropriate party or parties actually receives such
application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the
Property Trustee shall have received written instructions in
response to such application specifying the action to be taken
or omitted;
(iii) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Cer tificate;
(iv) whenever in the administration of this Dec
laration, the Property Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Property 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;
(v) the Property Trustee shall have no duty to see
to any recording, filing or registration of any in strument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
(vi) the Property Trustee may consult with coun sel
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, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdic tion;
(vii) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Declaration at the request or direction of any
Holder, unless such Holder shall have
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provided to the Property Trustee security and indem nity,
reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses and
the expenses of the Property 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 Property
Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee,
upon the occur rence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this
Declaration;
(viii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direc tion, consent, order, bond,
debenture, note, other evi dence of indebtedness or other
paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(ix) the Property 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 Property 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;
(x) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its
agents alone shall be suffi cient and effective to perform any
such action and no third party shall be required to inquire as
to the authority of the Property 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 Property Trustee's or its agent's taking such action;
(xi) whenever in the administration of this Dec
laration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders
of the same proportion in
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liquidation amount of the Securities as would be enti tled to
direct the Property Trustee under the terms of the Securities
in respect of such remedy, right or ac tion, (ii) may refrain
from enforcing such remedy or right or taking such other
action until such in structions are received, and (iii) shall
be protected in conclusively relying on or acting in or
accordance with such instructions;
(xii) except as otherwise expressly provided by
this Declaration, the Property Trustee shall not be under any
obligation to take any action that is discre tionary under the
provisions of this Declaration; and
(xiii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property 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 Property 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 Property 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 enti tled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property 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
ss. 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b),
including
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any amendments thereto, shall be signed by a majority of the
Regular Trustees.
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 correct ness. 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 sufficien cy of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from November 1, 1996.
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 substantially as an entirety to any corporation or other
body, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the
Regular Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as
such under the laws of any State; provided that:
(i) if the Trust is not the survivor, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obli
gations of the Trust under the Securities; or
(B) substitutes for the Securities oth er
securities having substantially the same terms as
the Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Securities rank with re spect to Distributions and
payments upon liquidation, redemption and
otherwise;
(ii) the Note Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same
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powers and duties as the Property Trustee as the Holder
of the Notes;
(iii) the Preferred Securities or any Succes sor
Securities which are Preferred Securities are listed, or any
Successor Securities of the Preferred Securities will be
listed upon notification of issu ance, 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 Preferred Securities (including
any Successor Securities of the Preferred Securities) to be
downgraded by any nationally recog nized statistical rating
organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, pref erences
and privileges of the Holders of the Securi ties (including
any Successor Securities) in any material respect (other than
with respect to any dilu tion of such Holders' interests in
the new or successor entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose iden
tical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation or replacement, the Sponsor 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, amal
gamation or replacement does not adversely affect
the rights, preferences and privileges of the
Holders of the Securities (including any Successor
Securities) in any material respect (other than
with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolida tion,
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 the
Successor Entity) will continue to
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be classified as a grantor trust for United
States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at least
to the extent provided by the Preferred Securi ties Guarantee
and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquida tion 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,
amal gamation, merger or replacement would cause the Trust or Successor
Entity to be classified as other than 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
capital of the Trust, at the same time as the Preferred Securities are sold.
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 Com
mission a registration statement on Form S-3 in relation to
the Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appro priate
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 States;
(c) to prepare for filing by the Trust an applica
tion to the New York Stock Exchange or any other national
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stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Com mission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Preferred
Securities.
In addition, the Sponsor shall have the right at any time to cause the
Trust to be dissolved and the Notes held by the Trust to be distributed to
Holders of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees of this Trust shall be five, and:
(a) at any time before the issuance of any Securi
ties, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased 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; provided,
however, that, the number of Trustees shall in no event be less than
two; provided further that (1) 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");
(2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3)
one Trustee shall be the Property 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 re quirements.
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SECTION 5.2 Qualifications of Delaware Trustee.
If required by the Business 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 Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the re quirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing busi ness
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 a
Property 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
5.3(a)(ii), the combined capital and sur plus of such
corporation shall be deemed to be its com bined capital and
surplus as set forth in its most re cent report of condition
so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.7(c).
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(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in ss. 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions
of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first provision contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property 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.
After the date of this Declaration, the Regular Trustees shall
be:
John E. Mack
William L. Maxwell
Marc D. Oken
(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.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable
law, any Regular Trustee is autho rized 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 3.6,
provided, that, the registration statement referred to in Section 3.6,
including any amendments thereto, shall be signed by a majority of the
Regular Trustees; and
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(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 of Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
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SECTION 5.7 Appointment, Removal and Resignation of Trust
ees.
(a) Subject to Section 5.7(b), Trustees may be ap
pointed 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) 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.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property
Trustee has been appointed and has ac cepted such appointment by
written instrument executed by such Successor Property Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(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
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(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 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 Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such ap pointment
by instrument executed by such Suc cessor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
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(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 Delaware Trustee or Successor
Property Trustee as the case may be if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property 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 Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
successor Delaware Trustee, as the case may be.
SECTION 5.8 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 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 evi dence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bank
ruptcy, dissolution, liquidation, incompetence or incapacity to
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perform the duties of a Trustee shall not operate to 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 5.7,
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 Decla ration.
SECTION 5.10 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 law
fully 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. Any
and all actions of the Regular Trustees also may be evidenced by a written
consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natu ral person over the age
of 21 his or her power for the pur pose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Regular Trustees shall have power to dele gate from
time to time to such of their number or to officers of the Trust the
doing of such things and the
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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.
Section 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property 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 Property 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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property 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 (as defined herein) at the
times and in accordance with the applicable terms of the relevant Holder's
Securities. If and to the extent that the Note Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Notes held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property 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. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms.
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 representing
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undivided beneficial interests in the assets of the Trust having such
terms as are set forth in a completed designation of Terms in the form
attached as Annex I (the "Preferred Securities") and one class of
common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in a completed
designation of Terms in the form attached as Annex I (the "Common
Securities.") 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 Securities are subject to redemption as
provided in the designations of Terms.
(c) The Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual signature of any
present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Certificates shall cease to
be such Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Cer tificates 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
Secu rity, 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. Certifi cates shall be typed, printed,
lithographed or engraved or may be produced in any other manner as is
reasonably ac ceptable 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.
(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 non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accor dance with the terms of
this Declaration, shall be deemed to
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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, City of New York,
State of New York, an office or agency where the Preferred Securities may be
presented for payment ("Paying Agent). The Trust 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 Trust may change any Paying Agent without prior notice to any Holder.
The Trust shall notify the Property Trustee of the name and address of any Agent
not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent. The Trust shall
initially act as Paying Agent for the Preferred Securities and the Common
Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of disso
lution or its equivalent with respect to the Sponsor; upon the
consent of a majority in liquidation amount of the Securities
voting together as a single class to dissolve the Trust or the
revocation of the Sponsor's charter and the expiration of 90
days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial
dissolution of the Holder of the Common Securities, the
Sponsor or the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance with
the terms of the Securities;
(v) At the election of the Sponsor at any time
pursuant to which the Trust shall have been dissolved
in accordance with the terms of the Securities and all
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of the Notes endorsed thereon shall have been distrib
uted to the Holders of Securities in exchange for all
of the Securities; or
(vi) before the issuance of any Securities, with
the consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall, after satisfaction
of all obligations of the Trust, file a certificate of cancellation
with the Secretary of State of the State of Delaware and the Trust
shall terminate.
(c) The provisions of Section 3.9 and Article X
shall survive the termination of the Trust.
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 Secu rities. 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) The Sponsor may not transfer the Common Securi
ties.
SECTION 9.2 Transfer of Certificates.
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 indem nity 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 Certifi
cate, the Regular Trustees shall cause one or more new Certifi cates to be
issued 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.
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Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certifi cate shall be entitled to the
rights and subject to the obliga tions of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each trans
feree shall be deemed to have agreed to be bound by this Declara tion.
SECTION 9.3 Deemed Security Holders.
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 holder of such Certificate and of the Securi ties represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accord ingly, 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.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the Pre ferred
Securities, the Preferred Securities Certificates, on original issuance, will be
issued in the form of one or more fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clear ing Agency, by, or on behalf of, the Trust. Such Global Certifi cates
shall initially be registered on the books and records of the Trust in the name
of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certifi cates,
except as provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive 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 Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or con sents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Preferred Security Beneficial Owners;
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(c) to the extent that the provisions of this Sec tion 9.4
conflict with any other provisions of this Declara tion, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agree ments between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. DTC will make Book-Entry transfers among
the Clearing Agency Participants and receive and transmit payments of
Distribu tions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Pre ferred
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 Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Pre ferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its ser vices as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the Book-Entry system through the Clearing Agency
with respect to the Preferred Securi ties,
then:
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(c) Definitive Preferred Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. 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 Clearing Agency. The Definitive Preferred Security
Certificates shall be typed, 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 desig nation
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
such security or indemnity as may be required by them to
keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certifi cate, 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
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issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Otherwise, Definitive Preferred Security Certificates will
not be issued.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declara
tion, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations organized for profit under the General Corporation Law of
the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, respon sible 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 In
demnified 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 Per son's gross negligence (or
negligence in the case of the Trustee) 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 Trust and upon such information,
opinions, reports or statements
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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.
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 Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
lia bilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; 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
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 accept ed
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 Indem
nified Person at law or in equity or otherwise.
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(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 ex press
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 Note 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, adminis trative 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.
(ii) The Note 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
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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, he shall be
indemnified, to the full 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 10.4(a) (unless ordered by a court) shall
be made by the Note Issuer only as autho rized 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 par ties 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
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investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a) shall be paid
by the Note 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 Note Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Note 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, or, 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 deter mination 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 proceed ing, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct
was unlaw ful. In no event shall any advance be made in
instanc es 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 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 Note 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 Note 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 obliga tions then existing.
(vii) The Note Issuer or the Trust may pur
chase and maintain insurance on behalf of any person
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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 Note 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 serv ing 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 Note Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Property Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the
income of such Fiduciary Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection
with the accep tance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investi gating any
claim or liability in connection with the exer cise or performance of
any of its powers or duties hereunder. The obligation to indemnify as
set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration.
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SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, indepen dently 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
indepen dent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the busi ness of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such oppor
tunity 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
Property 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
invest ment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property 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.
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 se lected by the Regular Trustees;
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(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, 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;
(c) The Regular Trustees shall cause to be duly pre pared and
delivered to each of the Holders of Securities, 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 re quired by the Code and the Treasury Regulations. Not
withstanding 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; and
(d) The Regular Trustees shall cause to be duly pre pared 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 re quired 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, howev er, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be depos ited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property 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
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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.
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 Declara tion may only be
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, pow
ers, duties, obligations or immunities of the Property
Trustee, the Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Dela
ware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such pur
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amend ment,
the Property 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 amend ment
which affects the rights, powers, duties, obli gations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
(A) an Officers' Certificate from each
of the Trust and the Sponsor that such amendment
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is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Se
curities); 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 amend
ment 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 af fect
the powers of the Property Trustee in con
travention of the Trust Indenture Act; or
(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 of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities;
(d) Section 9.1(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 con
sent of the Holders of a Majority in liquidation amount of
the Common Securities and;
(f) the rights of the holders of the Common Securi ties 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 Declara
tion may be amended without the consent of the Holders of
the Securities to:
(i) cure any ambiguity;
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(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) to conform to any change in Rule 3a-5 Act or
any 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, pref erences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision
of the Amended Declaration to such extent as may be necessary
to carry out its provisions, including making any redemption
of the Notes or dissolution of the Trust and distribution of
the Notes to the Holders of the Securities in exchange for all
of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Secu rities 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 Securi ties are entitled to act under the terms of
this Declara tion, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or ad
mitted for trading. The Regular Trustees shall call a meet ing 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 of Securities wish to
call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securi ties calling a
meeting shall specify in writing the Security Certificates held by the
Holders of Securities exercising the right to call a meeting and only
those Securities spec ified 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 of Securities:
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(i) notice of any such meeting shall be given to
all the Holders of Securities having a right to vote thereat
at least seven days and not more than 60 days before the date
of such meeting. Whenever a vote, consent or approval of the
Holders of Securities 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 of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be neces sary to authorize or take such action at a
meeting at which all Holders of Securities 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 of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written
ballot submitted to the Security Hold er 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 of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, in cluding 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 of Securities 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 of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Se
curities shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Decla
ration, the terms of the Securities, the Trust
Indenture Act or the listing rules of any stock
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exchange on which the Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating
to meetings of Holders of Securities, including notice of the
time, place or pur pose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the estab
lishment 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.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insol vency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the dis cretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with
or constitute a breach of the charter or by-laws of the
Property Trustee; and
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(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or feder al banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this Declaration.
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:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to per form its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trust ee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, morato rium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of wheth er the
enforcement of such remedies is considered in a proceeding in equity or
at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authori ty is required for the
execution, delivery or performance by the Delaware Trustee, of this
Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE 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
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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 of the Securities):
NB Capital Trust I
c/o NationsBank Corporation
Corporate Treasury
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: John E. Mack, Treasurer
Telecopy: (704) 386-0270
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
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):
NationsBank Corporation
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
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(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 deliv ered 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 hereun der
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 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 interpreta tion 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 appli cation of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the applica tion of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
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SECTION 14.7 Counterparts; Acceptance.
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.
Each Trustee, by its execution of a counterpart of this
Declaration, acknowledges and accepts its appointment as Trustee.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
----------------------------------
John E. Mack, as Regular Trustee
----------------------------------
William L. Maxwell, as Regular
Trustee
----------------------------------
Marc D. Oken, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
Name:
Title:
NATIONSBANK CORPORATION,
as Sponsor
By:
Name:
Title:
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ANNEX I
NB CAPITAL TRUST I
DESIGNATION OF TERMS OF
TRUST ORIGINATED PREFERRED SECURITIES AND
TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of November __, 1996 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provi sions of the Preferred Securities and the
Common 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 such
Declaration, as defined in the Prospectus referred to be low):
1. Designation and Number.
(a) Preferred Securities. __________ Preferred Secu rities of
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of $___________________ and a liquidation amount with respect to the
assets of the Trust of $___ per preferred security, are hereby designated for
the purposes of identification only as "Trust Originated Preferred SecuritiesSM
('TOPrS'SM)" (the "Preferred Securities"). The Pre ferred 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 prac tice or
to conform to the rules of any stock exchange on which the Preferred Securities
are listed.
(b) Common Securities. ________ Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
$________________________ and a liqui dation amount with respect to the assets
of the Trust of $__ per common security, are hereby designated for the purposes
of identification only as "Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidenc ing 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.
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2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of _____% (the "Coupon Rate") of the stated liquidation amount of
$__ per Security, such rate being the rate of interest payable on the Notes to
be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distribu tions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Notes held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. 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 for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Securities will be cumula tive, will
accrue from November __, 1996, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
_______, 1996, except as otherwise described below. The Note Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Notes for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Notes, provided
that no Extension Period shall last beyond the date of maturity of the Notes. As
a consequence of such deferral, Distributions will also be deferred hereunder
for the same period. Despite such deferral, quarterly Distribu tions 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 termi nation of any such Extension Period, the Note 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 quarters or extend beyond the maturity of the Notes. Payments of
accrued 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 Note Issuer may commence a new Extension Period, subject
to the above requirements.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of
the Trust on the relevant record dates. While the Preferred
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Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Notes. Subject to any applicable
laws and regula tions and the provisions of the Declaration, each such payment
in respect of the Preferred Securities will be made as described under the
heading "Description of the Preferred Securities -- Book-Entry Only Issuance --
The Depository Trust Company" in the Prospectus Supplement dated November __,
1996, to the Prospectus dated November __, 1996 (together, the "Prospectus"), of
the Trust included in the Registration Statement on Form S-3 of the Sponsor, the
Trust and certain other business trusts. The rele vant record dates for the
Common Securities shall be the same record date as for the Preferred Securities.
If the Preferred Securities shall not continue to remain in book-entry only
form, the relevant record dates for the Preferred Securities shall be the March
15, June 15, September 15 and December 15 prior to the relevant payment dates,
which payment dates correspond to the interest payment dates on the Notes.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Note Issuer having failed to make
a payment under the Notes, will 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 or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on
the Securities is not a Busi ness Day, then payment of the Distribution 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 succeed ing 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) 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 (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary disso lution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors an amount
equal to the aggregate of the stated liquidation amount of $__ per Security plus
accrued and unpaid Distributions thereon to
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the date of payment (such amount being the "Liquidation Distribu tion"), unless,
in connection with such dissolution, winding-up or termination, Notes in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securi ties, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distri bution
can be paid only in part because the Trust has insuffi cient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
The Securities are subject to redemption at any time after November __,
20__ and in certain circumstances, following the occurrence of a Tax Event (as
defined below):
(a) Upon the repayment of the Notes in whole or in part,
whether at maturity or upon redemption (either at the option of the Note Issuer
at any time after November __, 20__ or pursuant to a Tax Event as described
below), the proceeds from such repayment or payment shall be simultaneously
applied to redeem Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Notes so repaid or redeemed at a redemption
price of $__ per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than 60
days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(c) If the Sponsor has given a notice of its election to
terminate the Trust, the Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors, cause Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment as, the Securities, to be distributed to the Holders of
the Securities in liquidation of such Holders' interests in the Securities
within 90 days following receipt of the Sponsor's notice of election.
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In the event of a Tax Event prior to ____, 20__, (as defined
below), the Note Issuer shall have the right at any time, upon not less than 30
nor more than 60 days notice, to redeem the Notes in whole but not in part for
cash within 90 days following the occurrence of such Tax Event, and, following
such redemption, Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Notes so redeemed shall be redeemed by the
Trust at the Redemption Price on a Pro Rata basis; provided, however, that, if
at the time there is available to the Note Issuer or the Trust the opportunity
to eliminate, within such 90 day period, the Tax Event by taking some
Ministerial Action (as defined below), the Trust or the Note Issuer will pursue
such Ministerial Action in lieu of redemption.
"Tax Event" means that (i) the Note Issuer shall have received
a Redemption Tax Opinion (as defined below) or (ii) the Regular Trustees shall
have been informed by a nationally recognized independent tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered. "Redemption Tax
Opinion" means an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that on or after the date of the
Prospectus Supplement, as a result of (a) any amendment to, clarification of or
change (including any an nounced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "Administrative Action") or (c) any amendment
to, clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after, the first date of issuance of the
Securities, there is more than an insubstantial risk that the Note Issuer would
be precluded from deducting the interest on the Notes for United States federal
income tax purposes even after the Notes were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust as described
in this Section 4(c); "No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Securities will not recognize any gain or loss
for United States federal income tax purposes as a result of the dissolution of
the Trust and the distribution of Notes; and "Ministerial Action"
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<PAGE>
means some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Note Issuer, the Sponsor or the Holders of the Securities.
On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Notes to be delivered upon
such distribution and any certificates repre senting Securities, except for
certificates representing Pre ferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Notes having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distribu tions on such Securities until such certificates are
presented to the Note Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the out standing
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Notes are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Note Issuer will use its best
efforts to have the Notes listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities were listed immediately prior to the distri
bution of the Notes.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of, or notice of distri bution of
Notes in exchange for the Securities (a "Redemp tion/Distribution
Notice") will be given by the Trust by mail to each Holder of
Securities to be redeemed or ex changed 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 redemption of
the Notes. 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 of Securities. Each Redemption/Distri
bution Notice shall be addressed to the Holders of Securi
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ties at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemp tion/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 of Preferred Securities, it being
understood that, in respect of Pre ferred Securities registered in the
name of and held of record by the Depository or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the distri
bution of the proceeds of such redemption will be made to each Clearing
Agency 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
Notes are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Note Issuer
has paid the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities
and will give the Depository irrevocable instruc tions and authority to
pay the Redemption Price to the Hold ers of the Preferred Securities,
and (B) with respect to Preferred Securities issued in definitive form
and Common Securities, provided that the Note Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Notes, the Property Trustee will
pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a Redemp
tion/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 redemp tion will cease, except the right of the Holders of
such Securities to receive the Redemption Price, but without
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interest on such 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 improp
erly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Secu rities will continue to accrue
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 re demption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in re spect of the
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (in cluding,
without limitation, United States federal securi ties laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, 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) 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 this paragraph,
the Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceed ing for any remedy available to the Property Trustee,
or exercis ing any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property
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Trustee, as holder of the Notes, to (i) exercise the remedies available under
the Indenture conducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided, however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Notes affected thereby, (a "Super Majority"), the
Property 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
Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Notes outstanding. The Property Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conduct ing any remedy available to the Property Trustee or
the Note Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Preferred
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action.
If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may, after a period of 30 days
has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Except as provided in this Section, the Holders of Preferred Securities will not
be able to exercise directly any other remedy available to the holders of the
Notes.
Any approval or direction of Holders of Preferred Secu rities
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 con sent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Pre ferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
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entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
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 Notes 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 enti tled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
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6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) 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.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Preferred Securi ties has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this para graph, 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 Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declara tion, including (i) directing the time,
method, place of con ducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a Majority in
aggregate principal amount of Notes affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the written
direc tion 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 Notes outstanding. Pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of con ducting any remedy
available to the Property Trustee or the Note Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the directions of
the Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust on account of such action. If the Property Trustee
fails to enforce its rights under the Declaration, any Holder of Common
Securities may institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration,
I-11
<PAGE>
without first instituting a legal proceeding against the Property Trustee or any
other Person.
Any approval or direction of Holders of Common Securi ties 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 con sent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securi ties
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Notes 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 disso
lution, 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 at
least a Majority in liquidation amount of the Securities, affect ed thereby,
provided, however, if any amendment or proposal re ferred 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 a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Notes is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Notes, the
Property Trustee shall request the
I-12
<PAGE>
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 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 the
holders of a Super Majority, the Property 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 Notes outstanding; provided, further, that the Property
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
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
of Securities 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
under the Declaration 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 relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfac tion of all amounts owed to the Holders of the Preferred Securi ties,
to each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder 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 a
Declaration Event of Default occurs and is continu ing the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemp tion and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
I-13
<PAGE>
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securi ties, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guaran tee, respectively, including the
subordination provisions therein
and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
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.
Dated November __, 1996
NATIONSBANK CORPORATION
as Sponsor
By:________________________
Accepted:
- ----------------------
Regular Trustee
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Preferred Security (other than a transfer of this Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) 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 Trust Company 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.
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Certificate Number Number of Preferred Securities
CUSIP NO. ___ ___ ___
Certificate Evidencing Preferred Securities
of
NB CAPITAL TRUST I
Trust Originated Preferred SecuritiesSM ("TOPrS"SM)
(liquidation amount $__ per Preferred Security)
A1-1
<PAGE>
NB CAPITAL TRUST I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_______________________ (the "Holder") is the registered owner of preferred
securities of the Trust repre senting undivided beneficial interests in the
assets of the Trust designated the ____% Trust Originated Preferred SecuritiesSM
(liquidation amount $__ 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 of
the Trust dated as of November __, 1996, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred Securities
Guarantee to the extent provided therein. The Declaration permits the Sponsor to
dissolve the Trust at any time. The Sponsor will provide a copy of the
Declaration, 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 and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certif icate
this ___ day of November, 1996.
NB CAPITAL TRUST I
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A1-2
<PAGE>
[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 stated liquidation
amount of $__ per Preferred Security, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distribu tions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Notes held by the Property
Trustee and to the extent the Property Trustee has funds available therefor. 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 for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Preferred Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ________, 199_, to
_________________. The Note Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Notes for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), provided that no Extension Period shall last beyond the
date of the maturity of the Notes. As a consequence of such deferral,
Distributions will also be de ferred hereunder for the same period. 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 Note Issuer may further extend such Extension Period;
provided that such Ex tension Period together with all such previous and further
exten sions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity of the Notes. Payments of accrued Distribu tions 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 Note Issuer may
commence a new Extension Period, subject to the above re quirements.
THE PREFERRED SECURITIES SHALL BE REDEEMABLE AS PROVID
ED IN THE DECLARATION.
A1-3
<PAGE>
---------------------
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 Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or partici
pation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NB CAPITAL TRUST I
Trust Originated Common Securities
(liquidation amount $__ per Common Security)
NB CAPITAL TRUST I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
NationsBank Corporation (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust desig nated the Trust Originated 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 trans fer. The designation, rights, privileges,
restrictions, prefer ences 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 of the Trust
dated as of November __, 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Declaration permits the Sponsor to dissolve the Trust at
any time. The Sponsor will provide a copy of the Declaration, the
A2-1
<PAGE>
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 and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of November, 1996.
NB CAPITAL TRUST I
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A2-2
<PAGE>
[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 stated liquidation amount
of $__ per Common Security, such rate being the rate of interest payable on the
Notes to be held by the Property Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distribu tions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Notes held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. 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 for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 30-day quarter.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ____________, 199_, to
Holders of record 15 days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Notes. The Note Issuer has the
right under the Indenture to defer payments of in terest by extending the
interest payment period from time to time on the Notes for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), provided that no
Extension Period shall last beyond the date of the maturity of the Note. As a
consequence of such deferral, Distributions will also be deferred hereunder for
the same period. 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 Note Issuer may further extend
such Extension Period; provided that such Exten sion Period together with all
such previous and further exten sions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity date of the Notes. Payments of accrued
Dis tributions 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 Note Issuer may commence a new Extension Period, subject
to the above re quirements.
THE COMMON SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN THE
DECLARATION.
A2-3
<PAGE>
---------------------
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 Guarantee*: ___________________________________
- --------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or partici pation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and Exchange
Act of 1934, as amended.
A2-4
<PAGE>
EXHIBIT 4.8
AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL TRUST II
Dated as of _________, 199_
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions...............................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..........................8
SECTION 2.2 Lists of Holders of Securities............................8
SECTION 2.3 Reports by the Property Trustee...........................9
SECTION 2.4 Periodic Reports to Property Trustee......................9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................9
SECTION 2.6 Events of Default; Waiver................................10
SECTION 2.7 Event of Default; Notice.................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.....................................................12
SECTION 3.2 Office..........................................12
SECTION 3.3 Purpose..................................................13
SECTION 3.4 Authority................................................13
SECTION 3.5 Title to Property of the Trust...........................13
SECTION 3.6 Powers and Duties of the Regular Trustees................13
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.................................................17
SECTION 3.8 Powers and Duties of the Property Trustee................18
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee.........................................20
SECTION 3.10 Certain Rights of Property Trustee.......................22
SECTION 3.11 Delaware Trustee.........................................25
SECTION 3.12 Execution of Documents...................................25
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities...............................................26
SECTION 3.14 Duration of Trust........................................26
SECTION 3.15 Mergers..................................................26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities..................28
SECTION 4.2 Responsibilities of the Sponsor..........................28
i
<PAGE>
Page
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees........................................29
SECTION 5.2 Qualifications of Delaware Trustee........................30
SECTION 5.3 Property Trustee; Eligibility.............................30
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally................................31
SECTION 5.5 Regular Trustees..........................................31
SECTION 5.6 Appointment of Delaware Trustee.
SECTION 5.7 Appointment, Removal and Resignation of
Trustees..................................................33
SECTION 5.8 Vacancies among Trustees..................................34
SECTION 5.9 Effect of Vacancies.......................................34
SECTION 5.10 Meetings..................................................35
SECTION 5.11 Delegation of Power.......................................35
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business....................................36
ARTICLE VI
0DISTRIBUTIONS
SECTION 6.1 Distributions.............................................36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities...................36
SECTION 7.2 Paying Agent.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust......................................38
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................................39
SECTION 9.2 Transfer of Certificates..................................39
SECTION 9.3 Deemed Security Holders...................................40
SECTION 9.4 Book-Entry Interests......................................40
SECTION 9.5 Notices to Clearing Agency................................41
SECTION 9.6 Appointment of Successor Clearing Agency..................41
SECTION 9.7 Definitive Preferred Security
Certificates ..............................41
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................42
ii
<PAGE>
Page
ARTICLE IX
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability..................................................43
SECTION 10.2 Exculpation................................................43
SECTION 10.3 Fiduciary Duty.............................................44
SECTION 10.4 Indemnification............................................45
SECTION 10.5 Outside Businesses.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year................................................49
SECTION 11.2 Certain Accounting Matters.................................49
SECTION 11.3 Banking....................................................50
SECTION 11.4 Withholding................................................50
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.................................................51
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent.........................................53
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee....................................................55
SECTION 13.2 Representations and Warranties of Delaware
Trustee....................................................56
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices....................................................56
SECTION 14.2 Governing Law..............................................58
SECTION 14.3 Intention of the Parties...................................58
SECTION 14.4 Headings...................................................58
SECTION 14.5 Successors and Assigns.....................................58
SECTION 14.6 Partial Enforceability.....................................58
SECTION 14.7 Counterparts; Acceptance...................................59
iii
<PAGE>
ANNEX I TERMS OF SECURITIES..............................I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE..........A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.............A2-1
EXHIBIT B SPECIMEN OF DEBENTURE............................B-1
EXHIBIT C UNDERWRITING AGREEMENT...........................C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a).......................................................... 5.3(a)
310(c).......................................................... Inapplicable
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(f).......................................................... Inapplicable
315(a).......................................................... 3.9(b)
315(c).......................................................... 3.9(a)
315(d).......................................................... 3.9(a)
316(a).......................................................... Annex I
316(c).......................................................... 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NB CAPITAL TRUST II
_________, 199_
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of _________, 199_, 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 Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established NB Capital
Trust II (the "Trust"), a trust under the Delaware Business Trust Act pursuant
to a Declaration of Trust dated as of October 29, 1996 and amended as of
_______, 199_ (the "Original Declaration"), and a Certificate of Trust filed
with the Secre tary of State of the State of Delaware on November 1, 1996, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Notes of the Note Issuer (each as defined herein);
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act (as
defined herein) and that this Declaration constitute the governing instrument of
such business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the 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.
<PAGE>
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 and Annex I and Exhibits A and B shall be a part of this
Declaration;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(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.
"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 Person that is
authorized to bind such Person.
"Book Entry" means a book entry by a Clearing Agency as
described in Section 9.4.
"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 Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or
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Charlotte, North Carolina are authorized or obligated by law, executive order or
regulation to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect Book-Entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects Book-Entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" under the
Underwriting 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 specified in
Section 7.1.(a).
"Common Securities Guarantee" means the guarantee agreement to
be dated as of _________, 199_ of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security 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, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
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Property 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, Floor 21 West, 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.
"Delaware Trustee" has the meaning set forth in Section
5.2.
"Definitive Preferred Security Certificates" has the
meaning set forth in Section 9.4.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Notes.
"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 10.4(b).
"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
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means the Indenture and First Supplemental
Indenture, each dated as of _________, 199_, among the Note Issuer and the Note
Trustee pursuant to which the Notes are to be issued.
"Investment Company" means an investment company as
defined in the Investment Company Act.
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"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section
3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class 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 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 Securities of
the relevant class.
"Ministerial Action" has the meaning set forth in the
terms of the Securities as set forth in Annex I.
"Note Issuer" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as issuer of the Notes under the Indenture.
"Note Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Notes" means the series of Notes to be issued by the Note
Issuer under the Indenture to be held by the Property Trustee.
"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 officer signing the Certifi-
cate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
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(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Paying Agent" has the meaning specified in Section
7.2.
"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" has the meaning specified in
Section 7.1.
"Preferred Securities Guarantee" means the guarantee agreement
to be dated as of _________, 199_, of the Sponsor 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 Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section
5.1.
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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.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated offi cers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"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.
"Sponsor" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Sec-
tion 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I
hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding 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 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 Securities of the relevant class.
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"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).
"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.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
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 Property 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
ss.ss. 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties 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.
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 Property Trustee (i)
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within 14 days after each record date for payment of Distributions, a
list, in such form as the Property Trustee may reasonably require, of
the names and addresses of the Holders of the Securities ("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 Property
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 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it
or which it receives in the capacity as Paying Agent (if acting in
such capacity) provided that the Property Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 31 of each year, the Property
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Inden ture Act in the form, in the manner and
at the times required by ss. 314 of the Trust Indenture Act.
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 Property 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
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in ss. 314(c) of the Trust Indenture Act. Any certificate or opinion required to
be given by an officer pursuant to ss. 314(c)(1) may be given in the form of an
Officers' Certificate.
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 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 under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Notes (a
"Super Majority") to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the
Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 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, any such
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) 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:
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(i) is not waivable under the Indenture, 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), the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Ma
jority to be waived, 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), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal
amount of the Notes outstanding;
provided further, 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 until 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 other wise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
ss.ss. 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) A waiver of an Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and
such ss. 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.
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SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all
defaults with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, unless such defaults have been cured
before the giving of such notice (the term "defaults" for the purposes
of this Section 2.7(a) being hereby defined to be an Event of Default
as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice
provided therein); provided that, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Section 5.01 of the
Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NB Capital Trust II," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. 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
NationsBank Corporation, NationsBank Corporate Center, 100 North Tryon Street,
23rd Floor, Charlotte, North Carolina 28255. On 10 Business Days written notice
to the Holders of Securities, the Regular Trustees may designate another
principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Notes, and (b) except as otherwise limited herein, 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 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, 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 and an action taken by the
Property 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 Notes
and the Property 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 Preferred Securities and the Common
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 a
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simultaneous issuance of both Preferred Securities and Com-
mon Securities on each Closing Date;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the
Sponsor, including any 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 State 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 New York Stock Exchange, Inc. or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing 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; and
(v) execute and enter into the Underwriting
Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Notes with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Notes to be held of
record in the name of the Property Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Tax Event; provided that the
Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining from taking any Ministerial Action
in relation to a Tax 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
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of ss.316(c) of the Trust Indenture Act, Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders
of Preferred Securities and Holders of Common 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;
(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 Property 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;
(j) to give the certificate required by ss. 314(a)(4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary or inciden
tal to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Note Issuer of its election
to defer payments of interest on the Notes by extending the interest
payment period under the Indenture;
(n) 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;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the
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Holders of the Preferred Securities or to enable the Trust
to effect the purposes for which the Trust was created;
(p) 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 Note Issuer to ensure
that the Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) 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.
The Regular Trustees must 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 Property 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 Note Issuer.
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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
Property Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause
the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Notes;
(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; or
(vii) other than as provided in this Amended and
Restated Declaration or Annex I, (A) direct the time, method
and place of exercising any trust or power conferred upon the
Note Trustee with respect to the Notes, (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 Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or
the Notes where such consent shall be required unless the
Trust shall have received an opinion of counsel to the effect
that such modification will not cause more than an
insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
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SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Property Trustee to the Notes shall vest automatically in each Person
who may hereafter be appointed as Property Trustee in accordance with
Section 5.7. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-in-
terest bearing trust account (the "Property Trustee Account")
in the name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as
that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent
the Notes 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
Notes to Holders of
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Securities upon the occurrence of certain special events (as
may be defined in the terms of the Securities) or other
specified circumstances pursuant to the terms of the
Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Declaration or
the Trust Indenture Act.
If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
Except as provided in this Section, the Holders of Preferred
Securities will not be able to exercise directly any other remedy
available to the holders of the Notes.
(f) The Property 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 of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been
appointed and has accepted that appointment in
accordance with Section 5.7.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Notes
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Property Trustee occurs and is continuing,
the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Notes subject to the
rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more
Persons (each, a "Paying Agent") to pay Distributions,
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redemption payments or liquidation payments on behalf of the Trust with
respect to all securities and any such Paying Agent shall comply with
ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be removed
by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property 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 Property
Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property 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 of the
Property Trustee has actual knowledge, the Property 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 Property 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
Property Trustee shall be determined solely by the
express provisions of this Declaration and the
Property Trustee shall not be liable except for the
performance of such duties and obliga-
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tions as are specifically set forth in this
Declaration, and no implied covenants or
obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration;
but in the case of any such certificates or
opinions that by any provision hereof are
specifically required to be furnished to the
Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall re
quire the Property 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 indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner
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as the Property Trustee deals with similar property for its
own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Notes or the payment of any
taxes or assessments levied thereon or in connection
therewith;
(vii) the Property 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. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be re-
sponsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under
this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) An application by the Property Trustee for
written instructions from the appropriate party or parties
may, at the option of the Property Trustee, set forth in
writing any action proposed to be taken or omitted by the
Property hereunder and the date on and/or after which such
action shall be taken or such omission shall be effective. The
Property Trustee shall not be liable for any action taken by,
or omission of, the Property Trustee in accordance with a
proposal included in such application on or after the date
specified in such application (which date shall
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not be less than three Business Days after the date the
appropriate party or parties actually receives such
application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the
Property Trustee shall have received written instructions in
response to such application specifying the action to be taken
or omitted;
(iii) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iv) whenever in the administration of this Dec
laration, the Property Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Property 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;
(v) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
(vi) the Property 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, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vii) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Declaration at the request or direction of any
Holder, unless such Holder shall have
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provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses and
the expenses of the Property 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 Property
Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee,
upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this
Declaration;
(viii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(ix) the Property 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 Property 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;
(x) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its
agents 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 Property 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 Property Trustee's or its agent's taking such action;
(xi) whenever in the administration of this Dec
laration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders
of the same proportion in
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liquidation amount of the Securities as would be entitled to
direct the Property 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 or
accordance with such instructions;
(xii) except as otherwise expressly provided by
this Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xiii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property 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 Property 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 Property 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 Property 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
ss. 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b),
including
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any amendments thereto, shall be signed by a majority of the
Regular Trustees.
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 terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from November 1, 1996.
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 substantially as an entirety to any corporation or other
body, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the
Regular Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as
such under the laws of any State; provided that:
(i) if the Trust is not the survivor, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obli-
gations of the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as
the Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Securities rank with respect to Distributions and
payments upon liquidation, redemption and
otherwise;
(ii) the Note Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same
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powers and duties as the Property Trustee as the Holder
of the Notes;
(iii) the Preferred Securities or any Successor
Securities which are Preferred Securities are listed, or any
Successor Securities of the Preferred 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 Preferred Securities (including
any Successor Securities of the Preferred Securities) to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect (other than
with respect to any dilution of such Holders' interests in
the new or successor entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose iden-
tical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation or replacement, the Sponsor 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, amal-
gamation or replacement does not adversely affect
the rights, preferences and privileges of the
Holders of the Securities (including any Successor
Securities) in any material respect (other than
with respect to any dilution of the Holders'
interest in the new 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 the
Successor Entity) will continue to
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be classified as a grantor trust for United
States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at least
to the extent provided by the Preferred Securities Guarantee
and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in 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 replacement would cause the Trust or Successor
Entity to be classified as other than 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
capital of the Trust, at the same time as the Preferred Securities are sold.
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 Com-
mission a registration statement 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 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 applica
tion to the New York Stock Exchange or any other national
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stock exchange or the Nasdaq National Market for listing
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
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Preferred
Securities.
In addition, the Sponsor shall have the right at any time to cause the
Trust to be dissolved and the Notes held by the Trust to be distributed to
Holders of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees of this Trust shall be five, and:
(a) at any time before the issuance of any Securi-
ties, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased 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; provided,
however, that, the number of Trustees shall in no event be less than
two; provided further that (1) 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");
(2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3)
one Trustee shall be the Property 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.
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SECTION 5.2 Qualifications of Delaware Trustee.
If required by the Business 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 Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; 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 Commission to act as a
Property 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
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 Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.7(c).
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(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in ss. 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions
of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first provision contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property 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.
After the date of this Declaration, the Regular Trustees shall
be:
John E. Mack
William L. Maxwell
Marc D. Oken
(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.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or 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 3.6,
provided, that, the registration statement referred to in Section 3.6,
including any amendments thereto, shall be signed by a majority of the
Regular Trustees; and
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(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 of Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
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SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), Trustees may be ap-
pointed 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) 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.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(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
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(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 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 Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment
by instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
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(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 Delaware Trustee or Successor
Property Trustee as the case may be if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property 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 Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
successor Delaware Trustee, as the case may be.
SECTION 5.8 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 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 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bank-
ruptcy, dissolution, liquidation, incompetence or incapacity to
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perform the duties of a Trustee shall not operate to 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 5.7,
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 5.10 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 law-
fully 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. Any
and all actions of the Regular Trustees also may be evidenced by a written
consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any 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 purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) 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
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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.
Section 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property 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 Property 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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property 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 (as defined herein) at the
times and in accordance with the applicable terms of the relevant Holder's
Securities. If and to the extent that the Note Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Notes held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property 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. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms.
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 representing
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undivided beneficial interests in the assets of the Trust having such
terms as are set forth in a completed designation of Terms in the form
attached as Annex I (the "Preferred Securities") and one class of
common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in a completed
designation of Terms in the form attached as Annex I (the "Common
Securities.") 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 Securities are subject to redemption as
provided in the designations of Terms.
(c) The Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual signature of any
present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Certificates shall cease to
be such Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be 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 typed, 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.
(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 non-assessable.
(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
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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, City of New York,
State of New York, an office or agency where the Preferred Securities may be
presented for payment ("Paying Agent). The Trust 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 Trust may change any Paying Agent without prior notice to any Holder.
The Trust shall notify the Property Trustee of the name and address of any Agent
not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent. The Trust shall
initially act as Paying Agent for the Preferred Securities and the Common
Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of disso-
lution or its equivalent with respect to the Sponsor; upon the
consent of a majority in liquidation amount of the Securities
voting together as a single class to dissolve the Trust or the
revocation of the Sponsor's charter and the expiration of 90
days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial
dissolution of the Holder of the Common Securities, the
Sponsor or the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance with
the terms of the Securities;
(v) At the election of the Sponsor at any time
pursuant to which the Trust shall have been dissolved
in accordance with the terms of the Securities and all
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of the Notes endorsed thereon shall have been distrib-
uted to the Holders of Securities in exchange for all
of the Securities; or
(vi) before the issuance of any Securities, with
the consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall, after satisfaction
of all obligations of the Trust, file a certificate of cancellation
with the Secretary of State of the State of Delaware and the Trust
shall terminate.
(c) The provisions of Section 3.9 and Article X
shall survive the termination of the Trust.
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. 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) The Sponsor may not transfer the Common Securi-
ties.
SECTION 9.2 Transfer of Certificates.
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 Certifi-
cate, the Regular Trustees shall cause one or more new Certificates to be
issued 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.
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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 trans-
feree shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
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 holder 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.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will be
issued in the form of one or more fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clear ing Agency, 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 Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive 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 (the "Definitive 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 Clearing Agency 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 the Preferred
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Preferred Security Beneficial Owners;
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(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 the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agree ments between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. DTC will make Book-Entry transfers among
the Clearing Agency Participants and receive and transmit payments of
Distribu tions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Pre ferred
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 Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its ser vices as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the Book-Entry system through the Clearing Agency
with respect to the Preferred Securities,
then:
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(c) Definitive Preferred Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. 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 Clearing Agency. The Definitive Preferred Security
Certificates shall be typed, 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 Certifi-
cates.
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
such security or indemnity as may be required by them to
keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, 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
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issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Otherwise, Definitive Preferred Security Certificates will
not be issued.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declara
tion, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations organized for profit under the General Corporation Law of
the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, respon sible 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 In
demnified 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 Per son's gross negligence (or
negligence in the case of the Trustee) 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 Trust and upon such information,
opinions, reports or statements
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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.
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 Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
lia bilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; 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
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 accept ed
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 Indem
nified Person at law or in equity or otherwise.
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(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 ex press
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 Note 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, adminis trative 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.
(ii) The Note 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
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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) actu ally 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, he shall be
indemnified, to the full 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 10.4(a) (unless ordered by a court) shall
be made by the Note Issuer only as autho rized 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 par ties 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
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investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a) shall be paid
by the Note 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 Note Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Note 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, or, 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 deter mination 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 proceed ing, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct
was unlaw ful. In no event shall any advance be made in
instanc es 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 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 Note 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 Note 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 obliga tions then existing.
(vii) The Note Issuer or the Trust may pur
chase and maintain insurance on behalf of any person
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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 Note 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 serv ing 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 Note Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Property Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the
income of such Fiduciary Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection
with the accep tance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investi gating any
claim or liability in connection with the exer cise or performance of
any of its powers or duties hereunder. The obligation to indemnify as
set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration.
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SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, indepen dently 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
indepen dent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the busi ness of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such oppor
tunity 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
Property 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
invest ment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property 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.
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 se lected by the Regular Trustees;
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(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, 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;
(c) The Regular Trustees shall cause to be duly pre pared and
delivered to each of the Holders of Securities, 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 re quired by the Code and the Treasury Regulations. Not
withstanding 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; and
(d) The Regular Trustees shall cause to be duly pre pared 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 re quired 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, howev er, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be depos ited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property 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
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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.
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 Declara tion may only be
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, pow
ers, duties, obligations or immunities of the Property
Trustee, the Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Dela
ware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such pur
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amend ment,
the Property 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 amend ment
which affects the rights, powers, duties, obli gations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
(A) an Officers' Certificate from each
of the Trust and the Sponsor that such amendment
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is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Se
curities); 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 amend
ment 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 af fect
the powers of the Property Trustee in con
travention of the Trust Indenture Act; or
(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 of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities;
(d) Section 9.1(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 con
sent of the Holders of a Majority in liquidation amount of
the Common Securities and;
(f) the rights of the holders of the Common Securi ties 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 Declara
tion may be amended without the consent of the Holders of
the Securities to:
(i) cure any ambiguity;
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(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) to conform to any change in Rule 3a-5 Act or
any 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, pref erences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision
of the Amended Declaration to such extent as may be necessary
to carry out its provisions, including making any redemption
of the Notes or dissolution of the Trust and distribution of
the Notes to the Holders of the Securities in exchange for all
of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Secu rities 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 Securi ties are entitled to act under the terms of
this Declara tion, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or ad
mitted for trading. The Regular Trustees shall call a meet ing 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 of Securities wish to
call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securi ties calling a
meeting shall specify in writing the Security Certificates held by the
Holders of Securities exercising the right to call a meeting and only
those Securities spec ified 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 ap
ply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to
all the Holders of Securities having a right to vote thereat
at least seven days and not more than 60 days before the date
of such meeting. Whenever a vote, consent or approval of the
Holders of Securities 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 of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be neces sary to authorize or take such action at a
meeting at which all Holders of Securities 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 of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written
ballot submitted to the Security Hold er 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 of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, in cluding 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 of Securities 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 of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Se
curities shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Decla
ration, the terms of the Securities, the Trust
Indenture Act or the listing rules of any stock
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exchange on which the Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating
to meetings of Holders of Securities, including notice of the
time, place or pur pose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the estab
lishment 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.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insol vency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the dis cretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with
or constitute a breach of the charter or by-laws of the
Property Trustee; and
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(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or feder al banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this Declaration.
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:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to per form its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trust ee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, morato rium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of wheth er the
enforcement of such remedies is considered in a proceeding in equity or
at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authori ty is required for the
execution, delivery or performance by the Delaware Trustee, of this
Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE 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
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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 of the Securities):
NB Capital Trust II
c/o NationsBank Corporation
Corporate Treasury
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: John E. Mack, Treasurer
Telecopy: (704) 386-0270
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securi ties):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
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):
NationsBank Corporation
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
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(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 deliv ered 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 hereun der
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 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 interpreta tion 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 appli cation of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the applica tion of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
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SECTION 14.7 Counterparts; Acceptance.
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.
Each Trustee, by its execution of a counterpart of this
Declaration, acknowledges and accepts its appointment as Trustee.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
----------------------------------
John E. Mack, as Regular Trustee
----------------------------------
William L. Maxwell, as Regular
Trustee
----------------------------------
Marc D. Oken, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
Name:
Title:
NATIONSBANK CORPORATION,
as Sponsor
By:
Name:
Title:
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ANNEX I
NB CAPITAL TRUST II
DESIGNATION OF TERMS OF
TRUST ORIGINATED PREFERRED SECURITIES AND
TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of _________, 199_ (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provi sions of the Preferred Securities and the
Common 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 such
Declaration, as defined in the Prospectus referred to be low):
1. Designation and Number.
(a) Preferred Securities. __________ Preferred Secu rities of
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of $___________________ and a liquidation amount with respect to the
assets of the Trust of $___ per preferred security, are hereby designated for
the purposes of identification only as "Trust Originated Preferred SecuritiesSM
('TOPrS'SM)" (the "Preferred Securities"). The Pre ferred 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 prac tice or
to conform to the rules of any stock exchange on which the Preferred Securities
are listed.
(b) Common Securities. ________ Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
$________________________ and a liqui dation amount with respect to the assets
of the Trust of $__ per common security, are hereby designated for the purposes
of identification only as "Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidenc ing 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.
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2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of _____% (the "Coupon Rate") of the stated liquidation amount of
$__ per Security, such rate being the rate of interest payable on the Notes to
be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distribu tions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Notes held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. 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 for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Securities will be cumula tive, will
accrue from _________, 199_, and will be payable quar terly in arrears, on March
31, June 30, September 30, and Decem ber 31 of each year, commencing on _______,
1996, except as otherwise described below. The Note Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Notes for a period not exceeding 20 consecutive
quarters (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Notes, provided that no Extension Period shall
last beyond the date of maturity of the Notes. As a consequence of such
deferral, Distributions will also be deferred hereunder for the same period.
Despite such deferral, quarterly Distribu tions 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 termi nation
of any such Extension Period, the Note 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 quarters or extend
beyond the maturity of the Notes. Payments of accrued 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 Note Issuer
may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of
the Trust on the relevant record dates. While the Preferred
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Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Notes. Subject to any applicable
laws and regula tions and the provisions of the Declaration, each such payment
in respect of the Preferred Securities will be made as described under the
heading "Description of the Preferred Securities -- Book-Entry Only Issuance --
The Depository Trust Company" in the Prospectus Supplement dated _________,
199_, to the Prospectus dated _________, 199_ (together, the "Prospectus"), of
the Trust included in the Registration Statement on Form S-3 of the Spon sor,
the Trust and certain other business trusts. The relevant record dates for the
Common Securities shall be the same record date as for the Preferred Securities.
If the Preferred Securi ties shall not continue to remain in book-entry only
form, the relevant record dates for the Preferred Securities shall be the March
15, June 15, September 15 and December 15 prior to the relevant payment dates,
which payment dates correspond to the interest payment dates on the Notes.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Note Issuer having failed to make
a payment under the Notes, will 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 or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on
the Securities is not a Busi ness Day, then payment of the Distribution 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 succeed ing 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) 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 (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary disso lution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors an amount
equal to the aggregate of the stated liquidation amount of $__ per Security plus
accrued and unpaid Distributions thereon to
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the date of payment (such amount being the "Liquidation Distribu tion"), unless,
in connection with such dissolution, winding-up or termination, Notes in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securi ties, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distri bution
can be paid only in part because the Trust has insuffi cient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
The Securities are subject to redemption at any time after November __,
20__ and in certain circumstances, following the occurrence of a Tax Event (as
defined below):
(a) Upon the repayment of the Notes in whole or in part,
whether at maturity or upon redemption (either at the option of the Note Issuer
at any time after November __, 20__ or pursuant to a Tax Event as described
below), the proceeds from such repayment or payment shall be simultaneously
applied to redeem Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Notes so repaid or redeemed at a redemption
price of $__ per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than 60
days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(c) If the Sponsor has given a notice of its election to
terminate the Trust, the Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors, cause Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment as, the Securities, to be distributed to the Holders of
the Securities in liquidation of such Holders' interests in the Securities
within 90 days following receipt of the Sponsor's notice of election.
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In the event of a Tax Event prior to ____, 20__, (as defined
below), the Note Issuer shall have the right at any time, upon not less than 30
nor more than 60 days notice, to redeem the Notes in whole but not in part for
cash within 90 days following the occurrence of such Tax Event, and, following
such redemption, Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Notes so redeemed shall be redeemed by the
Trust at the Redemption Price on a Pro Rata basis; provided, however, that, if
at the time there is available to the Note Issuer or the Trust the opportunity
to eliminate, within such 90 day period, the Tax Event by taking some
Ministerial Action (as defined below), the Trust or the Note Issuer will pursue
such Ministerial Action in lieu of redemption.
"Tax Event" means that (i) the Note Issuer shall have received
a Redemption Tax Opinion (as defined below) or (ii) the Regular Trustees shall
have been informed by a nationally recognized independent tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered. "Redemption Tax
Opinion" means an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that on or after the date of the
Prospectus Supplement, as a result of (a) any amendment to, clarification of or
change (including any an nounced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "Administrative Action") or (c) any amendment
to, clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after, the first date of issuance of the
Securities, there is more than an insubstantial risk that the Note Issuer would
be precluded from deducting the interest on the Notes for United States federal
income tax purposes even after the Notes were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust as described
in this Section 4(c); "No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Securities will not recognize any gain or loss
for United States federal income tax purposes as a result of the dissolution of
the Trust and the distribution of Notes; and "Ministerial Action"
I-5
<PAGE>
means some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Note Issuer, the Sponsor or the Holders of the Securities.
On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Notes to be delivered upon
such distribution and any certificates repre senting Securities, except for
certificates representing Pre ferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Notes having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distribu tions on such Securities until such certificates are
presented to the Note Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the out standing
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Notes are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Note Issuer will use its best
efforts to have the Notes listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities were listed immediately prior to the distri
bution of the Notes.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of, or notice of distri bution of
Notes in exchange for the Securities (a "Redemp tion/Distribution
Notice") will be given by the Trust by mail to each Holder of
Securities to be redeemed or ex changed 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 redemption of
the Notes. 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 of Securities. Each Redemption/Distri
bution Notice shall be addressed to the Holders of Securi
I-6
<PAGE>
ties at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemp tion/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 of Preferred Securities, it being
understood that, in respect of Pre ferred Securities registered in the
name of and held of record by the Depository or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the distri
bution of the proceeds of such redemption will be made to each Clearing
Agency 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
Notes are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Note Issuer
has paid the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities
and will give the Depository irrevocable instruc tions and authority to
pay the Redemption Price to the Hold ers of the Preferred Securities,
and (B) with respect to Preferred Securities issued in definitive form
and Common Securities, provided that the Note Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Notes, the Property Trustee will
pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a Redemp
tion/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 redemp tion will cease, except the right of the Holders of
such Securities to receive the Redemption Price, but without
I-7
<PAGE>
interest on such 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 improp
erly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Secu rities will continue to accrue
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 re demption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in re spect of the
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (in cluding,
without limitation, United States federal securi ties laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, 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) 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 this paragraph,
the Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceed ing for any remedy available to the Property Trustee,
or exercis ing any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property
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<PAGE>
Trustee, as holder of the Notes, to (i) exercise the remedies available under
the Indenture conducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided, however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Notes affected thereby, (a "Super Majority"), the
Property 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
Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Notes outstanding. The Property Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conduct ing any remedy available to the Property Trustee or
the Note Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Preferred
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action.
If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may, after a period of 30 days
has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Except as provided in this Section, the Holders of Preferred Securities will not
be able to exercise directly any other remedy available to the holders of the
Notes.
Any approval or direction of Holders of Preferred Secu rities
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 con sent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Pre ferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
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<PAGE>
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
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 Notes 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 enti tled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
I-10
<PAGE>
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) 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.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Preferred Securi ties has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this para graph, 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 Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declara tion, including (i) directing the time,
method, place of con ducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a Majority in
aggregate principal amount of Notes affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the written
direc tion 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 Notes outstanding. Pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of con ducting any remedy
available to the Property Trustee or the Note Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the directions of
the Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust on account of such action. If the Property Trustee
fails to enforce its rights under the Declaration, any Holder of Common
Securities may institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration,
I-11
<PAGE>
without first instituting a legal proceeding against the Property Trustee or any
other Person.
Any approval or direction of Holders of Common Securi ties 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 con sent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securi ties
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Notes 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 disso
lution, 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 at
least a Majority in liquidation amount of the Securities, affect ed thereby,
provided, however, if any amendment or proposal re ferred 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 a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Notes is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Notes, the
Property Trustee shall request the
I-12
<PAGE>
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 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 the
holders of a Super Majority, the Property 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 Notes outstanding; provided, further, that the Property
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
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
of Securities 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
under the Declaration 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 relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfac tion of all amounts owed to the Holders of the Preferred Securi ties,
to each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder 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 a
Declaration Event of Default occurs and is continu ing the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemp tion and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
I-13
<PAGE>
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securi ties, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guaran tee, respectively, including the
subordination provisions therein
and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
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.
Dated _________, 199_
NATIONSBANK CORPORATION
as Sponsor
By: _____________________________
Accepted:
- ----------------------
Regular Trustee
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Preferred Security (other than a transfer of this Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) 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 Trust Company 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.
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Certificate Number Number of Preferred Securities
CUSIP NO. ___ ___ ___
Certificate Evidencing Preferred Securities
of
NB CAPITAL TRUST II
Trust Originated Preferred SecuritiesSM ("TOPrS"SM)
(liquidation amount $__ per Preferred Security)
A1-1
<PAGE>
NB CAPITAL TRUST II, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_______________________ (the "Holder") is the registered owner of preferred
securities of the Trust repre senting undivided beneficial interests in the
assets of the Trust designated the ____% Trust Originated Preferred SecuritiesSM
(liquidation amount $__ 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 of
the Trust dated as of _________, 199_, as the same may be amended from time to
time (the "Declara tion"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capital ized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred Securities
Guarantee to the extent pro vided therein. The Declaration permits the Sponsor
to dissolve the Trust at any time. The Sponsor will provide a copy of the
Declaration, 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 and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certif icate
this ___ day of November, 1996.
NB CAPITAL TRUST II
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A1-2
<PAGE>
[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 stated liquidation
amount of $__ per Preferred Security, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distribu tions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Notes held by the Property
Trustee and to the extent the Property Trustee has funds available therefor. 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 for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Preferred Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ________, 199_, to
_________________. The Note Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Notes for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), provided that no Extension Period shall last beyond the
date of the maturity of the Notes. As a consequence of such deferral,
Distributions will also be de ferred hereunder for the same period. 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 Note Issuer may further extend such Extension Period;
provided that such Ex tension Period together with all such previous and further
exten sions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity of the Notes. Payments of accrued Distribu tions 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 Note Issuer may
commence a new Extension Period, subject to the above re quirements.
THE PREFERRED SECURITIES SHALL BE REDEEMABLE AS PROVID
ED IN THE DECLARATION.
A1-3
<PAGE>
---------------------
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 Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or partici
pation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NB CAPITAL TRUST II
Trust Originated Common Securities
(liquidation amount $__ per Common Security)
NB CAPITAL TRUST II, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
NationsBank Corporation (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust desig nated the Trust Originated 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 trans fer. The designation, rights, privileges,
restrictions, prefer ences 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 of the Trust
dated as of _________, 199_, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Declaration permits the Sponsor to dissolve the Trust at
any time. The Sponsor will provide a copy of the Declaration, the
A2-1
<PAGE>
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 and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of November, 1996.
NB CAPITAL TRUST II
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A2-2
<PAGE>
[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 stated liquidation amount
of $__ per Common Security, such rate being the rate of interest payable on the
Notes to be held by the Property Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distribu tions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Notes held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. 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 for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 30-day quarter.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ____________, 199_, to
Holders of record 15 days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Notes. The Note Issuer has the
right under the Indenture to defer payments of in terest by extending the
interest payment period from time to time on the Notes for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), provided that no
Extension Period shall last beyond the date of the maturity of the Note. As a
consequence of such deferral, Distributions will also be deferred hereunder for
the same period. 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 Note Issuer may further extend
such Extension Period; provided that such Exten sion Period together with all
such previous and further exten sions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity date of the Notes. Payments of accrued
Dis tributions 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 Note Issuer may commence a new Extension Period, subject
to the above re quirements.
THE COMMON SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN THE
DECLARATION.
A2-3
<PAGE>
---------------------
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 Guarantee*: ___________________________________
- --------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or partici pation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and Exchange
Act of 1934, as amended.
A2-4
<PAGE>
EXHIBIT 4.9
AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL Trust III
Dated as of _________, 199_
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................8
SECTION 2.2 Lists of Holders of Securities..............................8
SECTION 2.3 Reports by the Property Trustee.............................9
SECTION 2.4 Periodic Reports to Property Trustee........................9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................................9
SECTION 2.6 Events of Default; Waiver..................................10
SECTION 2.7 Event of Default; Notice...................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.......................................................12
SECTION 3.2 Office.....................................................12
SECTION 3.3 Purpose....................................................13
SECTION 3.4 Authority..................................................13
SECTION 3.5 Title to Property of the Trust.............................13
SECTION 3.6 Powers and Duties of the Regular Trustees..................13
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees...................................................17
SECTION 3.8 Powers and Duties of the Property Trustee..................18
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee...........................................20
SECTION 3.10 Certain Rights of Property Trustee.........................22
SECTION 3.11 Delaware Trustee...........................................25
SECTION 3.12 Execution of Documents.....................................25
SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities.................................................26
SECTION 3.14 Duration of Trust..........................................26
SECTION 3.15 Mergers....................................................26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.....................28
SECTION 4.2 Responsibilities of the Sponsor.............................28
i
<PAGE>
Page
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..........................................29
SECTION 5.2 Qualifications of Delaware Trustee..........................30
SECTION 5.3 Property Trustee; Eligibility...............................30
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally..................................31
SECTION 5.5 Regular Trustees............................................31
SECTION 5.6 Appointment of Delaware Trustee.
SECTION 5.7 Appointment, Removal and Resignation of
Trustees....................................................33
SECTION 5.8 Vacancies among Trustees....................................34
SECTION 5.9 Effect of Vacancies.........................................34
SECTION 5.10 Meetings....................................................35
SECTION 5.11 Delegation of Power.........................................35
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business......................................36
ARTICLE VI
0DISTRIBUTIONS
SECTION 6.1 Distributions...............................................36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.....................36
SECTION 7.2 Paying Agent.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust........................................38
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................................39
SECTION 9.2 Transfer of Certificates..................................39
SECTION 9.3 Deemed Security Holders...................................40
SECTION 9.4 Book-Entry Interests......................................40
SECTION 9.5 Notices to Clearing Agency................................41
SECTION 9.6 Appointment of Successor Clearing Agency..................41
SECTION 9.7 Definitive Preferred Security
Certificates ..............................41
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................42
ii
<PAGE>
Page
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................43
SECTION 10.2 Exculpation...............................................43
SECTION 10.3 Fiduciary Duty............................................44
SECTION 10.4 Indemnification...........................................45
SECTION 10.5 Outside Businesses.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year...............................................49
SECTION 11.2 Certain Accounting Matters................................49
SECTION 11.3 Banking...................................................50
SECTION 11.4 Withholding...............................................50
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................51
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent........................................53
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee...................................................55
SECTION 13.2 Representations and Warranties of Delaware
Trustee...................................................56
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...................................................56
SECTION 14.2 Governing Law.............................................58
SECTION 14.3 Intention of the Parties..................................58
SECTION 14.4 Headings..................................................58
SECTION 14.5 Successors and Assigns....................................58
SECTION 14.6 Partial Enforceability....................................58
SECTION 14.7 Counterparts; Acceptance..................................59
iii
<PAGE>
ANNEX I TERMS OF SECURITIES............................I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE.........A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE............A2-1
EXHIBIT B SPECIMEN OF DEBENTURE...........................B-1
EXHIBIT C UNDERWRITING AGREEMENT..........................C-1
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)........................................................ 5.3(a)
310(c)........................................................ Inapplicable
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(f)........................................................ Inapplicable
315(a)........................................................ 3.9(b)
315(c)........................................................ 3.9(a)
315(d)........................................................ 3.9(a)
316(a)........................................................ Annex I
316(c)........................................................ 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the inter pretation of any of its terms or
provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NB CAPITAL Trust III
_________, 199_
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of _________, 199_, 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 Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established NB Capital
Trust III (the "Trust"), a trust under the Delaware Busi ness Trust Act pursuant
to a Declaration of Trust dated as of October 29, 1996 and amended as of
________, 199_ (the "Original Declaration"), and a Certificate of Trust filed
with the Secre tary of State of the State of Delaware on November 1, 1996, for
the sole purpose of issuing and selling certain securities repre senting
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Notes of the Note Issuer (each as defined herein);
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act (as
defined herein) and that this Declaration constitute the governing instrument of
such business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the 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.
<PAGE>
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 Dec laration"
are to this Declaration as modified, supplemented or amended from time
to time and Annex I and Exhibits A and B shall be a part of this
Declaration;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sec tions of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(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.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereun der.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry" means a book entry by a Clearing Agency as
described in Section 9.4.
"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 Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or
2
<PAGE>
Charlotte, North Carolina are authorized or obligated by law, executive order or
regulation to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect Book-Entry transfers and pledges of the Preferred
Securi ties.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects Book-Entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" under the
Underwriting 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 Commis
sion.
"Common Securities" has the meaning specified in
Section 7.1.(a).
"Common Securities Guarantee" means the guarantee agreement to
be dated as of _________, 199_ of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security 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, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
3
<PAGE>
Property 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, Floor 21 West, 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.
"Delaware Trustee" has the meaning set forth in Section
5.2.
"Definitive Preferred Security Certificates" has the
meaning set forth in Section 9.4.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Notes.
"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 10.4(b).
"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
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means the Indenture and First Supplemental
Indenture, each dated as of _________, 199_, among the Note Issuer and the Note
Trustee pursuant to which the Notes are to be issued.
"Investment Company" means an investment company as
defined in the Investment Company Act.
4
<PAGE>
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section
3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securi ties or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class 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 aggre gate 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 percentag es are determined) of all outstanding Securities of
the relevant class.
"Ministerial Action" has the meaning set forth in the
terms of the Securities as set forth in Annex I.
"Note Issuer" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as issuer of the Notes under the Indenture.
"Note Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a suc cessor is appointed
thereunder, and thereafter means such succes sor trustee.
"Notes" means the series of Notes to be issued by the Note
Issuer under the Indenture to be held by the Property Trustee.
"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 officer signing the Certifi
cate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
5
<PAGE>
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Paying Agent" has the meaning specified in Section
7.2.
"Person" means a legal person, including any individu al,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorpo rated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in
Section 7.1.
"Preferred Securities Guarantee" means the guarantee agreement
to be dated as of _________, 199_, of the Sponsor 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 Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Property Trustee" means the Trustee meeting the eligi bility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section
5.1.
6
<PAGE>
"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.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice-president, any assis tant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated offi cers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particu lar 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.
"Sponsor" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Sec
tion 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I
hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
out standing Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemp tion, liquidation or otherwise, plus accrued
and unpaid Dis tributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
7
<PAGE>
"Treasury Regulations" means the income tax regula tions,
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 provi sions of succeeding regulations).
"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
provi sions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agree ment for
the offering and sale of Preferred Securities in the form of Exhibit C.
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 Property 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
ss.ss. 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securi ties as equity
securities representing undivided beneficial interests in the assets of
the Trust.
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 Property Trustee (i)
8
<PAGE>
within 14 days after each record date for payment of Distributions, a
list, in such form as the Property Trustee may reasonably require, of
the names and addresses of the Holders of the Securities ("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 Property
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 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it
or which it re ceives in the capacity as Paying Agent (if acting in
such capacity) provided that the Property Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obli gations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 31 of each year, the Property
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such docu ments, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Inden ture Act in the form, in the manner and
at the times required by ss. 314 of the Trust Indenture Act.
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 Property 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
9
<PAGE>
in ss. 314(c) of the Trust Indenture Act. Any certificate or opinion required to
be given by an officer pursuant to ss. 314(c)(1) may be given in the form of an
Officers' Certificate.
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 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 under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Notes (a
"Super Majority") to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the
Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 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, any such
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) 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:
10
<PAGE>
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Decla ration as
provided below in this Section 2.6(b), the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Ma
jority to be waived, 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), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal
amount of the Notes outstanding;
provided further, 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 consequenc es until 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 other wise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
ss.ss. 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 Inden ture 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) A waiver of an Event of Default under the Inden ture by
the Property Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and
such ss. 316(a)(1)(B) of the Trust Indenture Act is hereby express ly
excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
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SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all
defaults with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, unless such defaults have been cured
be fore the giving of such notice (the term "defaults" for the purposes
of this Section 2.7(a) being hereby defined to be an Event of Default
as defined in the Indenture, not in cluding any periods of grace
provided for therein and irre spective of the giving of any notice
provided therein); provided that, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Section 5.01 of the
Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NB Capital Trust III," as such name may be
modified from time to time by the Regular Trustees follow ing written notice to
the Holders of Securities. 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
NationsBank Corporation, NationsBank Corporate Center, 100 North Tryon Street,
23rd Floor, Charlotte, North Carolina 28255. On 10 Business Days written notice
to the Holders of Securities, the Regular Trustees may designate another
principal office.
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SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Notes, and (b) except as otherwise limited herein, 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 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, 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 and an action taken by the
Property 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 Notes
and the Property 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 undi vided 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 Preferred Securities and the Common
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 Securi
ties, and the issuance of Securities shall be limited to a
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simultaneous issuance of both Preferred Securities and Com
mon Securities on each Closing Date;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the
Sponsor, including any 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 State in which the Sponsor has
determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, pre pared by
the Sponsor, to the New York Stock Exchange, Inc. or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing 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; and
(v) execute and enter into the Underwriting
Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Notes with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Notes to be held of
record in the name of the Property Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Tax Event; provided that the
Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining from taking any Ministerial Action
in relation to a Tax 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
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of ss.316(c) of the Trust Indenture Act, Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders
of Preferred Securities and Holders of Common 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;
(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 Property 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;
(j) to give the certificate required by ss. 314(a)(4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary or inciden
tal to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Note Issuer of its election
to defer payments of interest on the Notes by extending the interest
payment period under the Inden ture;
(n) 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;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such exis tence is necessary to protect the
limited liability of the
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Holders of the Preferred Securities or to enable the Trust
to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trust ees determine in their
discretion to be necessary or desir able 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 Note Issuer to ensure
that the Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all appli cable tax
returns and tax information reports that are re quired to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
The Regular Trustees must 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 inconsis tent 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 Property 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 Note Issuer.
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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
Property Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause
the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Notes;
(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; or
(vii) other than as provided in this Amended and
Restated Declaration or Annex I, (A) direct the time, method
and place of exercising any trust or power conferred upon the
Note Trustee with respect to the Notes, (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 Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or
the Notes where such consent shall be required unless the
Trust shall have received an opinion of counsel to the effect
that such modification will not cause more than an
insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
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SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Property Trustee to the Notes shall vest automatically in each Person
who may hereafter be appointed as Property Trustee in accordance with
Section 5.7. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-in
terest bearing trust account (the "Property Trustee Ac count")
in the name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held
uninvested until dis bursed in accordance with this
Declaration. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securi ties by a
"nationally recognized statistical rating organization", as
that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the re demption of the
Preferred Securities and the Common Securities to the extent
the Notes are redeemed or ma ture; 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
Notes to Holders of
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Securities upon the occurrence of certain special events (as
may be defined in the terms of the Securi ties) or other
specified circumstances pursuant to the terms of the
Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's du ties and obligations under this Declaration or
the Trust Indenture Act.
If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
Except as provided in this Section, the Holders of Preferred
Securities will not be able to exercise directly any other remedy
available to the holders of the Notes.
(f) The Property 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 of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been
appointed and has accepted that appointment in
accordance with Section 5.7.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Notes
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Property Trustee occurs and is continuing,
the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Notes subject to the
rights of the Holders pursuant to the terms of such Securi ties.
(h) The Property Trustee may authorize one or more
Persons (each, a "Paying Agent") to pay Distributions,
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redemption payments or liquidation payments on behalf of the Trust with
respect to all securities and any such Paying Agent shall comply with
ss. 317(b) of the Trust Indenture Act. Any Paying Agent may be removed
by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the pur poses and functions
of the Trust set out in Section 3.3, and the Property 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 Property
Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property 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 of the
Property Trustee has actual knowledge, the Property 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 exer cise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be con strued to
relieve the Property 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 De fault
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and the
Property Trustee shall not be liable except for the
performance of such duties and obliga-
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tions as are specifically set forth in this
Declaration, and no implied covenants or obliga
tions shall be read into this Declaration against
the Property Trustee; and
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certifi cates or
opinions furnished to the Property 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
Property Trustee, the Property Trustee shall be
under a duty to examine the same to de termine
whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Re sponsible
Officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall re
quire the Property 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 exer cise 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 indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with re spect
to the custody, safe keeping and physical pres ervation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner
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as the Property Trustee deals with similar property for its
own account, subject to the protections and limita tions on
liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuine ness,
existence or sufficiency of the Notes or the payment of any
taxes or assessments levied thereon or in connection
therewith;
(vii) the Property 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. Money held by the
Property Trustee need not be segre gated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be re
sponsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under
this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, state ment, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document be lieved by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) An application by the Property Trustee for
written instructions from the appropriate party or parties
may, at the option of the Property Trustee, set forth in
writing any action proposed to be taken or omitted by the
Property hereunder and the date on and/or after which such
action shall be taken or such omission shall be effective. The
Property Trustee shall not be liable for any action taken by,
or omission of, the Property Trustee in accordance with a
proposal included in such application on or after the date
specified in such application (which date shall
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not be less than three Business Days after the date the
appropriate party or parties actually receives such
application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the
Property Trustee shall have received written instructions in
response to such application specifying the action to be taken
or omitted;
(iii) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Cer tificate;
(iv) whenever in the administration of this Dec
laration, the Property Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Property 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;
(v) the Property Trustee shall have no duty to see
to any recording, filing or registration of any in strument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
(vi) the Property Trustee may consult with coun sel
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, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdic tion;
(vii) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Declaration at the request or direction of any
Holder, unless such Holder shall have
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provided to the Property Trustee security and indem nity,
reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses and
the expenses of the Property 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 Property
Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee,
upon the occur rence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this
Declaration;
(viii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direc tion, consent, order, bond,
debenture, note, other evi dence of indebtedness or other
paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(ix) the Property 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 Property 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;
(x) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its
agents alone shall be suffi cient and effective to perform any
such action and no third party shall be required to inquire as
to the authority of the Property 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 Property Trustee's or its agent's taking such action;
(xi) whenever in the administration of this Dec
laration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders
of the same proportion in
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liquidation amount of the Securities as would be enti tled to
direct the Property Trustee under the terms of the Securities
in respect of such remedy, right or ac tion, (ii) may refrain
from enforcing such remedy or right or taking such other
action until such in structions are received, and (iii) shall
be protected in conclusively relying on or acting in or
accordance with such instructions;
(xii) except as otherwise expressly provided by
this Declaration, the Property Trustee shall not be under any
obligation to take any action that is discre tionary under the
provisions of this Declaration; and
(xiii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property 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 Property 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 Property 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 enti tled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property 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
ss. 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b),
including
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any amendments thereto, shall be signed by a majority of the
Regular Trustees.
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 correct ness. 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 sufficien cy of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from November 1, 1996.
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 substantially as an entirety to any corporation or other
body, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the
Regular Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as
such under the laws of any State; provided that:
(i) if the Trust is not the survivor, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obli
gations of the Trust under the Securities; or
(B) substitutes for the Securities oth er
securities having substantially the same terms as
the Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Securities rank with re spect to Distributions and
payments upon liquidation, redemption and
otherwise;
(ii) the Note Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same
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powers and duties as the Property Trustee as the Holder
of the Notes;
(iii) the Preferred Securities or any Succes sor
Securities which are Preferred Securities are listed, or any
Successor Securities of the Preferred Securities will be
listed upon notification of issu ance, 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 Preferred Securities (including
any Successor Securities of the Preferred Securities) to be
downgraded by any nationally recog nized statistical rating
organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, pref erences
and privileges of the Holders of the Securi ties (including
any Successor Securities) in any material respect (other than
with respect to any dilu tion of such Holders' interests in
the new or successor entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose iden
tical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation or replacement, the Sponsor 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, amal
gamation or replacement does not adversely affect
the rights, preferences and privileges of the
Holders of the Securities (including any Successor
Securities) in any material respect (other than
with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolida tion,
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 the
Successor Entity) will continue to
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be classified as a grantor trust for United
States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at least
to the extent provided by the Preferred Securi ties Guarantee
and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquida tion 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,
amal gamation, merger or replacement would cause the Trust or Successor
Entity to be classified as other than 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
capital of the Trust, at the same time as the Preferred Securities are sold.
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 Com
mission a registration statement on Form S-3 in relation to
the Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appro priate
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 States;
(c) to prepare for filing by the Trust an applica
tion to the New York Stock Exchange or any other national
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stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Com mission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Preferred
Securities.
In addition, the Sponsor shall have the right at any time to cause the
Trust to be dissolved and the Notes held by the Trust to be distributed to
Holders of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees of this Trust shall be five, and:
(a) at any time before the issuance of any Securi
ties, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased 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; provided,
however, that, the number of Trustees shall in no event be less than
two; provided further that (1) 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");
(2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3)
one Trustee shall be the Property 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.
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SECTION 5.2 Qualifications of Delaware Trustee.
If required by the Business 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 Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the re quirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing busi ness
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 a
Property 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
5.3(a)(ii), the combined capital and sur plus of such
corporation shall be deemed to be its com bined capital and
surplus as set forth in its most re cent report of condition
so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.7(c).
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(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in ss. 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions
of ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first provision contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property 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.
After the date of this Declaration, the Regular Trustees shall
be:
John E. Mack
William L. Maxwell
Marc D. Oken
(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.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable
law, any Regular Trustee is autho rized 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 3.6,
provided, that, the registration statement referred to in Section 3.6,
including any amendments thereto, shall be signed by a majority of the
Regular Trustees; and
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(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 of Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
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SECTION 5.7 Appointment, Removal and Resignation of Trust-
ees.
(a) Subject to Section 5.7(b), Trustees may be ap
pointed 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) 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.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor Property
Trustee has been appointed and has ac cepted such appointment by
written instrument executed by such Successor Property Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(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
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(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 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 Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such ap pointment
by instrument executed by such Suc cessor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
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(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 Delaware Trustee or Successor
Property Trustee as the case may be if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property 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 Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
successor Delaware Trustee, as the case may be.
SECTION 5.8 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 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 evi dence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bank
ruptcy, dissolution, liquidation, incompetence or incapacity to
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perform the duties of a Trustee shall not operate to 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 5.7,
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 Decla ration.
SECTION 5.10 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 law
fully 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. Any
and all actions of the Regular Trustees also may be evidenced by a written
consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natu ral person over the age
of 21 his or her power for the pur pose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Regular Trustees shall have power to dele gate from
time to time to such of their number or to officers of the Trust the
doing of such things and the
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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.
Section 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property 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 Property 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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property 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 (as defined herein) at the
times and in accordance with the applicable terms of the relevant Holder's
Securities. If and to the extent that the Note Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Notes held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property 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. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms.
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 representing
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undivided beneficial interests in the assets of the Trust having such
terms as are set forth in a completed designation of Terms in the form
attached as Annex I (the "Preferred Securities") and one class of
common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in a completed
designation of Terms in the form attached as Annex I (the "Common
Securities.") 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 Securities are subject to redemption as
provided in the designations of Terms.
(c) The Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual signature of any
present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Certificates shall cease to
be such Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Cer tificates 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
Secu rity, 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. Certifi cates shall be typed, printed,
lithographed or engraved or may be produced in any other manner as is
reasonably ac ceptable 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.
(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 non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accor dance with the terms of
this Declaration, shall be deemed to
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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, City of New York,
State of New York, an office or agency where the Preferred Securities may be
presented for payment ("Paying Agent). The Trust 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 Trust may change any Paying Agent without prior notice to any Holder.
The Trust shall notify the Property Trustee of the name and address of any Agent
not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent. The Trust shall
initially act as Paying Agent for the Preferred Securities and the Common
Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of disso
lution or its equivalent with respect to the Sponsor; upon the
consent of a majority in liquidation amount of the Securities
voting together as a single class to dissolve the Trust or the
revocation of the Sponsor's charter and the expiration of 90
days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial
dissolution of the Holder of the Common Securities, the
Sponsor or the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance with
the terms of the Securities;
(v) At the election of the Sponsor at any time
pursuant to which the Trust shall have been dissolved
in accordance with the terms of the Securities and all
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of the Notes endorsed thereon shall have been distrib
uted to the Holders of Securities in exchange for all
of the Securities; or
(vi) before the issuance of any Securities, with
the consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall, after satisfaction
of all obligations of the Trust, file a certificate of cancellation
with the Secretary of State of the State of Delaware and the Trust
shall terminate.
(c) The provisions of Section 3.9 and Article X
shall survive the termination of the Trust.
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 Secu rities. 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) The Sponsor may not transfer the Common Securi
ties.
SECTION 9.2 Transfer of Certificates.
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 indem nity 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 Certifi
cate, the Regular Trustees shall cause one or more new Certifi cates to be
issued 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.
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Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certifi cate shall be entitled to the
rights and subject to the obliga tions of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each trans
feree shall be deemed to have agreed to be bound by this Declara tion.
SECTION 9.3 Deemed Security Holders.
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 holder of such Certificate and of the Securi ties represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accord ingly, 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.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the Pre ferred
Securities, the Preferred Securities Certificates, on original issuance, will be
issued in the form of one or more fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clear ing Agency, by, or on behalf of, the Trust. Such Global Certifi cates
shall initially be registered on the books and records of the Trust in the name
of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certifi cates,
except as provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive 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 Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or con sents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Preferred Security Beneficial Owners;
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(c) to the extent that the provisions of this Sec tion 9.4
conflict with any other provisions of this Declara tion, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agree ments between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. DTC will make Book-Entry transfers among
the Clearing Agency Participants and receive and transmit payments of
Distribu tions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Pre ferred
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 Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Pre ferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its ser vices as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the Book-Entry system through the Clearing Agency
with respect to the Preferred Securities,
then:
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(c) Definitive Preferred Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. 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 Clearing Agency. The Definitive Preferred Security
Certificates shall be typed, 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 desig nation
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 Certifi
cates.
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
such security or indemnity as may be required by them to
keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certifi cate, 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
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issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Otherwise, Definitive Preferred Security Certificates will
not be issued.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declara
tion, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations organized for profit under the General Corporation Law of
the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, respon sible 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 In
demnified 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 Per son's gross negligence (or
negligence in the case of the Trustee) 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 Trust and upon such information,
opinions, reports or statements
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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.
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 Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
lia bilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; 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
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 accept ed
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 Indem
nified Person at law or in equity or otherwise.
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(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 ex press
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 Note 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, adminis trative 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.
(ii) The Note 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
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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) actu ally 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, he shall be
indemnified, to the full 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 10.4(a) (unless ordered by a court) shall
be made by the Note Issuer only as autho rized 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 par ties 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
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investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a) shall be paid
by the Note 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 Note Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Note 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, or, 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 deter mination 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 proceed ing, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct
was unlaw ful. In no event shall any advance be made in
instanc es 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 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 Note 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 Note 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 obliga tions then existing.
(vii) The Note Issuer or the Trust may pur
chase and maintain insurance on behalf of any person
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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 Note 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 serv ing 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 Note Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Property Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the
income of such Fiduciary Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection
with the accep tance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investi gating any
claim or liability in connection with the exer cise or performance of
any of its powers or duties hereunder. The obligation to indemnify as
set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration.
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SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, indepen dently 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
indepen dent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the busi ness of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such oppor
tunity 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
Property 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
invest ment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property 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.
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 se lected by the Regular Trustees;
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(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, 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;
(c) The Regular Trustees shall cause to be duly pre pared and
delivered to each of the Holders of Securities, 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 re quired by the Code and the Treasury Regulations. Not
withstanding 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; and
(d) The Regular Trustees shall cause to be duly pre pared 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 re quired 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, howev er, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be depos ited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property 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
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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.
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 Declara tion may only be
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, pow
ers, duties, obligations or immunities of the Property
Trustee, the Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Dela
ware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such pur
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amend ment,
the Property 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 amend ment
which affects the rights, powers, duties, obli gations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
(A) an Officers' Certificate from each
of the Trust and the Sponsor that such amendment
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is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Se
curities); 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 amend
ment 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 af fect
the powers of the Property Trustee in con
travention of the Trust Indenture Act; or
(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 of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities;
(d) Section 9.1(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 con
sent of the Holders of a Majority in liquidation amount of
the Common Securities and;
(f) the rights of the holders of the Common Securi ties 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 Declara
tion may be amended without the consent of the Holders of
the Securities to:
(i) cure any ambiguity;
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(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) to conform to any change in Rule 3a-5 Act or
any 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, pref erences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision
of the Amended Declaration to such extent as may be necessary
to carry out its provisions, including making any redemption
of the Notes or dissolution of the Trust and distribution of
the Notes to the Holders of the Securities in exchange for all
of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Secu rities 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 Securi ties are entitled to act under the terms of
this Declara tion, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or ad
mitted for trading. The Regular Trustees shall call a meet ing 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 of Securities wish to
call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securi ties calling a
meeting shall specify in writing the Security Certificates held by the
Holders of Securities exercising the right to call a meeting and only
those Securities spec ified 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 ap
ply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to
all the Holders of Securities having a right to vote thereat
at least seven days and not more than 60 days before the date
of such meeting. Whenever a vote, consent or approval of the
Holders of Securities 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 of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be neces sary to authorize or take such action at a
meeting at which all Holders of Securities 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 of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written
ballot submitted to the Security Hold er 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 of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, in cluding 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 of Securities 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 of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Se
curities shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Decla
ration, the terms of the Securities, the Trust
Indenture Act or the listing rules of any stock
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exchange on which the Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating
to meetings of Holders of Securities, including notice of the
time, place or pur pose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the estab
lishment 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.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insol vency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the dis cretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with
or constitute a breach of the charter or by-laws of the
Property Trustee; and
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(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or feder al banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this Declaration.
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:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to per form its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trust ee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, morato rium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of wheth er the
enforcement of such remedies is considered in a proceeding in equity or
at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authori ty is required for the
execution, delivery or performance by the Delaware Trustee, of this
Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE 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
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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 of the Securities):
NB Capital Trust III
c/o NationsBank Corporation
Corporate Treasury
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: John E. Mack, Treasurer
Telecopy: (704) 386-0270
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securi ties):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
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):
NationsBank Corporation
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
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(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 deliv ered 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 hereun der
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 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 interpreta tion 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 appli cation of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the applica tion of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
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SECTION 14.7 Counterparts; Acceptance.
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.
Each Trustee, by its execution of a counterpart of this
Declaration, acknowledges and accepts its appointment as Trustee.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
----------------------------------
John E. Mack, as Regular Trustee
----------------------------------
William L. Maxwell, as Regular
Trustee
----------------------------------
Marc D. Oken, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
Name:
Title:
NATIONSBANK CORPORATION,
as Sponsor
By:
Name:
Title:
60
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ANNEX I
NB CAPITAL Trust III
DESIGNATION OF TERMS OF
TRUST ORIGINATED PREFERRED SECURITIES AND
TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of _________, 199_ (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provi sions of the Preferred Securities and the
Common 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 such
Declaration, as defined in the Prospectus referred to be low):
1. Designation and Number.
(a) Preferred Securities. __________ Preferred Secu rities of
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of $___________________ and a liquidation amount with respect to the
assets of the Trust of $___ per preferred security, are hereby designated for
the purposes of identification only as "Trust Originated Preferred SecuritiesSM
('TOPrS'SM)" (the "Preferred Securities"). The Pre ferred 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 prac tice or
to conform to the rules of any stock exchange on which the Preferred Securities
are listed.
(b) Common Securities. ________ Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
$________________________ and a liqui dation amount with respect to the assets
of the Trust of $__ per common security, are hereby designated for the purposes
of identification only as "Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidenc ing 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.
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2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of _____% (the "Coupon Rate") of the stated liquidation amount of
$__ per Security, such rate being the rate of interest payable on the Notes to
be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distribu tions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Notes held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. 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 for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Securities will be cumula tive, will
accrue from _________, 199_, and will be payable quar terly in arrears, on March
31, June 30, September 30, and Decem ber 31 of each year, commencing on _______,
1996, except as otherwise described below. The Note Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Notes for a period not exceeding 20 consecutive
quarters (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Notes, provided that no Extension Period shall
last beyond the date of maturity of the Notes. As a consequence of such
deferral, Distributions will also be deferred hereunder for the same period.
Despite such deferral, quarterly Distribu tions 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 termi nation
of any such Extension Period, the Note 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 quarters or extend
beyond the maturity of the Notes. Payments of accrued 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 Note Issuer
may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of
the Trust on the relevant record dates. While the Preferred
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Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Notes. Subject to any applicable
laws and regula tions and the provisions of the Declaration, each such payment
in respect of the Preferred Securities will be made as described under the
heading "Description of the Preferred Securities -- Book-Entry Only Issuance --
The Depository Trust Company" in the Prospectus Supplement dated _________,
199_, to the Prospectus dated _________, 199_ (together, the "Prospectus"), of
the Trust included in the Registration Statement on Form S-3 of the Spon sor,
the Trust and certain other business trusts. The relevant record dates for the
Common Securities shall be the same record date as for the Preferred Securities.
If the Preferred Securi ties shall not continue to remain in book-entry only
form, the relevant record dates for the Preferred Securities shall be the March
15, June 15, September 15 and December 15 prior to the relevant payment dates,
which payment dates correspond to the interest payment dates on the Notes.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Note Issuer having failed to make
a payment under the Notes, will 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 or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on
the Securities is not a Busi ness Day, then payment of the Distribution 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 succeed ing 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) 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 (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary disso lution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors an amount
equal to the aggregate of the stated liquidation amount of $__ per Security plus
accrued and unpaid Distributions thereon to
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the date of payment (such amount being the "Liquidation Distribu tion"), unless,
in connection with such dissolution, winding-up or termination, Notes in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securi ties, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distri bution
can be paid only in part because the Trust has insuffi cient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
The Securities are subject to redemption at any time after November __,
20__ and in certain circumstances, following the occurrence of a Tax Event (as
defined below):
(a) Upon the repayment of the Notes in whole or in part,
whether at maturity or upon redemption (either at the option of the Note Issuer
at any time after November __, 20__ or pursuant to a Tax Event as described
below), the proceeds from such repayment or payment shall be simultaneously
applied to redeem Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Notes so repaid or redeemed at a redemption
price of $__ per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than 60
days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(c) If the Sponsor has given a notice of its election to
terminate the Trust, the Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors, cause Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment as, the Securities, to be distributed to the Holders of
the Securities in liquidation of such Holders' interests in the Securities
within 90 days following receipt of the Sponsor's notice of election.
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In the event of a Tax Event prior to ____, 20__, (as defined
below), the Note Issuer shall have the right at any time, upon not less than 30
nor more than 60 days notice, to redeem the Notes in whole but not in part for
cash within 90 days following the occurrence of such Tax Event, and, following
such redemption, Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Notes so redeemed shall be redeemed by the
Trust at the Redemption Price on a Pro Rata basis; provided, however, that, if
at the time there is available to the Note Issuer or the Trust the opportunity
to eliminate, within such 90 day period, the Tax Event by taking some
Ministerial Action (as defined below), the Trust or the Note Issuer will pursue
such Ministerial Action in lieu of redemption.
"Tax Event" means that (i) the Note Issuer shall have received
a Redemption Tax Opinion (as defined below) or (ii) the Regular Trustees shall
have been informed by a nationally recognized independent tax counsel that a No
Recognition Opinion (as defined below) cannot be delivered. "Redemption Tax
Opinion" means an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that on or after the date of the
Prospectus Supplement, as a result of (a) any amendment to, clarification of or
change (including any an nounced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "Administrative Action") or (c) any amendment
to, clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after, the first date of issuance of the
Securities, there is more than an insubstantial risk that the Note Issuer would
be precluded from deducting the interest on the Notes for United States federal
income tax purposes even after the Notes were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust as described
in this Section 4(c); "No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Securities will not recognize any gain or loss
for United States federal income tax purposes as a result of the dissolution of
the Trust and the distribution of Notes; and "Ministerial Action"
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means some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Note Issuer, the Sponsor or the Holders of the Securities.
On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Notes to be delivered upon
such distribution and any certificates repre senting Securities, except for
certificates representing Pre ferred Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Notes having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distribu tions on such Securities until such certificates are
presented to the Note Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the out standing
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Notes are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Note Issuer will use its best
efforts to have the Notes listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities were listed immediately prior to the distri
bution of the Notes.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of, or notice of distri bution of
Notes 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 ex changed 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 redemption of
the Notes. 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 of Securities. Each Redemption/Distri-
bution Notice shall be addressed to the Holders of Securi-
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ties 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 of Preferred Securities, it being
understood that, in respect of Pre ferred Securities registered in the
name of and held of record by the Depository or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the distri
bution of the proceeds of such redemption will be made to each Clearing
Agency 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
Notes are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Note Issuer
has paid the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Preferred Securities
and will give the Depository irrevocable instruc tions and authority to
pay the Redemption Price to the Hold ers of the Preferred Securities,
and (B) with respect to Preferred Securities issued in definitive form
and Common Securities, provided that the Note Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Notes, the Property Trustee will
pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the
books and records of the Trust on the redemption date. If a Redemp
tion/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 redemp tion will cease, except the right of the Holders of
such Securities to receive the Redemption Price, but without
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interest on such 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 improp
erly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Secu rities will continue to accrue
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 re demption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in re spect of the
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (in cluding,
without limitation, United States federal securi ties laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, 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) 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 this paragraph,
the Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceed ing for any remedy available to the Property Trustee,
or exercis ing any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property
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Trustee, as holder of the Notes, to (i) exercise the remedies available under
the Indenture conducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided, however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Notes affected thereby, (a "Super Majority"), the
Property 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
Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Notes outstanding. The Property Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conduct ing any remedy available to the Property Trustee or
the Note Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Preferred
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action.
If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may, after a period of 30 days
has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Except as provided in this Section, the Holders of Preferred Securities will not
be able to exercise directly any other remedy available to the holders of the
Notes.
Any approval or direction of Holders of Preferred Secu rities
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 con sent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Pre ferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are
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entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
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 Notes 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 enti tled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
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6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) 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.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Preferred Securi ties has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this para graph, 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 Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declara tion, including (i) directing the time,
method, place of con ducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a Majority in
aggregate principal amount of Notes affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the written
direc tion 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 Notes outstanding. Pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of con ducting any remedy
available to the Property Trustee or the Note Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the directions of
the Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust on account of such action. If the Property Trustee
fails to enforce its rights under the Declaration, any Holder of Common
Securities may institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration,
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without first instituting a legal proceeding against the Property Trustee or any
other Person.
Any approval or direction of Holders of Common Securi ties 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 con sent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securi ties
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Notes 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 disso
lution, 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 at
least a Majority in liquidation amount of the Securities, affect ed thereby,
provided, however, if any amendment or proposal re ferred 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 a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Notes is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Notes, the
Property Trustee shall request the
I-12
<PAGE>
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 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 the
holders of a Super Majority, the Property 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 Notes outstanding; provided, further, that the Property
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
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
of Securities 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
under the Declaration 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 relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfac tion of all amounts owed to the Holders of the Preferred Securi ties,
to each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder 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 a
Declaration Event of Default occurs and is continu ing the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemp tion and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
I-13
<PAGE>
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securi ties, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guaran tee, respectively, including the
subordination provisions therein
and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
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.
Dated _________, 199_
NATIONSBANK CORPORATION
as Sponsor
By: ________________________________
Accepted:
- ----------------------
Regular Trustee
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
This Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Preferred Security (other than a transfer of this Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) 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 Trust Company 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.
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Certificate Number Number of Preferred Securities
CUSIP NO. ___ ___ ___
Certificate Evidencing Preferred Securities
of
NB CAPITAL Trust III
Trust Originated Preferred SecuritiesSM ("TOPrS"SM)
(liquidation amount $__ per Preferred Security)
A1-1
<PAGE>
NB CAPITAL Trust III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_______________________ (the "Holder") is the registered owner of preferred
securities of the Trust repre senting undivided beneficial interests in the
assets of the Trust designated the ____% Trust Originated Preferred SecuritiesSM
(liquidation amount $__ 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 of
the Trust dated as of _________, 199_, as the same may be amended from time to
time (the "Declara tion"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capital ized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred Securities
Guarantee to the extent pro vided therein. The Declaration permits the Sponsor
to dissolve the Trust at any time. The Sponsor will provide a copy of the
Declaration, 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 and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certif icate
this ___ day of November, 1996.
NB CAPITAL Trust III
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A1-2
<PAGE>
[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 stated liquidation
amount of $__ per Preferred Security, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distribu tions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Notes held by the Property
Trustee and to the extent the Property Trustee has funds available therefor. 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 for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Preferred Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ________, 199_, to
_________________. The Note Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Notes for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), provided that no Extension Period shall last beyond the
date of the maturity of the Notes. As a consequence of such deferral,
Distributions will also be de ferred hereunder for the same period. 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 Note Issuer may further extend such Extension Period;
provided that such Ex tension Period together with all such previous and further
exten sions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity of the Notes. Payments of accrued Distribu tions 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 Note Issuer may
commence a new Extension Period, subject to the above re quirements.
THE PREFERRED SECURITIES SHALL BE REDEEMABLE AS PROVID
ED IN THE DECLARATION.
A1-3
<PAGE>
---------------------
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 Guarantee*: ___________________________________
- --------
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or partici
pation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A1-4
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NB CAPITAL Trust III
Trust Originated Common Securities
(liquidation amount $__ per Common Security)
NB CAPITAL Trust III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
NationsBank Corporation (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust desig nated the Trust Originated 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 trans fer. The designation, rights, privileges,
restrictions, prefer ences 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 of the Trust
dated as of _________, 199_, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Declaration permits the Sponsor to dissolve the Trust at
any time. The Sponsor will provide a copy of the Declaration, the
A2-1
<PAGE>
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 and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of November, 1996.
NB CAPITAL Trust III
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A2-2
<PAGE>
[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 stated liquidation amount
of $__ per Common Security, such rate being the rate of interest payable on the
Notes to be held by the Property Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distribu tions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Notes held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. 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 for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 30-day quarter.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ____________, 199_, to
Holders of record 15 days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Notes. The Note Issuer has the
right under the Indenture to defer payments of in terest by extending the
interest payment period from time to time on the Notes for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), provided that no
Extension Period shall last beyond the date of the maturity of the Note. As a
consequence of such deferral, Distributions will also be deferred hereunder for
the same period. 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 Note Issuer may further extend
such Extension Period; provided that such Exten sion Period together with all
such previous and further exten sions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity date of the Notes. Payments of accrued
Dis tributions 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 Note Issuer may commence a new Extension Period, subject
to the above re quirements.
THE COMMON SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN THE
DECLARATION.
A2-3
<PAGE>
---------------------
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 Guarantee*: ___________________________________
- --------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or partici pation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and Exchange
Act of 1934, as amended.
A2-4
<PAGE>
ex49.
<PAGE>
EXHIBIT 4.10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NATIONSBANK CORPORATION
------------------------------
------------------------------
INDENTURE
Dated as of November __, 1996
------------------------------
THE BANK OF NEW YORK
as Trustee
------------------------------
JUNIOR SUBORDINATED DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of
November __, 1996 between NationsBank Corporation and The Bank of New York, as
Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C>
310(a)(1)......................................................................................................6.09
(a)(2) .....................................................................................................6.09
310(a)(3)......................................................................................................N.A.
(a)(4)......................................................................................................N.A.
310(b).....................................................................................6.08; 6.10(a)(b) and (d)
310(c).........................................................................................................N.A.
311(a) and (b).................................................................................................6.13
311(c).........................................................................................................N.A.
312(a)................................................................................................4.01; 4.02(a)
312(b) and (c)......................................................................................4.02(b) and (c)
313(a)......................................................................................................4.04(a)
313(b)(1)......................................................................................................N.A.
313(b)(2)...................................................................................................4.04(b)
313(c)......................................................................................................4.04(c)
313(d)......................................................................................................4.04(d)
314(a).........................................................................................................4.03
314(b).........................................................................................................N.A.
314(c)(1) and (2).............................................................................................13.05
314(c)(3)......................................................................................................N.A.
314(d) ........................................................................................................N.A.
314(e)........................................................................................................13.05
314(f) ........................................................................................................N.A.
315(a)(c) and (d)..............................................................................................6.01
315(b) ........................................................................................................5.08
315(e) ........................................................................................................5.09
316(a)(1) ...............................................................................................5.01; 5.07
316(a)(2) ..................................................................................................Omitted
316(a) last sentence ..........................................................................................7.04
316(b) ........................................................................................................5.04
317(a) ........................................................................................................5.02
317(b) .....................................................................................................3.04(a)
318(a) .......................................................................................................13.07
</TABLE>
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
Page
<S> <C>
Parties .........................................................................................................1
Recitals..........................................................................................................1
Authorization of Indenture........................................................................................1
Compliance with Legal Requirements................................................................................1
Purpose of and Consideration for Indenture........................................................................1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions............................................................................1
Affiliate ................................................................................................2
Authenticating Agent.......................................................................................2
Bankruptcy Law.............................................................................................2
Board of Directors.........................................................................................2
Board Resolution...........................................................................................2
Business Day...............................................................................................2
Certificate................................................................................................2
Common Securities..........................................................................................2
Common Securities Guarantee................................................................................3
Company ................................................................................................3
Compounded Interest........................................................................................3
Custodian ................................................................................................3
Declaration................................................................................................3
Deferred Interest..........................................................................................3
Depositary ................................................................................................4
Event of Default...........................................................................................4
Extended Interest Payment Period...........................................................................4
Global Security............................................................................................4
Indenture ................................................................................................4
Interest ................................................................................................4
Interest Payment Date......................................................................................4
Mortgage ................................................................................................4
NB Trust ................................................................................................4
Officers' Certificate......................................................................................5
Opinion of Counsel.........................................................................................5
Original Issue Date........................................................................................5
Original Issue Discount Security...........................................................................5
outstanding................................................................................................5
Person ................................................................................................6
Preferred Securities.......................................................................................6
Preferred Securities Guarantee.............................................................................6
- --------
* THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
DEEMED TO BE A PART OF THE INDENTURE.
i
<PAGE>
Principal office of the Trustee............................................................................6
Property Trustee...........................................................................................6
Responsible Officer........................................................................................6
Security ................................................................................................7
Securities ................................................................................................7
Securityholder, holder of Securities.......................................................................7
Senior Obligations.........................................................................................7
Subsidiary ................................................................................................8
Trust Indenture Act of 1939................................................................................8
Trust Securities...........................................................................................8
Trustee ................................................................................................8
U.S. Government Obligations..........................................................................8
Vice President.............................................................................................9
Yield to Maturity..........................................................................................9
ARTICLE TWO
SECURITIES
SECTION 2.01. Forms Generally........................................................................9
SECTION 2.02. Form of Trustee's Certificate of
Authentication........................................................................10
SECTION 2.03. Amount Unlimited; Issuable in Series..................................................10
SECTION 2.04. Authentication and Dating.............................................................12
SECTION 2.05. Date and Denomination of Securities...................................................14
SECTION 2.06. Execution of Securities...............................................................16
SECTION 2.07. Exchange and Registration of Transfer of
Securities............................................................................16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Securities............................................................................17
SECTION 2.09. Temporary Securities..................................................................18
SECTION 2.10. Cancellation of Securities Paid, etc..................................................19
SECTION 2.11. Global Securities.....................................................................19
SECTION 2.12. CUSIP Numbers.........................................................................21
SECTION 2.13. Extension of Interest Payment Period..................................................21
ARTICLE THREE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and
Interest.....................................................................22
SECTION 3.02. Offices for Notices and Payments, etc.................................................23
SECTION 3.03. Appointments to Fill Vacancies in Trustee's
Office................................................................................23
SECTION 3.04. Provision as to Paying Agent..........................................................24
SECTION 3.05. Certificate to Trustee................................................................25
SECTION 3.06. Compliance with Consolidation Provisions..............................................25
SECTION 3.07. Limitation on Dividends...............................................................25
SECTION 3.08. Covenants as to NB Trusts.............................................................26
SECTION 3.09 Calculation of Original Issue Discount................................................26
ii
<PAGE>
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists................................................................27
SECTION 4.02. Preservation and Disclosure of Lists..................................................27
SECTION 4.03. Reports by Company....................................................................29
SECTION 4.04. Reports by the Trustee................................................................30
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default.....................................................................30
SECTION 5.02. Payment of Securities on Default; Suit
Therefor..............................................................................32
SECTION 5.03. Application of Moneys Collected by
Trustee......................................................................35
SECTION 5.04. Proceedings by Securityholders........................................................36
SECTION 5.05. Proceedings by Trustee................................................................37
SECTION 5.06. Remedies Cumulative and Continuing....................................................37
SECTION 5.07. Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders...............................................38
SECTION 5.08. Notice of Defaults....................................................................39
SECTION 5.09. Undertaking to Pay Costs..............................................................39
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee................................................40
SECTION 6.02. Reliance on Documents, Opinions, etc..................................................41
SECTION 6.03. No Responsibility for Recitals, etc...................................................43
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own
Securities............................................................................43
SECTION 6.05. Moneys to be Held in Trust............................................................43
SECTION 6.06. Compensation and Expenses of Trustee..................................................43
SECTION 6.07. Officers' Certificate as Evidence.....................................................44
SECTION 6.08. Conflicting Interest of Trustee.......................................................45
SECTION 6.09. Eligibility of Trustee................................................................45
SECTION 6.10. Resignation or Removal of Trustee.....................................................46
SECTION 6.11. Acceptance by Successor Trustee.......................................................47
SECTION 6.12. Succession by Merger, etc.............................................................49
SECTION 6.13. Limitation on Rights of Trustee as a
Creditor.....................................................................49
SECTION 6.14. Authenticating Agents.................................................................49
iii
<PAGE>
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.............................................................51
SECTION 7.02. Proof of Execution by Securityholders.................................................52
SECTION 7.03. Who Are Deemed Absolute Owners........................................................52
SECTION 7.04. Securities Owned by Company Deemed Not
Outstanding...........................................................................52
SECTION 7.05. Revocation of Consents; Future Holders
Bound........................................................................53
ARTICLE EIGHT
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings..................................................................53
SECTION 8.02. Call of Meetings by Trustee...........................................................54
SECTION 8.03. Call of Meetings by Company or
Securityholders.......................................................................54
SECTION 8.04. Qualifications for Voting.............................................................54
SECTION 8.05. Regulations...........................................................................55
SECTION 8.06. Voting................................................................................55
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of
Securityholders.......................................................................56
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders.......................................................................58
SECTION 9.03. Compliance with Trust Indenture Act; Effect
of Supplemental Indentures............................................................60
SECTION 9.04. Notation on Securities................................................................60
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee.....................................................60
ARTICLE TEN
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain
Terms.................................................................................60
SECTION 10.02. Successor Corporation to be Substituted for
Company...............................................................................61
SECTION 10.03. Opinion of Counsel to be Given Trustee................................................62
iv
<PAGE>
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture................................................................62
SECTION 11.02. Deposited Moneys and U.S. Government
Obligations to be Held in Trust by
Trustee......................................................................63
SECTION 11.03. Paying Agent to Repay Moneys Held.....................................................63
SECTION 11.04. Return of Unclaimed Moneys............................................................63
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations................................................................64
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate
Obligations...........................................................................66
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors............................................................................66
SECTION 13.02. Official Acts by Successor Corporation................................................66
SECTION 13.03. Surrender of Company Powers...........................................................66
SECTION 13.04. Addresses for Notices, etc............................................................67
SECTION 13.05. Governing Law.........................................................................67
SECTION 13.06. Evidence of Compliance with Conditions
Precedent.............................................................................67
SECTION 13.07. Legal Holidays........................................................................68
SECTION 13.08. Trust Indenture Act to Control........................................................68
SECTION 13.09. Table of Contents, Headings, etc......................................................68
SECTION 13.10. Execution in Counterparts.............................................................68
SECTION 13.11. Separability..........................................................................68
SECTION 13.12. Assignment............................................................................68
SECTION 13.13. Acknowledgment of Rights..............................................................69
ARTICLE FOURTEEN
REDEMPTION OF SECURITIES
SECTION 14.01. Applicability of Article..............................................................69
SECTION 14.02. Notice of Redemption; Selection of
Securities...................................................................69
SECTION 14.03. Payment of Securities Called for
Redemption...................................................................70
v
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ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate..............................................................71
SECTION 15.02. Default on Senior Obligations.........................................................71
SECTION 15.03. Liquidation; Dissolution; Bankruptcy..................................................72
SECTION 15.04. Subrogation...........................................................................73
SECTION 15.05. Trustee to Effectuate Subordination...................................................74
SECTION 15.06. Notice by the Company.................................................................75
SECTION 15.07. Rights of the Trustee; Holders of Senior
Obligations...........................................................................76
SECTION 15.08. Subordination May Not Be Impaired.....................................................76
Testimonium......................................................................................................77
Signatures.......................................................................................................77
Acknowledgments..................................................................................................78
</TABLE>
vi
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THIS INDENTURE, dated as of November __, 1996, between
NATIONSBANK CORPORATION, a North Carolina corporation (hereinafter sometimes
called the "Company"), and THE BANK OF NEW YORK, a New York banking corporation,
as trustee (hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue from time to time of its subordi nated unsecured
debentures, notes or other evidence of indebted ness to be issued in one or more
series (the "Securities") up to such principal amount or amounts as may from
time to time be authorized by the Company and, to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered, the Company has duly authorized the execution of this Indenture; and
WHEREAS, all acts and things necessary to make this Indenture
a valid agreement according to its terms, have been done and performed;
NOW, THEREFORE:
In consideration of the premises, and the purchase of the
Securities by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Securities or of a series thereof, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context other wise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.01. All other terms used in
this Indenture which are defined in the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), or which are by reference therein defined in the
Securities Act of 1933, as amended (the "Securities Act"), shall (except as
herein otherwise expressly provided or unless the context otherwise requires)
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture as originally executed.
All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting
principles and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of
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any computation. The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdi vision.
"Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding with power to vote
10% or more of the outstanding voting securities or other ownership interests of
the specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partner ship in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
the specified Person is an individual, any entity of which the speci fied Person
is an officer, director or general partner.
"Authenticating Agent" shall mean any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to Section
6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.
"Board of Directors" shall mean the Board of Directors or the
Executive Committee or any other duly authorized designat ed officers of the
Company.
"Board Resolution" shall mean a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or by a committee acting under authority of or
appointment by the Board of Directors and to be in full force and effect on the
date of such certification.
"Business Day" shall mean, with respect to any series of
Securities, any day other than a day on which federal or state banking
institutions in New York, New York, or Charlotte, North Carolina, are authorized
or obligated by law, executive order or regulation to close.
"Certificate" shall mean a certificate signed by the
Chief Executive Officer, President, Chief Financial Officer, any
Vice President, Treasurer or Associate General Counsel of the
Company.
"Commission" means the Securities and Exchange
Commission.
"Common Securities" shall mean undivided beneficial interests
in the assets of a NB Trust which rank pari passu with
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Preferred Securities issued by a NB Trust; provided, however, that upon the
occurrence of an Event of Default, the rights of holders of Common Securities to
payment in respect of distribu tions and payments upon liquidation, redemption
and otherwise are subordinated to the rights of holders of Preferred Securities.
"Common Securities Guarantee" shall mean any guarantee that
the Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities of such NB Trust.
"Company" shall mean NationsBank Corporation, a North Carolina
corporation, and, subject to the provisions of Article Ten, shall include its
successors and assigns.
"Company Common Stock" shall mean the Common Stock of the
Company or any other class of stock resulting from changes or reclassifications
of such Common Stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. Subject to the
anti-dilution provisions of any convertible Security, however, shares of Company
Common Stock issuable on conversion of a Security shall include only shares of
the class designated as Common Stock of the Company at the date of the
supplemental indenture, Board Resolution or other instrument authorizing such
Security or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of the
payment of dividends or the distri bution of assets upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company, provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of such classes resulting from all such reclas
sifications.
"Compounded Interest" shall have the meaning set forth
in Section 2.13.
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Declaration", with respect to a NB Trust, shall mean the
Amended and Restated Declaration of Trust of such NB Trust.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in
Section 2.13.
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"Depositary" shall mean, with respect to Securities of any
series, for which the Company shall determine that such Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.04 or 2.11.
"Event of Default" shall mean any event specified in Section
5.01, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 2.13.
"Global Security" means, with respect to any series of
Securities, a Security executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Indenture" shall mean this instrument as originally executed
or, if amended or supplemented as herein provided, as so amended or
supplemented, or both, and shall include the form and terms of particular series
of Securities established as contem plated hereunder.
"Interest" shall mean, when used with respect to non-interest
bearing Securities, interest payable after maturity.
"Interest Payment Date", when used with respect to any
installment of interest on a Security of a particular series, shall mean the
date specified in such Security or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Securities of that series is due and
payable.
"Maturity Date" shall mean the date on which any Securities
mature and on which the principal shall be due and payable together with all
accrued and unpaid interest thereon.
"Mortgage" shall mean and include any mortgage, pledge, lien,
security interest, conditional sale or other title reten tion agreement or other
similar encumbrance.
"NB Trust" shall mean each of NB Capital Trust I, NB Capital
Trust II and NB Capital Trust III, each, a Delaware busi ness trust or any other
similar trust created for the purpose of issuing Preferred Securities in
connection with the issuance of Securities under this Indenture.
4
<PAGE>
"Officers' Certificate" shall mean a certificate signed by the
Chief Executive Officer, the President or any Vice Presi dent, by the Treasurer,
an Assistant Treasurer or Associate General Counsel and delivered to the
Trustee. Each such certifi cate shall include the statements provided for in
Section 13.06 if and to the extent provided by the provisions of such Section.
"Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be an employee of or counsel to the Company, or may be
other counsel satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 13.06 if and to the extent required by the
provisions of such Section.
"Original Issue Date" of any Security (or any portion thereof)
shall mean the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
"Original Issue Discount Security" shall mean any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 5.01.
The term "outstanding" (except as otherwise provided in
Section 6.08), when used with reference to Securities, shall, subject to the
provisions of Section 7.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee or the Authenticating Agent under
this Indenture, except
(a) Securities theretofore canceled by the Trustee or
the Authenticating Agent or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for the payment
or redemption of which moneys in the necessary
amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the
Company) or shall have been set aside and segre
gated in trust by the Company (if the Company
shall act as its own paying agent); provided that,
if such Securities, or portions thereof, are to be
redeemed prior to maturity thereof, notice of such
redemption shall have been given as provided in
Article Fourteen or provision satisfactory to the
Trustee shall have been made for giving such no
tice; and
(c) Securities paid pursuant to Section 2.08 or in
lieu of or in substitution for which other Securi
ties shall have been authenticated and delivered
5
<PAGE>
pursuant to the terms of Section 2.08 unless proof
satisfactory to the Company and the Trustee is
presented that any such Securities are held by bona
fide holders in due course.
In determining whether the holders of the requi site
principal amount of outstanding Securities have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding for
such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such
determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 5.01.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt and as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Preferred Securities" shall mean undivided beneficial
interests in the assets of a NB Trust which rank pari passu with Common
Securities issued by such NB Trust; provided, however, that upon the occurrence
of an Event of Default, the rights of holders of Common Securities to payment in
respect of distribu tions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" shall mean any guaran tee
that the Company may enter into with the Trustee or other Persons that operate
directly or indirectly for the benefit of holders of Preferred Securities of a
NB Trust.
"Principal office of the Trustee", or other similar term,
shall mean the principal office of the Trustee, at which at any particular time
its corporate trust business shall be admin istered.
"Property Trustee" has the meaning set forth in the
Declaration of the applicable NB Trust.
"Responsible Officer", when used with respect to the Trustee,
shall mean the chairman and vice chairman of the board of directors, the
chairman or vice chairman of the executive
6
<PAGE>
committee of the board of directors, the president, any vice president, any
assistant vice president, the cashier, any assis tant cashier, the secretary,
any assistant secretary, the trea surer, any assistant treasurer, any senior
trust officer, any trust officer, the controller, any assistant controller or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Security" or "Securities" shall have the meaning stated in
the first recital of this Indenture and more particu larly means any security or
securities, as the case may be, authenticated and delivered under this
Indenture.
"Securityholder", "hHolder of Securities", or other similar
terms, shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Senior Obligations" means, with respect to the Company, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
such obligor for money borrowed or purchased and similar obligations (whether or
not denominated as senior or subordinated), and (B) indebtedness evidenced by
securities, debentures, bonds or other similar instruments (whether or not
denominated as senior or subordinated) issued by such obligor; (ii) all capital
lease obligations of such obligor; (iii) all obligations of such obligor issued
or assumed as the deferred purchase price of property, all conditional sale
obliga tions of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of such obligor for the
reimbursement on any letter of credit, banker's acceptance or similar credit
transaction; (v) all obligations of the Company arising from off-balance sheet
guarantees by the Company and direct credit substitutes and obligations of the
Company associated with derivative products such as interest and foreign
exchange rate contracts, commodity contracts, swap agreements (including
interest rate and foreign exchange swap agreements), cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign exchange rate
agreements, options, commodity futures contracts and commodity option contracts;
(vi) all obligations and financial instruments of the type referred to in
clauses (i) through (v) of other Persons for the payment of which such obligor
is respon sible or liable as obligor, guarantor or otherwise; and (vii) all
obligations of the type referred to in clauses (i) through (vi) of other Persons
secured by any lien on any property or asset of such obligor (whether or not
such obligation is assumed by such obligor), except for (1) any such
indebtedness that is by its
7
<PAGE>
terms subordinated to or pari passu with the Securities, and (2) any
indebtedness between or among such obligor and its Affili ates, including all
other debt securities and guarantees in respect of those debt securities, which
is issued to (x) any NB Trust or (y) any other trust, or a trustee of such
trust, part nership or other entity affiliated with the Company which is a
financing vehicle of the Company (a "Financing Entity") in connection with the
issuance by such Financing Entity of pre ferred securities.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock of which is
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any
general partner ship, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiar ies, or by such Person and one
or more of its Subsidiaries and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equiva lent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939 as in force at the date of execution of this Indenture, except as
provided in Section 9.03.
"Trust Securities" shall mean the Common Securities and the
Preferred Securities of a NB Trust.
"Trustee" shall mean the Person identified as "Trustee" in the
first paragraph hereof, and, subject to the provisions of Article Six hereof,
shall also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as
8
<PAGE>
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such deposito ry
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
"Vice President" when used with respect to the Company or the
Trustee shall mean any vice president, whether or not designated by a number or
word or words added before or after the title "vice president," including any
Executive or Senior Vice President.
"Yield to Maturity" shall mean the yield to maturity on a
series of Securities, calculated at the time of issuance of such series of
Securities, or if applicable, at the most recent redetermination of interest on
such series and calculated in accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
SECTION 2.01. Forms Generally.
The Securities of each series shall be in substantially the
form as shall be established by or pursuant to a Board Resolution and as set
forth in an Officers' Certificate of the Company or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Inden
ture, and may have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may be required to comply with
any law or with any rules made pursuant thereto or with any rules of any
securities exchange or all as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
In the event the Securities are issued in definitive form
pursuant to this Indenture, such Securities shall be typewritten, printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
9
<PAGE>
SECTION 2.02. Form of Trustee's Certificate of Authen
tication.
The Trustee's certificate of authentication on all Securities
shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York
as Trustee
By_________________________________
Authorized Signatory
SECTION 2.03. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture or otherwise by the Corporation
is unlimited.
The Securities may be issued in one or more series up to the
aggregate principal amount of securities of that series from time to time
authorized by or pursuant to a Board Resolution of the Company or pursuant to
one or more indentures supplemental hereto. Prior to the initial issuance of
Securities of any series, there shall be established in or pursuant to a Board
Resolution of the Company and set forth in an Officers' Certifi cate of the
Company or established in one or more indentures supplemental hereto:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series
from all other Securities);
(2) any limit upon the aggregate principal amount of
the Securities of the series which may be authen
ticated and delivered under this Indenture (except
for Securities authenticated and delivered upon
registration of transfer of, or in exchange for,
or in lieu of, other Securities of the series
pursuant to Section 2.07, 2.08, 2.09, 9.04 or
14.03);
(3) the date or dates on which the principal of and
premium, if any, on the Securities of the series
is payable;
(4) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method by
which such interest may be determined, the date or
dates from which such interest shall accrue,
10
<PAGE>
the Interest Payment Dates on which such interest
shall be payable or the manner of determination of
such Interest Payment Dates and the record dates for
the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(5) the place or places where the principal of, and
premium, if any, and any interest on Securities of
the series shall be payable;
(6) the right, if any, to extend the interest payment
periods and the duration of such extension;
(7) the price or prices at which, the period or peri ods
within which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or
in part, at the option of the Company, pursuant to
any sinking fund or otherwise;
(8) the obligation, if any, of the Company to redeem,
purchase or repay Securities of the series pursu ant
to any sinking fund or analogous provisions or at the
option of a Securityholder thereof and the price or
prices at which and the period or periods within
which the price or prices at which, and the terms and
conditions upon which Securities of the series shall
be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in
which Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the
portion of the principal amount of Securities of the
series which shall be payable upon declaration of
acceleration of the maturity thereof pursuant to
Section 5.01 or provable in bankruptcy pursuant to
Section 5.02;
(11) any Events of Default with respect to the Securi
ties of a particular series, if not set forth
herein;
(12) the form of the Securities of the series including
the form of the Certificate of Authentication of
such series;
(13) any trustee, authenticating or paying agents,
warrant agents, transfer agents or registrars with
respect to the Securities of such series;
11
<PAGE>
(14) whether the Securities of the series shall be issued
in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary for such
Global Security or Securities, and whether beneficial
owners of interests in any such Global Securities may
exchange such interests for other Securities of such
series in the manner provided in Section 2.07, and
the manner and the circumstances under which and the
place or places where any such exchanges may occur if
other than in the manner provided in Section 2.07,
and any other terms of the series relating to the
global nature of the Global Securities of such series
and the exchange, registration or transfer thereof
and the payment of any principal thereof, or interest
or premium, if any, thereon; and
(15) any other terms of the series (which terms shall
not be inconsistent with the provisions of this
Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such Board Resolution or in any such indenture supplemental
hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate of the Company setting forth the terms of the series.
SECTION 2.04. Authentication and Dating.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securi ties of any series
executed by the Company to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Securities to or
upon the written order of the Company, signed by any two of its Chairman, Chief
Executive Officer, Chief Financial Officer, President, Vice Presidents or
Treasurer, without any further action by the Company hereunder. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.01) shall be fully protected in
relying upon:
(1) a copy of any Board Resolution or Resolutions
relating thereto and, if applicable, an appropri
ate record of any action taken pursuant to such
12
<PAGE>
resolution, in each case certified by the Secre
tary or an Assistant Secretary of the Company;
(2) an executed supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form
and terms of the Securities as required pursuant
to Sections 2.01 and 2.03, respectively; and
(4) an Opinion of Counsel which shall also state:
(a) that the form of such Securities has been
established by or pursuant to a Board
Resolution or by a supplemental indenture as
permitted by Section 2.01 in conformity with
the provisions of this Indenture;
(b) that the terms of such Securities have been
established by or pursuant to a Board
Resolution or by a supplemental indenture as
permitted by Section 2.03 in conformity with
the provisions of this Indenture;
(c) that such Securities, when authenticated and
delivered by the Trustee and issued by the
Company in the manner and subject to any
conditions specified in such Opinion of Coun
sel, will constitute valid and legally bind
ing obligations of the Company;
(d) that all laws and requirements in respect of
the execution and delivery by the Company of
the Securities have been complied with in
all material respects and that
authentication and delivery of the
Securities by the Trustee will not violate
the terms of the Indenture; and
(e) such other matters as the Trustee may reason
ably request.
The Trustee shall have the right to decline to authen ticate
and deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the Trustee
in good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or vice presidents shall determine
that such action would expose the Trustee to personal liability to existing
holders.
13
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SECTION 2.05. Date and Denomination of Securities.
The Securities shall be issuable as registered Securi ties
without coupons and in such denominations as shall be specified as contemplated
by Section 2.03. In the absence of any such specification with respect to the
Securities of any series, the Securities of such Series shall be issuable in the
denomina tions of $1,000 and any multiple thereof. The Securities shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance
with such plans as the officers of the Company executing the same may determine
with the approval of the Trustee as evidenced by the execution and
authentication thereof.
Every Security shall be dated the date of its authenti cation,
shall bear interest, if any, from such date and shall be payable on such dates,
in each case, as contemplated by Section 2.03. The interest installment on any
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date for Securities of that series shall be paid to the Person
in whose name said Security (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such interest
installment. In the event that any Security of a particular series or portion
thereof is called for redemption and the redemption date is subsequent to a
regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Security will be paid upon presentation
and surrender of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for Security
of the same series (herein called "Defaulted Interest") shall forthwith cease to
be payable to the registered holder on the relevant regular record date by
virtue of having been such holder; and such Defaulted Interest shall be paid by
the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such De-
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faulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days prior to
the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Security
Register (as hereinaf ter defined), not less than 10 days prior to such
special record date. Notice of the proposed payment of such De faulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Securities (or their respective Predecessor
Securities) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
any Securities in any other lawful manner not inconsistent with the
requirements of any securities ex change on which such Securities may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustees of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or
more indentures supplemental hereto establishing the terms of any series of
Securities pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Securities with respect to any
Interest Payment Date for such series shall mean either the fifteenth day of the
month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.
Subject to the foregoing provisions of this Section, each
Security of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Security of such series shall carry the
rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.
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SECTION 2.06. Execution of Securities.
The Securities shall be signed in the name and on behalf of
the Company by the manual or facsimile signature of its Chief Executive Officer,
President or one of its Vice-Presidents and may be attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries, under
its corporate seal which may be affixed thereto or printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise, and which need not be
attested. Only such Securities as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited, executed by the
Trustee or the Authenticating Agent, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee or the Authenticating Agent upon any Security executed by the Company
shall be conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Securities shall cease to be such officer before the Securities so signed
shall have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company, such Securities nevertheless may be
authenti cated and delivered or disposed of as though the person who signed such
Securities had not ceased to be such officer of the Company; and any Security
may be signed on behalf of the Company by such persons as, at the actual date of
the execution of such Security, shall be the proper officers of the Company,
although at the date of the execution of this Indenture any such person was not
such an officer.
SECTION 2.07. Exchange and Registration of Transfer of
Securities.
Subject to Section 2.03(12), Securities of any series may be
exchanged for a like aggregate principal amount of Securi ties of the same
series of other authorized denominations. Securities to be exchanged may be
surrendered at the principal corporate trust office of the Trustee or at any
office or agency to be maintained by the Company for such purpose as provided in
Section 3.02, and the Company or the Trustee shall execute and register and the
Trustee or the Authenticating Agent shall authenticate and make available for
delivery in exchange therefor the Security or Securities which the
Securityholder making the exchange shall be entitled to receive. Upon due
presentment for registration of transfer of any Security of any series at the
principal corporate trust office of the Trustee or at any office or agency of
the Company maintained for such purpose as provided in Section 3.02, the Company
or the Trustee shall execute and register and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in the name of the
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transferee or transferees a new Security or Securities of the same series for a
like aggregate principal amount. Registration or registration of transfer of any
Security by the Trustee or by any agent of the Company appointed pursuant to
Section 3.02, and delivery of such Security, shall be deemed to complete the
registration or registration of transfer of such Security.
The Company or the Trustee shall keep, at the Principal Office
of the Trustee, a register for each series of Securities issued hereunder in
which, subject to such reasonable regulations as it may prescribe, the Company
or the Trustee shall register all Securities and shall register the transfer of
all Securities as in this Article Two provided. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.
All Securities presented for registration of transfer or for
exchange or payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by, the holder or his
attorney duly authorized in writing.
No service charge shall be made for any exchange or
registration of transfer of Securities, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax, fee or other governmental
charge that may be imposed in connec tion therewith.
The Company or the Trustee shall not be required to exchange
or register a transfer of (a) any Security for a period of 15 days next
preceding the date of selection of Securities of such series for redemption, or
(b) any Securities of any series selected, called or being called for redemption
in whole or in part, except in the case of any Securities of any series to be
redeemed in part, the portion thereof not so to be redeemed.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Securities.
In case any temporary or definitive Security shall become
mutilated or be destroyed, lost or stolen, the Company shall execute, and upon
its request the Trustee shall authenti cate and deliver, a new Security of the
same series bearing a number not contemporaneously outstanding, in exchange and
substi tution for the mutilated Security, or in lieu of and in substitu tion for
the Security so destroyed, lost or stolen. In every case the applicant for a
substituted Security shall furnish to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee evidence to their satis-
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faction of the destruction, loss or theft of such Security and of the ownership
thereof.
The Trustee may authenticate any such substituted Security and
deliver the same upon the written request or autho rization of any officer of
the Company. Upon the issuance of any substituted Security, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses con nected
therewith. In case any Security which has matured or is about to mature or has
been called for redemption in full shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harm less and, in case of destruction, loss or theft, evidence
satis factory to the Company and to the Trustee of the destruction, loss or
theft of such Security and of the ownership thereof.
Every substituted Security of any series issued pursu ant to
the provisions of this Section 2.08 by virtue of the fact that any such Security
is destroyed, lost or stolen shall consti tute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
shall be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of the
same series duly issued hereunder. All Securi ties shall be held and owned upon
the express condition that, to the extent permitted by applicable law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities and shall pre clude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.09. Temporary Securities.
Pending the preparation of definitive Securities of any series
the Company may execute and the Trustee shall authenticate and make available
for delivery temporary Securities (typed, printed or lithographed). Temporary
Securities shall be issuable in any authorized denomination, and substantially
in the form of the definitive Securities but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Every such temporary Security shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Securities. Without unreasonable delay the Company will execute and deliver to
the Trustee or the Authenticating Agent definitive Securities
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and thereupon any or all temporary Securities of such series may be surrendered
in exchange therefor, at the principal corporate trust office of the Trustee or
at any office or agency maintained by the Company for such purpose as provided
in Section 3.02, and the Trustee or the Authenticating Agent shall authenticate
and make available for delivery in exchange for such temporary Securities a like
aggregate principal amount of such definitive Securities. Such exchange shall be
made by the Company at its own expense and without any charge therefor except
that in case of any such exchange involving a registration of transfer the
Company may require payment of a sum sufficient to cover any tax, fee or other
governmental charge that may be imposed in relation thereto. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of the same series
authenticated and delivered hereunder.
SECTION 2.10. Cancellation of Securities Paid, etc.
All Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if surrendered to the
Company or any paying agent, be surrendered to the Trustee and promptly
cancelled by it, or, if surrendered to the Trustee or any Authenticating Agent,
shall be promptly cancelled by it, and no Securities shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. All Securities cancelled by any Authenticating Agent shall be
delivered to the Trustee. The Trustee shall deliver all cancelled Securities to
the Company. If the Company shall acquire any of the Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the indebt
edness represented by such Securities unless and until the same are surrendered
to the Trustee for cancellation.
SECTION 2.11. Global Securities.
(a) If the Company shall establish pursuant to Section 2.03
that the Securities of a particular series are to be issued as a Global
Security, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and deliver, a Global Security that (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the outstanding Securities of such series, (ii)
shall be registered in the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Except as otherwise provided in Section 2.11 of the Indenture, this Security
may be transferred, in whole but not in part, only to another nominee of the
Depositary or to a successor Depositary or to a nominee of such successor
Depositary."
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(b) Notwithstanding the provisions of Section 2.07, the Global
Security of a series may be transferred, in whole but not in part and in the
manner provided in Section 2.07, only to another nominee of the Depositary for
such series, or to a successor Depositary for such series selected or approved
by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the
Securities notifies the Company that it is unwilling or unable to continue as
Depositary for such series or if at any time the Depositary for such series
shall no longer be registered or in good standing under the Exchange Act, or
other applicable statute or regulation, and a successor Depositary for such
series 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, this Section
2.11 shall no longer be applicable to the Securities of such series and the
Company will execute, and subject to Section 2.07, the Trustee will authenticate
and make available for delivery the Securities of such series in defini tive
registered form without coupons, in authorized denomina tions, and in an
aggregate principal amount equal to the princi pal amount of the Global Security
of such series in exchange for such Global Security. In addition, the Company
may at any time determine that the Securities of any series shall no longer be
represented by a Global Security and that the provisions of this Section 2.11
shall no longer apply to the Securities of such series. In such event the
Company will execute and subject to Section 2.07, the Trustee, upon receipt of
an Officers' Certifi cate evidencing such determination by the Company, will
authenti cate and make available for delivery the Securities of such series in
definitive registered form without coupons, in autho rized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security. Upon the exchange
of the Global Security for such Securities in definitive registered form without
coupons, in authorized denominations, the Global Security shall be cancelled by
the Trustee. Such Securities in definitive registered form issued in exchange
for the Global Security pursu ant to this Section 2.11(c) shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or other wise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
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So long as the system of registration described in this
Section 2.11 is in effect, (a) the records of the Depositary will be
determinative for all purposes and (b) neither the Company, the Trustee nor any
paying agent, Security registrar or transfer agent for such Securities will have
any responsibility or liability for (i) any aspect of the records relating to or
payments made on account of owners of beneficial interests in the Securities of
such series, (ii) maintaining, supervising or reviewing any records relating to
such beneficial interests, (iii) receipt of notices, voting and requesting or
directing the Trustee to take, or not to take, or consenting to, certain actions
hereunder, or (iv) the records and procedures of the Depositary.
SECTION 2.12. CUSIP Numbers
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Securityholders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
SECTION 2.13. Extension of Interest Payment Period
The Company shall have the right, at any time and from time to
time during the term of the Notes, to defer payments of interest by extending
the interest payment period of such Notes for a period not exceeding 20
consecutive quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and payable; provided
that no Extended Interest Payment Period may extend beyond the Maturity Date. 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 2.13, will bear interest thereon at the rate of interest specified
in the applicable Security compounded quarterly, for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued and
unpaid on the Notes, including any Compounded Interest (together, "Deferred
Interest"), together with all other amounts due thereon, that shall be payable
to the Holders of the Notes in whose names the Notes are registered in the
Security Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period, provided that such period
together with all
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such further extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the maturity date of the Notes. Upon the termination of any
Extended Interest Payment Period and upon the payment of all Deferred Interest
then due, the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.
(a) If the Property Trustee is the only registered holder of
the Notes at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Property
Trustee and the Trustee of its selection of such Extended Interest Payment
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 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 Property Trustee is not the only holder of the
Notes at the time the Company selects an Extended Interest Payment Period, the
Company shall give the holders of the Notes and the Trustee written notice of
its selection of such Extended Interest Payment Period at least 10 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 or payment date of
such interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Notes.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 2.13 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 2.13.
ARTICLE THREE
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 3.01. Payment of Principal, Premium and
Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay or cause to be paid
the principal of, premium, if any, and interest on each of the Securities of
that series at the place, at the respective times and in the manner provided in
such Securities.
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Each installment of interest on the Securities of any series may be paid by
mailing checks for such interest payable to the order of the holders of
Securities entitled thereto as they appear on the registry books of the Company.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remains outstanding, the
Company will maintain in New York, New York, an office or agency where the
Securities of each series may be presented for payment, an office or agency
where the Securities of that series may be presented for registration of
transfer and for exchange as in this Indenture provided and an office or agency
where notices and demands to or upon the Company in respect of the Securities of
that series or of this Indenture may be served. The Company will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. Until otherwise designated from time to time by the
Company in a notice to the Trustee, or specified as contemplated by Section
2.03, any such office or agency for all of the above purposes shall be the
office or agency of the Trustee. In case the Company shall fail to maintain any
such office or agency in New York, New York, or shall fail to give such notice
of the location or of any change in the location thereof, presentations and
demands may be made and notices may be served at the principal corporate trust
office of the Trustee.
In addition to any such office or agency, the Company may from
time to time designate one or more offices or agencies outside New York, New
York, where the Securities may be presented for registration of transfer and for
exchange in the manner provided in this Indenture, and the Company may from time
to time rescind such designation, as the Company may deem desirable or
expedient; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain any such office or
agency in New York, New York, for the purposes above mentioned. The Company will
give to the Trustee prompt written notice of any such designation or rescission
thereof.
SECTION 3.03. Appointments to Fill Vacancies in
Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
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SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other
than the Trustee with respect to the Securities of
any series, it will cause such paying agent to
execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee,
subject to the provision of this Section 3.04,
(1) that it will hold all sums held by it as
such agent for the payment of the principal
of and premium, if any, or interest, if any,
on the Securities of such series (whether
such sums have been paid to it by the
Company or by any other obligor on the
Securities of such se ries) in trust for the
benefit of the holders of the Securities of
such series; and
(2) that it will give the Trustee notice of any
failure by the Company (or by any other obli
gor on the Securities of such series) to
make any payment of the principal of and
premium, if any, or interest, if any, on the
Securi ties of such series when the same
shall be due and payable.
(b) If the Company shall act as its own paying agent,
it will, on or before each due date of the princi
pal of and premium, if any, or interest, if any,
on the Securities of any series, set aside, segre
gate and hold in trust for the benefit of the
holders of the Securities of such series a sum
sufficient to pay such principal, premium or in
terest so becoming due and will notify the Trustee
of any failure to take such action and of any
failure by the Company (or by any other obligor
under the Securities of such series) to make any
payment of the principal of and premium, if any,
or interest, if any, on the Securities of such
series when the same shall become due and payable.
(c) Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for
the purpose of obtaining a satisfaction and dis
charge with respect to one or more or all series
of Securities hereunder, or for any other reason,
pay or cause to be paid to the Trustee all sums
held in trust for any such series by the Trustee
or any paying agent hereunder, as required by this
Section 3.04, such sums to be held by the Trustee
upon the trusts herein contained.
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(d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust
as provided in this Section 3.04 is subject to
Sections 11.03 and 11.04.
SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days
after the end of each fiscal year in each year, so long as Securities of any
series are outstanding hereunder, a Certifi cate stating that in the course of
the performance by the signers of their duties as officers of the Company they
would normally have knowledge of any default by the Company in the performance
of any covenants contained herein, stating whether or not they have knowledge of
any such default and, if so, specifying each such default of which the signers
have knowledge and the nature thereof.
SECTION 3.06. Compliance with Consolidation Provi
sions.
The Company will not, while any of the Securities remain
outstanding, consolidate with, or merge into, or merge into itself, or sell or
convey all or substantially all of its property to any other company unless the
provisions of Article Ten hereof are complied with.
SECTION 3.07. Limitation on Dividends.
(a) If Securities are issued to a NB Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such NB Trust
and (i) there shall have occurred any event that would constitute an Event of
Default, (ii) the Company shall be in default with respect to its payment of any
obliga tions under the Preferred Securities Guarantee or Common Securi ties
Guarantee relating to such NB Trust, then:
(x) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases or
acquisitions of shares of Company Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans,
(ii) as a result of a reclassification of Company capital stock or the exchange
or conversion of one class or series of Company capital stock for another class
or series of Company capital stock or (iii) the purchase of fractional interests
in shares of Company capital stock pursuant to an acquisition or the conversion
or exchange provisions of such Company capital stock or the security being
converted or exchanged) or make any guarantee payments with respect to the
foregoing, and
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(y) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Company which rank pari passu
with or junior to such Securities.
(b) If the Company shall exercise its right to defer payment
of interest as provided in Section 2.13, then (a) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i)
purchases or acquisitions of shares of its common stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans,
(ii) as a result of a reclassification of its capital stock for another class or
series of its capital stock or (iii) the purchase of fractional interests in
shares of its capital stock pursuant to an acquisition or the conversion or
exchange provisions of such capital stock or security being converted or
exchanged) or make any guarantee payment with respect thereto and (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 which
rank pari passu with or junior to the Securities.
SECTION 3.08. Covenants as to NB Trusts.
In the event Securities are issued to a NB Trust or a trustee
of such trust in connection with the issuance of Trust Securities by such NB
Trust, for so long as such Trust Securities remain outstanding, the Company will
(i) maintain 100% direct ownership of the Common Securities of such NB Trust,
(ii) use its reasonable efforts to cause such NB Trust (a) to remain a business
trust, except in connection with a distribution of Securities, the redemption of
all of the Trust Securities of such NB Trust or certain mergers, consolidations
or amalgamations, each as permitted by the Declaration of such NB Trust, and (b)
to otherwise continue not to be treated as an association taxable as a
corporation or partnership for United States federal income tax purposes and
(iii) use its reasonable efforts to cause each holder of Trust Securities to be
treated as owning an individual beneficial interest in the Securities.
SECTION 3.09 Calculation of Original Issue Discount
The Company shall file with the Trustee promptly at the end of
each calendar year a written notice specifying the amount of any original issue
discount (including daily rates and accrual periods) accrued on outstanding
Securities as of the end of such year.
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ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE.
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee:
(a) on a monthly basis on each regular record date for
each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names
and addresses of the Securityholders of such se
ries of Securities as of such record date (and on
dates to be determined pursuant to Section 2.03
for non-interest bearing securities in each year);
and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the
Company, of any such request, a list of similar
form and content as of a date not more than 15
days prior to the time such list is furnished,
except that no such lists need be furnished so
long as the Trustee is in possession thereof by
reason of its acting as Security registrar for
such series.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, all information as
to the names and addresses of the holders of each
series of Securities (1) contained in the most
recent list furnished to it as provided in Section
4.01 or (2) received by it in the capacity of
Securities registrar (if so acting) hereunder.
The Trustee may destroy any list furnished to it
as provided in Section 4.01 upon receipt of a new
list so furnished.
(b) In case three or more holders of Securities of any
series (hereinafter referred to as "applicants")
apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant
has owned a Security of such series for a period
of at least six months preceding the date of such
application, and such application states that the
applicants desire to communicate with other hold
ers of Securities of such series or with holders
of all Securities with respect to their rights
under this Indenture or under such Securities and
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is accompanied by a copy of the form of proxy or
other communication which such applicants propose to
transmit, then the Trustee shall within five business
days after the receipt of such application, at its
election, either:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this
Section 4.02, or
(2) inform such applicants as to the approximate num ber
of holders of such series or all Securities, as the
case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of
this Section 4.02, and as to the approximate cost of
mailing to such Securityholders the form of proxy or
other commu nication, if any, specified in such
application.
If the Trustee shall elect not to afford
such applicants access to such information, the
Trustee shall, upon the written request of such appli
cants, mail to each Securityholder of such series or
all Securities, as the case may be, whose name and
address appear in the information preserved at the
time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.02 a copy of the
form of proxy or other communication which is
specified in such request with reasonable promptness
after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment,
of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail
to such applicants and file with the Commission,
together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion
of the Trustee, such mailing would be contrary to the
best interests of the holders of Securities of such
series or all Securities, as the case may be, or
would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If
the Commission, after opportunity for a hearing upon
the objections specified in the written statement so
filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order
sustaining one or more of such objections, the
Commission shall find, after notice and opportunity
for hearing, that all the objections so sustained
have been met and shall enter an order so declaring,
the Trustee
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shall mail copies of such material to all such
Securityholders with reasonable promptness after the
entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respect ing
their application.
(c) Each and every holder of Securities, by receiving
and holding the same, agrees with Company and the
Trustee that neither the Company nor the Trustee
nor any paying agent shall be held accountable by
reason of the disclosure of any such information
as to the names and addresses of the holders of
Securities in accordance with the provisions of
subsection (b) of this Section 4.02, regardless of
the source from which such information was de
rived, and that the Trustee shall not be held
accountable by reason of mailing any material
pursuant to a request made under said
subsection (b).
SECTION 4.03. Reports by Company.
(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is re
quired 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 Company may be
required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports
pursuant to either of such sections, then to file
with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to
time by the Commission, such of the supplementary
and periodic information, documents and reports
which may be required pursuant to Section 13 of
the 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) The Company covenants and agrees to file with the
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 Company with the conditions and covenants
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provided for in this Indenture as may be required
from time to time by such rules and regulations.
(c) Delivery of such reports, information and docu
ments to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not
constitute constructive notice of any information
contained therein or determinable from information
contained therein, including the Company's compli
ance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively
on Certificates and Officers' Certificates).
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such
reports concerning the Trustee and its actions
under this Indenture as may be required pursuant
to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by
Section 313(a) of the Trust Indenture Act, the
Trustee shall, within 60 days after each March 31
following the date of this Indenture deliver to
Securityholders a brief report, dated as of such
March 31, 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 Securityholders, be filed by the
Trustee with each stock exchange, if any, upon which
the Securities are listed, with the Commis sion and
with the Company. The Company will promptly notify
the Trustee when the Securities are listed on any
stock exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT.
SECTION 5.01. Events of Default.
In case one or more of the following Events of Default with
respect to Securities of any series or such other events as may be established
with respect to the Securities of that series as contemplated by Section 2.03
hereof shall have occurred and be continuing:
(a) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the
Company in an involuntary case under any ap plicable
bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a
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receiver, liquidator, assignee, custodian, trust ee,
sequestrator (or similar official) of the Company or
for any substantial part of its proper ty, or
ordering the winding-up or liquidation of its affairs
and such decree or order shall remain unstayed and in
effect for a period of 90 consecu tive days; or
(b) the Company shall commence a voluntary case under
any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an
involuntary case under any such law, or shall
consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar offi
cial) of the Company or of any substantial part of
its property, or shall make any general assignment
for the benefit of creditors, or shall fail gener
ally to pay its debts as they become due; or
(c) in the event Securities are issued to a NB Trust
or a trustee of such trust in connection with the
issuance of Trust Securities by such NB Trust,
such NB Trust shall have voluntarily or
involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in
connection with (i) the distribution of Securities
to holders of Trust Securities in liquidation of
their interests in such NB Trust, (ii) the redemp
tion of all of the outstanding Trust Securities of
such NB Trust or (iii) certain mergers,
consolidations or amalgamations, each as permitted
by the Declaration of such NB Trust.
If an Event of Default occurs and is continuing, then, and in
each and every such case, unless the principal of all of the Securities of such
series shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities of
that series then outstanding hereunder, by notice in writing to the Company (and
to the Trustee if given by Securityholders), may declare the entire principal
(or, if the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all Securities of that series and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such decla ration the same
shall become immediately due and payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal (or, if the Securities are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof) of the
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Securities of any series (or of all the Securities, as the case may be) shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum suffi
cient to pay all matured installments of interest upon all the Securities of
such series (or of all the Securities, as the case may be) and the principal of
and premium, if any, on any and all Securities of such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by
accelera tion (with interest upon such principal and premium, if any, and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such series, (or at the respective rates of interest or
Yields to Maturity of all the Securities, as the case may be) to the date of
such payment or deposit) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith, and if any and all Events of
Default under the Indenture, shall have been cured, waived or otherwise remedied
as provided herein -- then and in every such case the holders of a majority in
aggregate principal amount of the Securities of such series (or of all the
Securities, as the case may be) then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults with respect to that series
(or with respect to all Securities, as the case may be, in such case, treated as
a single class) and rescind and annul such declaration and its consequences, but
no such waiver or rescis sion and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Trustee and the holders of the Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit
Therefor.
The Company covenants that:
(a) in case of nonpayment of any installment of
interest upon any of the Securities of any series
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as and when the same shall become due and payable,
and such nonpayment shall have continued for a
period of 30 days, or
(b) in case of nonpayment of any of the principal of or
premium, if any, on any of the Securities of any
series as and when the same shall have become due and
payable, whether at maturity of the Securities of
that series or upon redemption or by declaration or
otherwise, or
(c) in case there shall have occurred a failure in the
performance, or breach, of any covenant or
warranty of the Company in this Indenture (other
than those set forth exclusively in terms of any
particular series of Securities established as
contemplated in this Indenture), and continuance
of such failure or breach for a period of 90 days
after there has been given, by registered or cer
tified mail, to the Company by the Trustee or to
the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the
outstanding Securities a written notice specifying
such failure or breach and requiring it to be
remedied and stating that such notice is a "Notice
of Default" hereunder;
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Securities of that series, the amount that then
shall have become due and payable on all such Securities of that series for
principal and premium, if any, or interest, or both, as the case may be, with
interest upon the overdue principal and premium, if any, and (to the extent that
payment of such interest is enforceable under applicable law and, if the
Securities are held by a NB Trust or a trustee of such trust, without
duplication of any other amounts paid by a NB Trust or trustee in respect
thereof) upon the overdue installments of interest at the rate or Yield to
Maturity (in the case of Original Issue Discount Securities) borne by the
Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabili ties incurred by the Trustee hereunder other than
through its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or
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any other obligor on such Securities and collect in the manner provided by law
out of the property of the Company or any other obligor on such Securities
wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Securities
of any series under Title 11, United States Code, or any other applicable law,
or in case a receiver or trustee shall have been appointed for the property of
the Company or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Securities of any
series, or to the creditors or property of the Company or such other obligor,
the Trustee, irrespective of whether the principal of the Securities of any
series shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 5.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest (or, if the
Securities of that series are Original Issue Discount Securities such portion of
the principal amount as may be specified in the terms of that series) owing and
unpaid in respect of the Securi ties of such series and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Securities of any series, or
to the creditors or property of the Company or such other obligor, unless
prohibited by applicable law and regulations, to vote on behalf of the holders
of the Securities or any series in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or person performing similar functions in comparable
proceedings, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee
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and each predecessor Trustee except as a result of negligence or
bad faith.
Nothing herein contained shall be construed to autho rize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrange ment, adjustment or
composition affecting the Securities of any series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof on
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.
Notwithstanding any provision in this Section 5.02, neither
the Trustee nor the Securityholders shall have the right to accelerate payment
of any series of the Securities or otherwise to declare such Securities due and
payable except as specifically set forth in Section 5.01.
SECTION 5.03. Application of Moneys Collected by
Trustee.
Any moneys collected by the Trustee shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Securities in respect of which
moneys have been collect ed, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of
collection applicable to such series and reasonable compensation
to the Trustee, its agents, attorneys and counsel, and of all
other expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith;
Second: To the payment of all Senior Obligations of
the Company if and to the extent required by Article Fifteen;
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Third: In case the principal of the outstanding Securities in
respect of which moneys have been collected shall not have become due and be
unpaid, to the payment of the amounts then due and unpaid upon Securities of
such series for principal (and premium, if any), and interest on the Securities
of such series, in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due on such Securities for princi pal (and premium, if any) and
interest, respectively.
SECTION 5.04. Proceedings by Securityholders.
(a) No holder of any Security of any series shall have any
right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless (i) such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to the Securities of such series specifying
such Event of Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Securities of that series then
outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby; (iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any such
action, suit or proceeding, and (v) during such 60 day period the holders of a
majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Security with every other taker and holder and the Trustee, that no one or more
holders of Securities of any series shall have any right in any manner whatever
by virtue of or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other holder of Securities, or to obtain
or seek to obtain priority over or preference to any other such holder, or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Securities of the
applicable series.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of (premium, if any) and interest, if any, on such Security, on or
after the same shall have become due and payable, or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the
consent of such holder and by accepting a Security hereunder it is expressly
understood, intended and covenanted by the taker and holder of
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every Security of such series with every other such taker and holder and the
Trustee, that no one or more holders of Securities of such series shall have any
right in any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
such Securities, or to obtain or seek to obtain priority over or preference to
any other such holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Securities of series. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 5.05. Proceedings by Trustee.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as otherwise provided in Section 2.08, all powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any other powers and remedies available to the Trustee or the holders of the
Securi ties, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements con tained in this Indenture or
otherwise established with respect to such series, and no delay or omission of
the Trustee or of any holder of any of the Securities to exercise any right or
power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of
any such default or an acquiescence therein; and, subject to the provisions of
Section 5.04, every power and remedy given by this Article Five or by law to the
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.
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SECTION 5.07. Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders.
The holders of a majority in aggregate principal amount of the
Securities of any or all series affected (voting as one class) at the time
outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that (subject to
the provisions of Section 6.01) the Trustee shall have the right to decline to
follow any such direction if the Trustee shall deter mine that the action so
directed would be unjustly prejudicial to the holders not taking part in such
direction or if the Trustee being advised by counsel determines that the action
or proceeding so directed may not lawfully be taken or if the Trustee in good
faith by its board of directors or trustees, executive committee, or a trust
committee of directors or trustees and/or Responsible Officers shall determine
that the action or proceedings so directed would involve the Trustee in personal
liability. Prior to any declaration accelerating the maturity of any series of
the Securities, or of all the Securities, as the case may be, the holders of a
majority in aggregate principal amount of the Securities of that series at the
time outstanding may on behalf of the holders of all of the Securities of such
series waive any past default or Event of Default including any default estab
lished pursuant to Section 2.03 and its consequences except a default (a) in the
payment of principal of, premium, if any, or interest on any of the Securities,
(b) in respect of covenants or provisions hereof which cannot be modified or
amended without the consent of the holder of each Security affected, or (c) a
default of the covenants contained in Section 3.06; provided, however, that if
the Securities of such series are held by a NB Trust or a trustee of such trust,
such waiver or modification to such waiver shall not be effective until the
holders of a majority in liquidation preference of Trust Securities of the
applicable NB Trust shall have consented to such waiver or modification to such
waiver; provided further, that if the consent of the Holder of each outstanding
Security is required, such waiver shall not be effective until each holder of
the Trust Securities of the applicable NB Trust shall have consented to such
waiver. Upon any such waiver, the default covered thereby shall be deemed to be
cured for all purposes of this Indenture and the Company, the Trustee and the
holders of the Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon. Upon any
such waiver the Company, the Trustee and the holders of the Securities of that
series (or of all Securities, as the case may be) shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon. Whenever any default or Event of Default hereunder
shall have been waived as permitted by this
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Section 5.07, such default or Event of Default shall for all purposes of the
Securities of that series (or of all Securities, as the case may be) and this
Indenture be deemed to have been cured and to be not continuing.
SECTION 5.08. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities of any series, mail to all
Securityholders of that series, as the names and addresses of such holders
appear upon the Security register, notice of all defaults with respect to that
series known to the Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the purpose of this Section
5.08 being hereby defined to be the events specified in clauses (a) and (b) of
Section 5.01, not including periods of grace, if any, provided for therein; and
provided that, except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such
series.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders of any series, holding in the aggregate more than 10% in
principal amount of the Securities of that series outstanding, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security against the
Company on or after the same shall have become due and payable.
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ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of any series of Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to securities of that series and after the curing or waiving of all
Events of Default which may have occurred, with respect to securities of that
series, under takes to perform such duties and only such duties as are specifi
cally set forth in this Indenture. In case an Event of Default with respect to
the Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to Securities of a series and after the
curing or waiving of all Events of Default with
respect to that series which may have oc curred
(1) the duties and obligations of the Trustee
with respect to Securities of a series shall
be determined solely by the express provi
sions of this Indenture, and the Trustee
shall not be liable except for the perfor
mance of such duties and obligations with
respect to such series as are specifically
set forth in this Indenture, and no implied
covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and
the correctness of the opinions expressed
therein, upon any certificates or opinions
furnished to the Trustee and conforming to
the requirements of this Indenture; but, in
the case of any such certificates or
opinions which by any provision hereof are
specifical ly required to be furnished to
the Trustee, the Trustee shall be under a
duty to examine
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the same to determine whether or not they
conform to the requirements of this Inden
ture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Offi cer
or Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascer taining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in
good faith, in accordance with the direction of
the Securityholders pursuant to Section 5.07,
relating to the time, method and place of conduct
ing any proceeding for any remedy available to the
Trustee, or exercising any trust or power con
ferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolu tion,
certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, note,
debenture or other paper or document be lieved by it
to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the
Company mentioned herein shall be sufficiently
evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein spe
cifically prescribed); and any Board Resolution
may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secre
tary of the Company;
(c) the Trustee may consult with counsel of its selec
tion and any advice or Opinion of Counsel shall be
full and complete authorization and protection in
respect of any action taken or suffered omitted by
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it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exer
cise any of the rights or powers vested in it by
this Indenture at the request, order or direction
of any of the Securityholders, pursuant to the
provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee
reasonable security or indemnity against the
costs, expenses and liabilities which may be in
curred therein or thereby;
(e) the Trustee shall not be liable for any action
taken or omitted by it in good faith and believed
by it to be authorized or within the discretion or
rights or powers conferred upon it by this Inden
ture; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to
a series of the Securities (that has not been
cured or waived) to exercise with respect to Secu
rities of that series such of the rights and pow
ers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise,
as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any inves
tigation 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, unless requested in writing to do so
by the holders of not less than a majority in
principal amount of the outstanding Securities of
the series affected thereby; provided, however,
that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the secu
rity afforded to it by the terms of this Inden
ture, the Trustee may require reasonable indemnity
against such expense or liability as a condition
to so proceeding; and
(g) the Trustee may execute any of the trusts or pow ers
hereunder or perform any duties hereunder either
directly or by or through agents (including any
Authenticating Agent) or attorneys, and the Trustee
shall not be responsible for any miscon-
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duct or negligence on the part of any such agent or
attorney appointed by it with due care.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in
the certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee and
the Authenticating Agent shall not be accountable for the use or application by
the Company of any Securities or the proceeds of any Securities authenticated
and delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying
Agents, Transfer Agents or Registrar May
Own Securities.
The Trustee or any Authenticating Agent or any paying agent or
any transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys
received by the Trustee or any paying agent shall, until used or applied as
herein provided, be held in trust for the purpose for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Trustee and any paying agent shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time to
time upon the written order of the Company, signed by the Chief Executive
Officer, the Chief Financial Officer, the President or a Vice President or the
Treasurer or an Assistant Treasurer of the Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as shall
be agreed to in writing between the Company and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee upon
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its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify each of the Trustee or any predecessor
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premis es. The obligations of the Company under this Section 6.06 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(a) or Section
5.01(b), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02,
whenever in the administration of the provisions of this Inden ture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certifi cate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken or omitted by it under the provisions of this Indenture upon the faith
thereof.
Any application by the Trustee for written instructions
from the appropriate party or parties may, at the option of the
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Trustee, set forth in writing any action proposed to be taken or omitted by the
Trustee under this Indenture and the date on and/or after which such action
shall be taken or such omission shall be effective. The Trustee shall not be
liable for any action taken by, or omission of, the Trustee in accordance with a
proposal included in such application on or after the date specified in such
application (which date shall not be less than three Business Days after the
date the appropriate party or parties actually receives such application, unless
any such officer shall have consented in writing to any earlier date) unless
prior to taking any such action (or the effective date in the case of an
omission), the Trustee shall have received written instructions in response to
such application specifying the action to be taken or omitted.
SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Inden ture Act.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corpora tion
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia or a corporation
or other Person permitted to act as trustee by the Commission authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal, state, territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 6.09 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.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
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SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to
one or more or all series of Securities by giving
written notice of such resignation to the Company
and by mailing notice thereof to the holders of
the applicable series of Securities at their ad
dresses as they shall appear on the Security reg
ister. Upon receiving such notice of resignation,
the Company shall promptly appoint a successor
trustee or trustees with respect to the applicable
series by written instrument, in duplicate, exe
cuted under the authority of a Board Resolution,
one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the succes
sor trustee. If no successor trustee shall have
been so appointed with respect to any series of
Securities and have accepted appointment within 30
days after the mailing of such notice of resigna
tion to the affected Securityholders, the resign
ing Trustee may petition any court of competent
jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona
fide holder of a Security or Securities of the
applicable series for at least six months may,
subject to the provisions of Section 5.09, on
behalf of himself and all others similarly
situated, petition any such court for the
appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall
occur --
(1) the Trustee shall fail to comply with the
provisions of subsection (a) of Section 6.08
after written request therefor by the
Company or by any Securityholder who has
been a bona fide holder of a Security or
Securities for at least six months, or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section
6.09 and shall fail to resign after written
request therefor by the Company or by any
such Securityholder, or
(3) the Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or
of its prop-
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erty shall be appointed, or any public
officer shall take charge or control of the
Trustee or of its property or affairs for
the purpose of rehabilitation, conservation
or liquidation, then, in any such case, the
Company may remove the Trustee and appoint a
successor trustee by written instrument, in
duplicate, executed under the authority of a
Board Resolution, one copy of which
instrument shall be delivered to the Trustee
so removed and one copy to the successor
trustee, or, subject to the provisions of
Section 5.09, any Securityholder who has
been a bona fide holder of a Security or
Securities of the applicable series for at
least six months may, on behalf of himself
and all others similarly situated, petition
any court of competent jurisdiction for the
removal of the Trustee and the appointment
of a successor trustee. Such court may
thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal
amount of the Securities of any series at the time
outstanding may at any time remove the Trustee
with respect to such series and nominate a succes
sor trustee with respect to the applicable series
of Securities or all series, as the case may be,
which shall be deemed appointed as successor
trustee with respect to the applicable series
unless within 10 days after such nomination the
Company objects thereto, in which case the Trustee
so removed or any Securityholder of the applicable
series, upon the terms and conditions and other
wise as in subsection (a) of this Section 6.10
provided, may petition any court of competent
jurisdiction for an appointment of a successor
trustee with respect to such series.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of
the provisions of this Section 6.10 shall be come
effective upon acceptance of appointment by the
successor trustee as provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10
shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the
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retiring trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with like
effect as if originally named as trustee herein; but, nevertheless, on the
written request of the Company or of the successor trustee, the trustee ceasing
to act shall, upon payment of any amounts then due it pursuant to the provisions
of Section 6.06, execute and deliver an instrument transferring to such
successor trustee all the rights and powers of the trustee so ceasing to act and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring trustee thereunder. Upon request of any such
successor trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a lien upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.06.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Company, the retiring
trustee and each successor trustee with respect to the Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring trustee
with respect to the Securities of any series as to which the predeces sor
trustee is not retiring shall continue to be vested in the predecessor trustee,
and shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trustee
hereunder by more than one trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such trustees co-trustees of the
same trust and that each such trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such trustee.
No successor trustee shall accept appointment as provided in
this Section 6.11 unless at the time of such accep tance such successor trustee
shall be qualified under the provi sions of Section 6.08 and eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as
provided in this Section 6.11, the Company shall mail notice of the succession
of such trustee hereunder to the holders of Securities of any applicable series
at their addresses as they shall appear on the Security register. If the Company
fails to mail such notice within 10 days after the acceptance of appoint-
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ment by the successor trustee, the successor trustee shall cause such notice to
be mailed at the expense of the Company.
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corpora tion resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities of any
series shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Securities so authenticated; and in case at that time
any of the Securities of any series shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor trustee; and in all
such cases such certificates shall have the full force which it is anywhere in
the Securities of such series or in this Indenture provided that the certificate
of the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate
Securities of any series in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a
Creditor.
The Trustee shall comply with Section 3.11(a) of the Trust
Indenture Act, excluding any creditor relationship de scribed in Section 3.11(b)
of the Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 3.11(a) of the Trust Indenture Act to the extent included
there in.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by
the Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities of any
series issued upon exchange or transfer thereof as fully to all intents and
purposes as though any such Authenticating Agent had been expressly authorized
to authenticate and deliver Securities of such series; provided, that the
Trustee shall have no liability to the Company for any acts or omissions of the
Authenticating
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Agent with respect to the authentication and delivery of Securities of any
series. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
or territory thereof or of the District of Columbia authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of at
least $5,000,000 and being 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 the
requirements of such authority, then for the purposes of this Section 6.14 the
combined capital and surplus of such corporation shall be deemed to be its com
bined capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provi sions of this Section, it shall resign immediately in
the manner and with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
such Authenticat ing Agent hereunder, if such successor corporation is otherwise
eligible under this Section 6.14 without the execution or filing of any paper or
any further act on the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign with respect
to one or more or all series of Securities by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenti cating Agent with respect to one or more or
all series of Securi ties by giving written notice of termination to such
Authenticat ing Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent with respect to the applicable series eligible
under this Section 6.14, shall give written notice of such appointment to the
Company and shall mail notice of such appointment to all holders of the
applicable series of Securities as the names and addresses of such holders
appear on the Security register. Any successor Authenticating Agent with respect
to all or any series upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities with respect to such
series of its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services. Any
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Authenticating Agent shall have no responsibility or liability for any action
taken by it as such in accordance with the direc tions of the Trustee.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of
a specified percentage in aggregate principal amount of the Securities of any or
all series may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action)
the fact that at the time of taking any such action the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by such Securityholders
in person or by agent or proxy appointed in writing, or (b) by the record of
such holders of Securities voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions of
Article Eight, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders of any
series any request, demand, authorization, direction, notice, consent, waiver or
other action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authoriza tion,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Out standing Securities of that series
shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
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SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or his agent or
proxy shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Securities shall be proved by the
Security register or by a certificate of the Security registrar. The Trustee may
require such additional proof of any matter referred to in this Section as it
shall deem necessary.
The record of any Securityholders' meeting shall be proved in
the manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any
Security, the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Security registrar may deem the Person in whose name
such Security shall be registered upon the Security register (including a
Depositary in the case of a Global Security) to be, and may treat him as, the
absolute owner of such Security (whether or not such Security shall be overdue)
for the purpose of receiving payment of or on account of the principal of,
premium, if any, and interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any Authenticating Agent nor any paying
agent nor any transfer agent nor any Security registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being or upon his order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Security.
SECTION 7.04. Securities Owned by Company Deemed Not
Outstanding.
In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company or any
other obligor on the Securities or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities shall be disre garded and deemed
not to be outstanding for the purpose of any such determination; provided that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Securities which the
Trustee actually knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 7.04 if the pledgee
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shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Securities and that the pledgee is not the Company or any such other
obligor or person directly or indirect ly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders
Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Security specified in
this Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor) the
serial number of which is shown by the evidence to be includ ed in the
Securities the holders of which have consented to such action may, by filing
written notice with the Trustee at its principal office and upon proof of
holding as provided in Section 7.02, revoke such action so far as concerns such
Security (or so far as concerns the principal amount represented by any
exchanged or substituted Security). Except as aforesaid any such action taken by
the holder of any Security shall be conclusive and binding upon such holder and
upon all future holders and owners of such Security, and of any Security issued
in exchange or substitution therefor, irrespective of whether or not any nota
tion in regard thereto is made upon such Security or any Security issued in
exchange or substitution therefor.
ARTICLE EIGHT
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.
A meeting of Securityholders of any or all series may be
called at any time and from time to time pursuant to the provisions of this
Article Eight for any of the following purpos es:
(a) to give any notice to the Company or to the Trust ee,
or to give any directions to the Trustee, or to
consent to the waiving of any default hereunder and
its consequences, or to take any other action
authorized to be taken by Securityholders pursuant to
any of the provisions of Article Five;
(b) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article Six;
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(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the
provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or
on behalf of the holders of any specified ag gregate
principal amount of such Securities under any other
provision of this Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders
of any or all series to take any action specified in Section 8.01, to be held at
such time and at such place in the Borough of Manhattan, The City of New York,
as the Trustee shall determine. Notice of every meeting of the Securityholders
of any or all series, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall be
mailed to holders of Securities of each series affected at their addresses as
they shall appear on the Securities of each series affected register. Such
notice shall be mailed not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or
Securityholders.
In case at any time the Company pursuant to a resolu tion of
the Board of Directors, or the holders of at least 10% in aggregate principal
amount of the Securities of any or all series, as the case may be, then
outstanding, shall have request ed the Trustee to call a meeting of
Securityholders of any or all series, as the case may be, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have mailed the notice of such meeting within
20 days after receipt of such request, then the Company or such Securityholders
may determine the time and the place in said Borough of Manhattan for such
meeting and may call such meeting to take any action authorized in Section 8.01,
by mailing notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a
person shall (a) be a holder of one or more Securities with respect to which the
meeting is being held or (b) a person appointed by an instrument in writing as
proxy by a holder of one or more such Securities. The only persons who shall be
entitled to be present or to speak at any meeting of Securityholders shall be
the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee
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and its counsel and any representatives of the Company and its
counsel.
SECTION 8.05. Regulations.
Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Securityholders, in regard to proof of the holding of Securities and
of the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a perma nent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 7.04, at any meeting each
holder of Securities with respect to which such meeting is being held or proxy
therefor shall be entitled to one vote for each $1,000 principal amount (in the
case of Original Issue Discount Securities, such principal amount to be
determined as provided in the definition "outstanding") of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security chal lenged as not outstanding and ruled
by the chairman of the meeting to be not outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Securities held by
him or instruments in writing as aforesaid duly designating him as the person to
vote on behalf of other Securityholders. Any meeting of Securityholders duly
called pursuant to the provisions of Section 8.02 or 8.03 may be adjourned from
time to time by a majority of those present, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of
holders of Securities with respect to which such meeting is being held shall be
by written ballots on which shall be sub scribed the signatures of such holders
or of their representa tives by proxy and the serial number or numbers of the
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their
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verified written reports in triplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Securityholders shall
be prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowl edge of the
facts setting forth a copy of the notice of the meeting and showing that the
notice was mailed as provided in Section 8.02. The record shall show the serial
numbers of the Securities voting in favor of or against any resolution. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclu
sive evidence of the matters therein stated.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent
of Securityholders.
The Company and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as then in effect), without
the consent of the Securityholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to
the Company, or successive successions, and the
assumption by the successor corporation of the
covenants, agreements and obligations of the Com pany
pursuant to Article Ten hereof;
(b) to add to the covenants of the Company such fur
ther covenants, restrictions or conditions for the
protection of the holders of all or any series of
Securities (and if such covenants are to be for
the benefit of less than all series of Securities
stating that such covenants are expressly being
included for the benefit of such series) as the
Company and the Trustee shall consider to be for
the protection of the holders of such Securities,
and to make the occurrence, or the occurrence and
continuance, of a default in any of such
additional covenants, restrictions or conditions a
default or an Event of Default permitting the
enforcement of all or any of the several remedies
provided in this Indenture as herein set forth;
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provided, however, that in respect of any such
additional covenant, restriction or condition such
supplemental indenture may provide for a particular
period of grace after default (which period may be
shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate
enforcement upon such default or may limit the
remedies available to the Trustee upon such default;
(c) to provide for the issuance under this Indenture of
Securities in coupon form (including Securities
registrable as to principal only) and to provide for
exchangeability of such Securities with the
Securities issued hereunder in fully registered form
and to make all appropriate changes for such purpose;
(d) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supple
mental indenture which may be defective or incon
sistent with any other provision contained herein
or in any supplemental indenture, or to make such
other provisions in regard to matters or questions
arising under this Indenture; provided that any
such action shall not adversely affect the inter
ests of the holders of the Securities;
(e) to add to, delete from, or revise the terms of
Securities of any series as permitted by Section
2.01 and 2.03, including, without limitation, any
terms relating to the issuance, exchange, regis
tration or transfer of Securities issued in whole
or in part in the form of one or more global Secu
rities and the payment of any principal thereof,
or interest or premium, if any, thereon;
(f) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with
respect to the Securities of one or more series
and to add to or change any of the provisions of
this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to
the requirements of Section 6.11;
(g) to provide for uncertificated Securities in
addition to or in place of certificated
Securities;
(h) to make any change that does not adversely affect
the rights of any Securityholder in any material
respect; or
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(i) to provide for the issuance of and establish the form
and terms and conditions of the Securities of any
series, to establish the form of any certifi cations
required to be furnished pursuant to the terms of
this Indenture or any series of Securi ties, or to
add to the rights of the holders of any series of
Securities.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securi ties at the time outstanding,
notwithstanding any of the provi sions of Section 9.02.
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders.
With the consent (evidenced as provided in Section 7.01) of
the holders of not less than a majority in aggregate principal amount of the
Securities at the time outstanding of all series affected by such supplemental
indenture (voting as a class), the Company and the Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act then in effect) for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Securities of each
series so affected; provided, however, that no such supplemental indenture shall
without the consent of the holders of each security then outstanding and
affected thereby (i) extend the fixed maturity of any Security of any series, or
reduce the rate or extend the time of payment of interest there on, or reduce
the principal amount thereof or any premium there on, or reduce any amount
payable on redemption thereof or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than that provided in the
Securi ties, or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon an accelera tion of the maturity
thereof pursuant to Section 5.01 or the amount thereof provable in bankruptcy
pursuant to Section 5.02, or impair or affect the right of any Securityholder to
institute suit for payment thereof or the right of repayment, if any, at the
option of the holder, without the consent of the holder of
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each Security so affected, or (ii) reduce the aforesaid percent age of
Securities the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of each Security then affected
provided, further, that if the Securities of such series are held by a NB Trust
or a trustee of such trust, such supplemental indenture shall not be effective
until the holders of a majority in liquidation preference of Trust Securities of
the applicable Trust shall have consented to such supplemental indenture;
provided further, that if the consent of the Holder of each outstanding Security
is required, such supplemental indenture shall not be effective until each
holder of the Trust Securities of the applicable NB Trust shall have consented
to such supplemental indenture.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of Securityholders of such series with respect to such
covenant or provision, shall be deemed not to affect the rights under this
Indenture or the Securityholders of any other series.
Upon the request of the Company accompanied by a copy of a
Board Resolution authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Inden ture or
otherwise, in which case the Trustee may in its discre tion, but shall not be
obligated to, enter into such supplemental indenture. The Trustee may receive an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the
provisions of this Article to join in the execution thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice, prepared
by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders of all series affected thereby as
their names and addresses appear upon the Security register. Any failure of the
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
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SECTION 9.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions
of this Article Nine shall comply with the Trust Indenture Act, as then in
effect. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article Nine, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Securities of each series
affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.04. Notation on Securities.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture affecting such series pursuant to the
provisions of this Article Nine may bear a notation in form approved by the
Trustee as to any matter provid ed for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Securities of any series so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture con tained in any such
supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee or the Authenticating Agent and delivered in
exchange for the Securities of any series then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee.
The Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article Nine.
ARTICLE TEN
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.
SECTION 10.01. Company May Consolidate, etc., on Cer-
tain Terms.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company, as the case may be),
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or successive consolidations or mergers in which the Company, as the case may
be, or its successor or successors shall be a party or parties, or shall prevent
any sale, conveyance, transfer or other disposition of the property of the
Company, as the case may be, or its successor or successors as an entirety, or
substan tially as an entirety, to any other corporation (whether or not
affiliated with the Company, as the case may be, or its successor or successors)
authorized to acquire and operate the same; provided, however, the Company
hereby covenants and agrees that, upon any such consolidation, merger, sale,
conveyance, transfer or other disposition, the due and punctual payment, in the
case of the Company, of the principal of, premium, if any, and inter est on all
of the Securities of all series in accordance with the terms of each series,
according to their tenor and the due and punctual performance and observance of
all the covenants and conditions of this Indenture with respect to each series
or established with respect to such series pursuant to Section 2.03 to be kept
or performed by the Company shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as
then in effect) satis factory in form to the Trustee executed and delivered to
the Trustee by the entity formed by such consolidation, or into which the
Company, as the case may be, shall have been merged, or by the entity which
shall have acquired such property.
SECTION 10.02. Successor Corporation to be Substituted
for Company.
In case of any such consolidation, merger, conveyance or
transfer and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and premium, if
any, and interest on all of the Securities and the due and punctual performance
and observance of all of the covenants and conditions of this Inden ture or the
Declaration to be performed or observed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
Company thereupon shall be relieved of any further liability or obligation
hereunder or upon the Securities. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor corporation instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Securities which previously shall have been signed and delivered
by the officers of the Company to the Trustee or the Authenticating Agent for
authentication, and any Securities which such successor corporation thereafter
shall cause to be
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signed and delivered to the Trustee or the Authenticating Agent for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Indentures had been issued at the date of the execution hereof.
SECTION 10.03. Opinion of Counsel to be Given Trustee.
The Trustee, subject to the provisions of Sections 6.01
and 6.02, may receive an Opinion of Counsel as conclusive evi dence that any
consolidation, merger, conveyance or transfer, and any assumption, permitted or
required by the terms of this Article Ten complies with the provisions of this
Article Ten.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE.
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for
cancellation all Securities theretofore authenticated (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.08) and not theretofore canceled, or
(b) all the Securities not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption all of the Securities (other
than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.08) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of maturity or
redemp tion date, as the case may be, but excluding, however, the amount of any
moneys for the payment of principal of, and premium, if any, or interest on the
Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 11.04, or (2) paid to any state or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect except for the provisions of Sections 2.05, 2.07, 2.08, 3.01, 3.02, 3.04,
6.06, 6.10 and 11.04 hereof shall survive until such Securities shall mature and
be paid. Thereaf ter, Sections 6.10 and 11.04 shall survive, and the Trustee, on
demand of the Company accompanied by any Officers' Certificate and an Opinion of
Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfac tion of and discharging this Indenture, the
Company, however,
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hereby agreeing to reimburse the Trustee for any costs or expens es thereafter
reasonably and properly incurred by the Trustee in connection with this
Indenture or the Securities.
SECTION 11.02. Deposited Moneys and U.S. Government
Obligations to be Held in Trust by
Trustee.
Subject to the provisions of Section 11.04, all moneys and
U.S. Government Obligations deposited with the Trustee pursuant to Sections
11.01 or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its own
paying agent), to the holders of the particular Securities for the payment of
which such moneys or U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 11.05 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the holders of outstanding Securities.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Securities (other than the Trustee)
shall, upon demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying
agent for payment of the principal of, and premium, if any, or interest on
Securities and not applied but remaining unclaimed by the holders of Securities
for three years after the date upon which the principal of, and premium, if any,
or interest on such Securities, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee or such paying agent on
written demand; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
and all liability of the Trustee or such paying agent with respect to such
moneys shall thereupon cease.
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SECTION 11.05. Defeasance Upon Deposit of Moneys or
U.S. Government Obligations.
The Company shall be deemed to have been Discharged (as
defined below) from its respective obligations with respect to any series of
Securities on the 91st day after the applicable conditions set forth below have
been satisfied with respect to any series of Securities at any time after the
applicable condi tions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be
deposited irrevocably with the Trustee or the
Defeasance Agent (as defined below) as trust funds in
trust, specifically pledged as security for, and
dedicated solely to, the benefit of the hold ers of
the Securities of such series (i) money in an amount,
or (ii) U.S. Government Obligations which through the
payment of interest and princi pal in respect thereof
in accordance with their terms will provide, not
later than one day before the due date of any
payment, money in an amount, or (iii) a combination
of (i) and (ii), suffi cient, in the opinion (with
respect to (ii) and (iii)) of a nationally recognized
firm of indepen dent public accountants expressed in
a written certification thereof delivered to the
Trustee and the Defeasance Agent, if any, to pay and
discharge each installment of principal (including
any man datory sinking fund payments) of, and
interest and premium, if any, on, the outstanding
Securities of such series on the dates such
installments of principal, interest or premium are
due;
(2) if the Securities of such series are then listed
on any national securities exchange, the Company
shall have delivered to the Trustee and the Defea
sance Agent, if any, an Opinion of Counsel to the
effect that the exercise of the option under this
Section 11.05 would not cause such Securities to
be delisted from such exchange;
(3) no Event of Default or event which with notice or
lapse of time would become an Event of Default with
respect to the Securities of such series shall have
occurred and be continuing on the date of such
deposit; and
(4) the Company shall have delivered to the Trustee and
the Defeasance Agent, if any, an Opinion of Counsel
to the effect that holders of the Securi ties of such
series will not recognize income, gain or loss for
United States federal income tax purposes as a result
of the exercise of the option
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under this Section 11.05 and will be subject to
United States federal income tax on the same amount
and in the same manner and at the same times as would
have been the case if such option had not been
exercised, and, in the case of the Securities of such
series being Discharged, such opinion shall be
accompanied by a private letter ruling to that effect
received from the United States Internal Revenue
Service or a revenue rul ing pertaining to a
comparable form of transaction to that effect
published by the United States Internal Revenue
Service.
"Discharged" means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by, and obligations
under, the Securities of such series and to have satisfied all the obligations
under this Indenture relating to the Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of holders of Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of and the interest and premium, if any, on such Securities when such
payments are due; (B) the Company's obligations with respect to such Securities
under Sections 2.07, 2.08, 5.02 and 11.04; and (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which
is eligible to act as Trustee hereunder and which assumes all of the obligations
of the Trustee necessary to enable the Trustee to act hereunder. In the event
such a Defeasance Agent is appointed pursuant to this section, the following
conditions shall apply:
1. The Trustee shall have approval rights over the
document appointing such Defeasance Agent and the
document setting forth such Defeasance Agent's
rights and responsibilities;
2. The Defeasance Agent shall provide verification to
the Trustee acknowledging receipt of sufficient
money and/or U. S. Government Obligations to meet
the applicable conditions set forth in this Sec
tion 11.05;
3. The Trustee shall determine whether the Company shall
be deemed to have been Discharged from its respective
obligations with respect to any series of Securities.
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ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 12.01. Indenture and Securities Solely Corpo
rate Obligations.
No recourse for the payment of the principal of or premium, if
any, or interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation of the Company, either directly or through the Company or any
successor corporation of the Company, whether by virtue of any constitu tion,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Securities.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS.
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agree ments in
this Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Inden ture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by appropriate
authority of its Board of Directors and delivered to the Trustee may surrender
any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and as
to any successor corporation.
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SECTION 13.04. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, NationsBank Corporation, NationsBank Corporate Center,
Charlotte, North Carolina 28255, Attention: Treasurer. Any notice, direction,
request or demand by any Securityholder to or upon the Trustee shall be deemed
to have been sufficiently given or made, for all purposes, if given or made in
writing at the office of the Trustee, addressed to the Trustee, 101 Barclay
Street, 21 West, New York, New York 10286, Attention: Corporate Trust Trustee
Administration.
SECTION 13.05. Governing Law.
This Indenture and each Security shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of said State,
without regard to conflicts of laws principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions
Precedent.
Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that in the
opinion of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion of the Company provided for in
this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
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SECTION 13.07. Legal Holidays.
In any case where the date of payment of interest on or
principal of the Securities will be in New York, New York or in Charlotte, North
Carolina a legal holiday or a day on which banking institutions are authorized
by law to close, the payment of such interest on or principal of the Securities
need not be made on such date but may be made on the next succeeding Business
Day, with the same force and effect as if made on the date of payment and no
interest shall accrue for the period from and after such date.
SECTION 13.08. Trust Indenture Act to Control.
If and to the extent that any provision of this Inden ture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included in this Indenture by any of Sections 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This Indenture may be executed in any number of coun terparts,
each of which shall be an original, but such counter parts shall together
constitute but one and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this
Indenture or in the Securities of any series 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 Indenture or of
such Securities, but this Indenture and such Securities shall be con strued as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of
its respective rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company, provided that, in the event of
any such assignment, the Company, as the case may be, will remain liable for all
such obligations.
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Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Securities
held by a NB Trust or a trustee of such trust, if the Property Trustee of such
Trust fails to enforce its rights under this Indenture as the holder of the
series of Securities held as the assets of such NB Trust, any holder of
Preferred Securities may institute legal proceedings directly against the
Company to enforce such Property Trustee's rights under this Indenture without
first instituting any legal proceedings against such Property Trustee or any
other person or entity.
ARTICLE FOURTEEN
REDEMPTION OF SECURITIES
SECTION 14.01. Applicability of Article.
The provisions of this Article shall be applicable to the
Securities of any series which are redeemable before their maturity or to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 2.03 for Securities of such series.
SECTION 14.02. Notice of Redemption; Selection of Secu-
rities.
In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of the Securities of any series in
accordance with their terms, it shall fix a date for redemption and shall mail a
notice of such redemption at least 30 and not more than 60 days prior to the
date fixed for redemption to the holders of Securities of such series so to be
redeemed as a whole or in part at their last addresses as the same appear on the
Security register. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the holder of any
Security of a series designated for redemp tion as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security
of such series.
Each such notice of redemption shall specify the CUSIP number
of the Securities to be redeemed, the date fixed for redemption, the redemption
price at which Securities of such series are to be redeemed, the place or places
of payment, that
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payment will be made upon presentation and surrender of such Securities, that
interest accrued to the date fixed for redemp tion will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. If less than all the Securities of
such series are to be redeemed the notice of redemption shall specify the
numbers of the Securities of that series to be redeemed. In case any Security of
a series is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state that
on and after the date fixed for redemption, upon surrender of such Security, a
new Security or Securities of that series in principal amount equal to the
unredeemed portion thereof will be issued.
Prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or 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
appropriate redemption price, together with accrued interest to the date fixed
for redemption.
If all, or less than all, the Securities of a series are to be
redeemed, the Company will give the Trustee notice not less than 45 or 60 days,
respectively, prior to the redemption date as to the aggregate principal amount
of Securities of that series to be redeemed and the Trustee shall select, in
such manner as in its sole discretion it shall deem appropriate and fair, the
Securities of that series or portions thereof (in integral multiples of $1,000,
except as otherwise set forth in the applicable form of Security) to be
redeemed.
SECTION 14.03. Payment of Securities Called for Redemp
tion.
If notice of redemption has been given as provided in Section
14.02, the Securities or portions of Securities of the series with respect to
which such notice has been given shall become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and
after said date (unless the Company shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities of any series so called for
redemption shall cease to accrue. 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 Company at
the applicable redemption price, together with interest accrued thereon to the
date fixed for redemption.
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Upon presentation of any Security of any series re deemed in
part only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to the holder thereof, at the expense of the Company, a
new Security or Securi ties of such series of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so pre sented.
ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of
Securities issued hereunder and under any supplemental indenture or by any
resolutions by the Board of Directors ("Additional Provisions") by such
Securityholder's acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article Fifteen;
and each holder of a Security, whether upon original issue or upon transfer or
assign ment thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, premi um, if
any, and interest on all Securities issued hereunder and under any Additional
Provisions shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full of all
Senior Obligations of the Company, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article Fifteen shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 15.02. Default on Senior Obligations.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
on any Senior Obligations of the Company, as the case may be, or in the event
that the maturity of any Senior Obligations of the Company, as the case may be,
has been accelerated because of a default, then, in either case, no payment
shall be made by the Company with respect to the princi pal (including
redemption payments) of, or premium, if any, or interest on the Securities.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Obligations or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior
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Obligations may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Obligations (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Obligations and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Obligations.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Obligations
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Securi ties;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the
Securityholders or the Trustee would be entitled to receive from the Company,
except for the provisions of this Article Fifteen, shall be paid by the Company
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribu tion, or by the Securityholders or by the
Trustee under the Indenture if received by them or it, directly to the holders
of Senior Obligations of the Company (pro rata to such holders on the basis of
the respective amounts of Senior Obligations held by such holders, as calculated
by the Company) or their represen tative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
such Senior Obligations may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Obligations in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Obligations, before any payment or
distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Obligations of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Obligations or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Obligations
may have been
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issued, and their respective interests may appear, as calculated by the Company,
for application to the payment of all Senior Obligations of the Company, as the
case may be, remaining unpaid to the extent necessary to pay such Senior
Obligations in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Obligations.
For purposes of this Article Fifteen, the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordi nated at least to the extent provided in this
Article Fifteen with respect to the Securities to the payment of all Senior
Obligations of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Obligations is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Obligations are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolu tion of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article Ten of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Ten of this Indenture.
Nothing in Section 15.02 or in this Section 15.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.05 of this Indenture.
SECTION 15.04. Subrogation.
Subject to the payment in full of all Senior Obligations of
the Company, the rights of the Securityholders shall be subrogated to the rights
of the holders of such Senior Obligations to receive payments or distributions
of cash, property or securities of the Company, as the case may be, applicable
to such Senior Obligations until the principal of (and premium, if any) and
interest on the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Obligations of any cash, property or securities to which the Securityholders or
the Trustee would be entitled except for the provisions of this Article Fifteen,
and no payment over pursuant to the provisions of this Article Fifteen to or for
the benefit of the holders of such Senior Obligations by Securityholders or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Obligations of the Company, and the holders of the
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Securities, be deemed to be a payment by the Company to or on account of such
Senior Obligations. It is understood that the provisions of this Article Fifteen
are and are intended solely for the purposes of defining the relative rights of
the holders of the Securities, on the one hand, and the holders of such Senior
Obligations on the other hand.
Nothing contained in this Article Fifteen or elsewhere in this
Indenture, any Additional Provisions or in the Securities is intended to or
shall impair, as between the Company, its creditors other than the holders of
Senior Obligations of the Company, and the holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
hold ers of the Securities the principal of (and premium, if any) and interest
on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Senior Obligations of the Company, as the
case may be, nor shall anything herein or therein prevent the Trustee or the
holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under the Indenture, subject to the rights, if any,
under this Article Fifteen of the holders of such Senior Obligations in respect
of cash, property or securities of the Company, as the case may be, received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article Fifteen, the Trustee, subject to the provisions of
Article Six of this Indenture, and the Securityholders shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Securityholders, for
the purposes of ascertaining the Per sons entitled to participate in such
distribution, the holders of Senior Obligations and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Fifteen.
SECTION 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such Securityholder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Fifteen and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
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SECTION 15.06. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Fifteen. Notwithstanding
the provi sions of this Article Fifteen or any other provision of this Indenture
or any Additional Provisions, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article Fifteen, unless and until a Responsible Officer of
the Trustee shall have received written notice thereof from the Company or a
holder or holders of Senior Obligations or from any trustee therefor; and before
the receipt of any such written notice, the Trustee, subject to the provisions
of Article Six of this Indenture, shall be entitled in all respects to assume
that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 15.06 at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (in cluding, without limitation, the payment of the
principal of (or premium, if any) or interest on any Debenture), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purposes
for which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article Six of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing him self to be a holder of Senior
Obligations of the Company, as the case may be (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such Senior
Obligations or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Obligations to
participate in any payment or distribution pursuant to this Article Fifteen, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Obligations held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Fifteen, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
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SECTION 15.07. Rights of the Trustee; Holders of Senior
Obligations.
The Trustee in its individual capacity shall be enti tled to
all the rights set forth in this Article Fifteen in re spect of any Senior
Obligations at any time held by it, to the same extent as any other holder of
Senior Obligations, and nothing in this Indenture or any Additional Provisions
shall de prive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Obligations of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article Fifteen,
and no implied covenants or obligations with respect to the holders of such
Senior Obligations shall be read into this Indenture or any Additional
Provisions against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Obligations and, subject to the
provisions of Article Six of this Indenture, the Trustee shall not be liable to
any holder of such Senior Obligations if it shall pay over or deliver to
Securityholders, the Company or any other Person money or assets to which any
holder of such Senior Obligations shall be entitled by virtue of this Article
Fifteen or otherwise.
Nothing in this Article Fifteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Obligations of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company, as the case may be, or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company, as the
case may be, with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Obligations of the Company may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article
Fifteen or the obligations hereunder of the holders of the Securities to the
holders of such Senior Obligations, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Senior Obligations, or otherwise amend or supplement in
any manner such Senior Obligations or any instrument evidenc-
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ing the same or any agreement under which such Senior Obligations is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Obligations; (iii) release
any Person liable in any manner for the collection of such Senior Obligations;
and (iv) exercise or refrain from exercising any rights against the Company, as
the case may be, and any other Person.
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The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective authorized officers, as of the
day and year first above written.
NATIONSBANK CORPORATION
By _________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By _________________________
Name:
Title:
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STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
On the __ day of November, 1996, before me personally came _____, to me
known, who, being by me duly sworn, did depose and say that he resides at
Charlotte, North Carolina; that he is an Senior Vice President of NationsBank
Corporation, one of the parties described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to the said instrument is such corporate seal; that it was so affixed by
authority of the board of directors of said corporation, and that he signed his
name thereto by like authority.
----------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK
COUNTY OF NEW YORK
On the __ day of November, 1996, before me personally came _____, to me
known, who, being by me duly sworn, did depose and say that he resides
at_____________; that he is an _________ of The Bank of New York, one of the
parties described in and which executed the above instrument; and that such
execution was by authority of the board of directors of said corporation.
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Exhibit 4.11
====================================
FIRST SUPPLEMENTAL INDENTURE
between
NATIONSBANK CORPORATION
and
THE BANK OF NEW YORK
Dated as of November __, 1996
=====================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms....................................................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1 Designation and Principal Amount.......................................................3
SECTION 2.2 Maturity...............................................................................4
SECTION 2.3 Form and Payment.......................................................................4
SECTION 2.4 Global Form............................................................................4
SECTION 2.5 Interest...............................................................................6
ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.1 Tax Event Redemption...................................................................7
SECTION 3.2 Optional Redemption by Company.........................................................8
SECTION 3.3 No Sinking Fund........................................................................9
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period...................................................9
SECTION 4.2 Notice of Extension...................................................................10
Section 4.3 Limitation of Transactions............................................................10
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses...................................................................11
Section 5.2 Payment Upon Resignation or Removal...................................................12
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1 Listing on an Exchange................................................................12
i
<PAGE>
Page
ARTICLE VII
FORM OF NOTE
SECTION 7.1 Form of Note..........................................................................13
ARTICLE VIII
ORIGINAL ISSUE OF NOTES
SECTION 8.1 Original Issue of Notes...............................................................22
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture.............................................................22
SECTION 9.2 Trustee Not Responsible for Recitals..................................................22
SECTION 9.3 Governing Law.........................................................................22
SECTION 9.4 Separability..........................................................................23
SECTION 9.5 Counterparts..........................................................................23
</TABLE>
ii
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of November __,
1996 (the "First Supplemental Indenture"), between NATIONSBANK CORPORATION, a
North Carolina corporation (the "Company"), and THE BANK OF NEW YORK, as
trustee, (the "Trustee") under the Indenture dated as of November __, 1996
between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the issuance of the Company's unsecured junior
subordinated debt securities to be issued 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 Indenture, the Company
desires to provide for the establishment of a series of its Securities to be
known as its ____% Junior Subordinated Deferrable Interest Notes due 2026 (the
"Notes"), the form and substance of such Notes and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture;
WHEREAS, NB Capital Trust I, a Delaware statutory business
trust (the "Trust"), has offered to the public $________ aggregate liquidation
amount of its ____% Trust Originated Preferred Securities (the "Preferred
Securities"), representing 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 $_________
million aggregate liquidation amount of its ____% Trust Originated Common
Securities, in $___________ million aggregate principal amount (the "Common
Securities"); and
WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture, and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Notes, 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 First Supplemental Indenture
have been duly authorized in all respects:
<PAGE>
NOW THEREFORE, in consideration of the purchase and acceptance
of the Notes by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Notes 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 has the same
meaning when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First 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 First Supplemental Indenture;
(e) headings are for convenience of reference only and
do not affect interpretation;
(f) the following terms have the meanings given to
them in the Declaration: (i) Business Day; (ii) Clearing Agency;
(iii) Delaware Trustee; (iv) Depositary; (v) No Recognition
Opinion; (vi) Preferred Security Certificate; (vii) Property
Trustee; (viii) Regular Trustees; (ix) Tax Event; and (x)
Underwriting Agreement;
(g) the following terms have the meanings given to
them in this Section 1.1(g):
"Additional Interest" shall have the meaning set forth
in Section 2.5.
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"Compounded Interest" shall have the meaning set forth
in Section 4.1.
"Declaration" means the Amended and Restated Declaration of
Trust of NB Capital Trust I, a Delaware statutory business trust, dated as of
November __, 1996.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Election" means that, as a result of the election
of the Company, the Trust is to be dissolved in accordance with the Declaration,
and the Notes held by the Property Trustee are to be distributed to the holders
of the Trust Securities issued by the Trust pro rata in accordance with the
Declaration.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
"Global Note" shall have the meaning set forth in
Section 2.4.
"Maturity Date" means the date on which the Notes mature and
on which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional Interest,
if any.
"Non-Book-Entry Preferred Securities" shall have the
meaning set forth in Section 2.4.
"Optional Redemption Price" shall have the meaning set
forth in Section 3.2.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1 Designation and Principal Amount.
There is hereby authorized a series of Securities designated
the "____% Junior Subordinated Deferrable Interest Notes due 2026", limited in
aggregate principal amount to
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$___________, which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Notes pursuant to Section 2.04 of
the Indenture.
SECTION 2.2 Maturity.
The Maturity Date is ______, 2026.
SECTION 2.3 Form and Payment.
Except as provided in Section 2.4, the Notes shall be issued
in fully registered certificated form without interest coupons. Principal and
interest on the Notes issued in certificated form will be payable, the transfer
of such Notes will be registrable and such Notes will be exchangeable for Notes
bearing identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest 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. Notwithstanding the foregoing, so long as the Holder of any
Notes is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest and Additional Interest, if any) on such Notes
held by the Property Trustee will be made at such place and to such account as
may be designated by the Property Trustee.
SECTION 2.4 Global Form
(a) In connection with a Dissolution Election,
(i) the Notes in certificated form may be
presented to the Trustee by the Property Trustee in exchange for a Global Note
in an aggregate principal amount equal to the aggregate principal amount of all
outstanding Notes (a "Global Note"), to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the instructions of
the Regular Trustees. Upon any such presentation, the Company shall execute a
Global Note in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the Indenture and
this First Supplemental Indenture. Payments on the Notes issued as a Global Note
will be made to the Depositary; and
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(ii) if any Preferred Securities are held in Non-
Book-Entry certificated form, the Notes in certificated form may be presented to
the Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held by the
Clearing Agency or its nominee ("Non-Book-Entry Preferred Securities") will be
deemed to represent beneficial interests in Notes presented to the Trustee by
the Property Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of the Non-Book-Entry Preferred Securities until such
Preferred Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security Certificates will
be canceled and a Note, registered in the name of the holder of the Preferred
Security Certificate or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Security Certificate canceled,
will be executed by the Company and delivered to the Trustee for authentication
and delivery in accordance with the Indenture and this First Supplemental
Indenture. On issue of such Notes, Notes with an equivalent aggregate principal
amount that were presented by the Property Trustee to the Trustee will be deemed
to have been canceled.
(b) A Global Note may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good standing
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, and a successor Depositary for such series 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, the Company will
execute, and, subject to Article II of the Indenture, the Trustee, upon written
notice from the Company, will authenticate and make available for delivery the
Notes in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Note in exchange for such Global
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Note. In addition, the Company may at any time determine that the Notes shall no
longer be represented by a Global Note. In such event the Company will execute,
and subject to Section 2.07 of the Indenture, the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Company, will
authenticate and deliver the Notes in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Note in exchange for such Global Note.
Upon the exchange of the Global Note for such Notes in definitive registered
form without coupons, in authorized denominations, the Global Note shall be
canceled by the Trustee. Such Notes in definitive registered form issued in
exchange for the Global Note shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Securities to the Depositary for delivery to the
Persons in whose names such Securities are so registered.
SECTION 2.5 Interest.
(a) Each Note will bear interest at the rate of ____% per
annum (the "Coupon Rate") from the original date of issuance 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 (subject to the provisions of Article IV) quarterly in arrears on [March
31, June 30, September 30 and December 31] of each year (each, an "Interest
Payment Date," commencing on _______, 199_), to the Person in whose name such
Note or any predecessor Note is registered, at the close of business on the
regular record date for such interest installment, which, in respect of any
Notes of which the Property Trustee is the Holder of a Global Note, shall be the
close of business on the Business Day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if the Preferred Securities are no
longer in Book-Entry only form, the relevant record dates shall be March 15,
June 15, September 15 and December 15 prior to the relevant Interest Payment
Date.
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(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. Except as
provided in the following sentence, 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 such a 30-day
period. In the event that any date on which interest is payable on the Notes is
not a Business Day, then payment of interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(c) If, at any time while the Property Trustee is the Holder
of any Notes, the Trust or the Property 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 domestic taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Notes held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.1 Tax Event Redemption.
If a Tax Event has occurred and is continuing prior to
_____________, 20__ the Company shall have the right upon not less than 30 days
nor more than 60 days notice to the Holders of the Notes to redeem the Notes, in
whole but not in part, for cash within 90 days following the occurrence of such
Tax Event (the "90 Day Period") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid
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interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company the opportunity
to eliminate, within the 90 Day Period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, the Trust or the Holders of the Trust Securities issued by the
Trust, the Company shall pursue such Ministerial Action in lieu of redemption.
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or 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 time, on the date such Redemption Price
is to be paid.
SECTION 3.2 Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to the
provisions of Article Fourteen of the Indenture, the Company shall have the
right to redeem the Notes, in whole or in part, at any time and from time to
time, on or after November __, 20__, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more than
60 days notice to the Holder of the Notes, at the Optional Redemption Price. If
the Notes are only partially redeemed pursuant to this Section 3.2, the Notes
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 Notes are registered as
a Global Note, the Depositary shall determine, in accordance with its
procedures, the principal amount of such Notes held by each Holder of Note to be
redeemed. The Optional Redemption Price shall be paid prior to 12:00 noon, New
York 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 Optional Redemption Price by 10:00 a.m., New York time, on
the date such Optional Redemption Price is to be paid.
(b) If a partial redemption of the Notes would result
in the delisting of the Preferred Securities issued by the Trust
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from any national securities exchange or other organization on which the
Preferred Securities are then listed, the Company shall not be permitted to
effect such partial redemption and may only redeem the Notes in whole.
SECTION 3.3 No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.
------------------------------------
The Company shall have the right, at any time and from time to
time during the term of the Notes, to defer payments of interest by extending
the interest payment period of such Notes for a period not exceeding 20
consecutive quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and payable; provided
that no Extended Interest Payment Period may extend beyond the Maturity Date. 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 Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Notes, including any Additional
Interest and Compounded Interest (together, "Deferred Interest") that shall be
payable to the Holders of the Notes in whose names the Notes are registered in
the Security Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period, provided that such period
together with all such further extensions thereof shall not exceed 20
consecutive quarters, or extend beyond the maturity date of the Notes. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable
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during an Extended Interest Payment Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.
SECTION 4.2 Notice of Extension.
(a) If the Property Trustee is the only registered Holder of
the Notes at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Property
Trustee and the Trustee of its selection of such Extended Interest Payment
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 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 Property Trustee is not the only Holder of the
Notes at the time the Company selects an Extended Interest Payment Period, the
Company shall give the Holders of the Notes and the Trustee written notice of
its selection of such Extended Interest Payment Period at least 10 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 or payment date of
such interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Notes.
(c) The quarter 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
quarters permitted in the maximum Extended Interest Payment 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, or (ii) there shall have occurred any
Event of Default, as defined in the Indenture, then (a) the Company shall not
declare or pay any
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dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) purchases or
acquisitions of shares of its common stock in connection with the satisfaction
by the Company of its obligations under any employee benefit plans, (ii) as a
result of a reclassification of its capital stock for another class or series of
its capital stock or (iii) the purchase of fractional interests in shares of its
capital stock pursuant to an acquisition or the conversion or exchange
provisions of such capital stock or security being converted or exchanged) or
make any guarantee payment with respect thereto and (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 which rank pari
passu with or junior to the Notes.
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses.
In connection with the offering, sale and issuance of the
Notes to the Property Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Notes, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Notes, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including commissions
to the underwriters in connection therewith), the fees and expenses of the
Property Trustee and the Delaware Trustee, 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),
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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);
(c) be primarily and fully 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.
Section 5.2 Payment Upon Resignation or Removal.
-----------------------------------
Upon termination of this First 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. Upon termination of the Declaration or the
removal or resignation of the Delaware Trustee or the Property Trustee, as the
case may be, pursuant to Section 5.6 of the Declaration, the Company shall pay
to the Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1 Listing on an Exchange.
If the Notes are to be issued as a Global Note in connection
with the distribution of the Notes to the holders of the Preferred Securities
issued by the Trust upon a Dissolution Election, the Company will use its best
efforts to list such Notes on the New York Stock Exchange, Inc. or on such other
exchange as the Preferred Securities are then listed.
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ARTICLE VII
FORM OF NOTE
SECTION 7.1 Form of Note.
The Notes and the Trustee's Certificate of Authentication to
be endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a
Global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a Depositary. This Note
is exchangeable for Notes registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Note (other than a transfer of this Note as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Note is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company 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.]
THIS NOTE IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF OR
GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK CORPORATION AND
IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
No. CUSIP No. ___________
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NATIONSBANK CORPORATION
____% JUNIOR SUBORDINATED DEFERRABLE INTEREST NOTE
DUE 2026
NATIONSBANK CORPORATION, a North Carolina corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________ or registered assigns, the principal sum of _____________ Dollars
($___________) on ______, 2026(the "Maturity Date"), and to pay interest on said
principal sum from ______, 1996, or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of each year
commencing _______, 199_, at the rate of ____% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum 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. In the event that any date on which interest is
payable on this Note is not a Business Day, then payment of interest 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. 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
Note (or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the regular record date for such interest
installment, which shall be the close of business on the business day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE NOTES ARE NO LONGER REPRESENTED BY A GLOBAL NOTE -- which shall be
the
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close of business on March 15, June 15, September 15 or December 15]. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such regular record date and
may be paid to the Person in whose name this Note (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 registered Holders of this series of Notes 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 Notes 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 premium, if any) and the interest on this Note shall be
payable at the office or agency of the Trustee maintained for that purpose 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 may be made at the option of the Company by check mailed to
the registered Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this Note is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Note will be made at such place and to such account as may be
designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Obligations (as defined in the Indenture)
and this Note is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
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 Obligations, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
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This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, 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.
The provisions of this Note 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 in its name by its duly authorized officers.
NATIONSBANK CORPORATION
By: ______________________
Name:_____________________
Title:____________________
Attest:
By: ______________________
Name: _____________________
Title: ____________________
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated ______________________
The Bank of New York,
as Trustee
By ______________________
Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of November __, 1996, duly executed and delivered
between the Company and The Bank of New York, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of November __, 1996,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Notes. By the terms of the Indenture, the Notes are issuable
in series that may vary as to amount, date of maturity, rate of interest and in
other respects as provided in the Indenture. This series of Notes is limited in
aggregate principal amount as specified in said First Supplemental Indenture.
Because of the occurrence and continuation of a Tax
Event, as defined in the Indenture, in certain circumstances,
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this Note may become due and payable at the principal amount together with any
interest accrued thereon (the "Redemption Price"). The Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines. The Company shall have the right to
redeem this Note at the option of the Company, without premium or penalty, in
whole or in part at any time on or after November __, 20__ (an "Optional
Redemption"), or at any time in certain circumstances upon the occurrence of a
Tax Event, at a redemption price equal to 100% of the principal amount plus any
accrued but unpaid interest, to the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this paragraph will be made upon
not less than 30 days nor more than 60 days notice, at the Optional Redemption
Price. If the Notes are only partially redeemed by the Company pursuant to an
Optional Redemption, the Notes 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 Notes are registered as a Global Note, the Depositary shall
determine the principal amount of such Notes held by each Noteholder to be
redeemed in accordance with its procedures.
In the event of redemption of this Note in part only, a new
Note or Notes of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the 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 Notes 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 not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, 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 Notes; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any
18
<PAGE>
Notes of any series, or reduce the principal amount thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the Holder of each Note so
affected, or (ii) reduce the aforesaid percentage of Notes, the Holders of which
are required to consent to any such supplemental indenture, without the consent
of the Holders of each Note then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Notes of any series at the time outstanding affected
thereby, on behalf of all of the Holders of the Notes 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. Any such consent or waiver by the registered Holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note and
of any Note 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 Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Note at the time and place and at the rate and in the
money herein prescribed.
The Company shall have the right at any time during the term
of the Notes and from time to time to defer payment of interest by extending the
interest payment period of such Notes for a period not exceeding 20 consecutive
quarters (an "Extended Interest Payment Period"), at the end of which period the
Company shall pay all interest then accrued and unpaid (together with interest
thereon at the rate specified for the Notes to the extent that payment of such
interest is enforceable under applicable law); provided that no Extended
Interest Payment Period may last beyond the Maturity Date of the Notes. Before
the termination of any such Extended Interest Payment Period, the Company may
further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with
19
<PAGE>
all such further extensions thereof shall not exceed 20 consecutive quarters or
extend the Maturity Date of the Notes. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid interest
and any additional amounts then due, the Company may commence a new Extended
Interest Payment Period, subject to the requirements contained in this
paragraph.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in the
City and State 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
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount and series 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.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any paying agent and the Security Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement
20
<PAGE>
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
This Global Note is exchangeable for Notes in definitive form
only under certain limited circumstances set forth in the Indenture. Notes of
this series so issued are issuable only in registered form without coupons in
denominations of $__ and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth, Notes
of this series so issued are exchangeable for a like aggregate principal amount
of Notes of this series of a different authorized denomination, as requested by
the Holder surrendering the same.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
21
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ARTICLE VIII
ORIGINAL ISSUE OF NOTES
SECTION 8.1 Original Issue of Notes.
Notes in the aggregate principal amount of $___________ may,
upon execution of this First Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Company,
signed by its Chief Executive Officer, Chief Financial Officer, its President,
or any Vice President or its Treasurer, without any further action by the
Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
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. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
SECTION 9.3 Governing Law.
This First Supplemental Indenture and each Note shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
22
<PAGE>
SECTION 9.4 Separability.
In case any one or more of the provisions contained in this
First Supplemental Indenture or in the Notes 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 First
Supplemental Indenture or of the Notes, but this First Supplemental Indenture
and the Notes shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 9.5 Counterparts.
This First 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.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their authorized respective
officers as of the day and year first above written.
NATIONSBANK CORPORATION
By:
Name:
Title:
THE BANK OF NEW YORK
as Trustee
By
Name:
Title:
24
<PAGE>
<PAGE>
EXHIBIT 4.14
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NB Capital Trust I
Dated as of November __, 1996
====================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation....................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................................................5
SECTION 2.2 Lists of Holders of Securities....................................................6
SECTION 2.3 Reports by the Preferred Guarantee Trustee........................................6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...........................................................................6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.........................................................................6
SECTION 2.6 Events of Default; Waiver.........................................................7
SECTION 2.7 Event of Default; Notice..........................................................7
SECTION 2.8 Conflicting Interests.............................................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee...........................................................................7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
................................................................................10
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee...................................................12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.........................................12
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee......................................................13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................................14
SECTION 5.2 Waiver of Notice and Demand......................................................14
SECTION 5.3 Obligations Not Affected.........................................................14
SECTION 5.4 Rights of Holders................................................................16
SECTION 5.5 Guarantee of Payment.............................................................17
SECTION 5.6 Subrogation......................................................................17
<PAGE>
Page
SECTION 5.7 Independent Obligations..........................................................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.......................................................18
SECTION 6.2 Ranking..........................................................................18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination......................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation......................................................................19
SECTION 8.2 Indemnification..................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns...........................................................20
SECTION 9.2 Amendments.......................................................................20
SECTION 9.3 Notices..........................................................................20
SECTION 9.4 Benefit..........................................................................21
SECTION 9.5 Governing Law....................................................................21
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of November __, 1996, is executed and delivered by
NATIONSBANK CORPORATION, a North Carolina 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) from
time to time of the Preferred Securities (as defined herein) of NB Capital Trust
I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of November __, 1996, 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 date hereof __________ preferred securities, having an
aggregate liquidation amount of $___________, designated the ____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as 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 of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein.
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 (as defined in the Indenture), 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 of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, 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.
<PAGE>
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) terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee
have the same meaning when used in this Preferred
Securities Guarantee;
(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 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.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or Charlotte, North Carolina
are authorized or obligated by law, executive order or regulation to close.
2
<PAGE>
"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, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"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 and unpaid
Distributions 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 "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 a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Notes to the
Holders in exchange for 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 of
Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder as registered on the books and
records of the applicable Clearing Agency.
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees,
3
<PAGE>
representatives, nominees, custodians or agents of the Preferred
Guarantee Trustee.
"Indenture" means the Indenture dated as of November __, 1996,
among the Guarantor (the "Note Issuer") and The Bank of New York, as trustee,
together with any Board Resolution or any indenture supplemental thereto,
pursuant to which certain subordinated debt securities of the Note Issuer are to
be issued to the Property Trustee (as defined in the Declaration) of the Issuer.
"Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation, dissolution or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Notes" means the series of junior subordinated debt
securities of the Guarantor designated the ____% Junior Subordinated Deferrable
Interest Notes due 2026 held by the Property 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 Preferred Securities Guarantee shall include:
(a) a statement that each 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 officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
4
<PAGE>
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.
"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, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor 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.
"Trust Securities" means the Common Securities and the
Preferred Securities.
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; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
5
<PAGE>
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 of the Preferred
Securities ("List of Holders") as of such date, (i) within 14 days after each
record date, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the 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
------------------------------------------
Within 60 days after March 31 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
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.
6
<PAGE>
SECTION 2.6 Events of Default; Waiver
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 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.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, 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 of the
Preferred Guarantee Trustee 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 knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
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 for the benefit of the Holders
of the Preferred Securities, and the Preferred Guarantee Trustee
7
<PAGE>
shall not transfer this Preferred Securities Guarantee to any Person except a
Holder of Preferred Securities exercising his or her rights pursuant to Section
5.4(b) 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 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 of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of
the Holders of the Preferred Securities.
(c) 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.
(d) 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
8
<PAGE>
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 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 of
the Preferred Guarantee Trustee, 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.
9
<PAGE>
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 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.
(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
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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 be taken to relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee.
(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 by 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 of the Preferred
Securities, 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 Securities
Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's 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 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
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conclusively relying on or acting in accordance with such
instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Preferred Securities
Guarantee.
(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 Property Trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports
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of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the 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 except during an event of default.
(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.
(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 in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect 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 an instrument of
removal or resignation, the Preferred Guarantee Trustee resigning
or being removed may petition any court of competent jurisdiction
for appointment of a Successor Preferred Guarantee Trustee. Such
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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.
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;
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(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 Notes or any extension of the maturity date of the Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the 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
Preferred Securities;
(f) any failure or omission to receive any regulatory approval
or consent required in connection with the Common or Preferred Securities,
including the failure to receive any approval of the Board of Governors of the
Federal Reserve System required for the redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(h) 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.
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SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of 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.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. 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.
(c) No holder of any Security shall have any right by virtue
or by availing of any provision of a Guarantee to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Guarantee
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities specifying such Event of Default; (ii) the holders of
not less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 60 day period, the holders of a
majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Guarantee, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security,
as therein provided, on or after the respective due dates expressed in such
Security (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be
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impaired or affected without the consent of such holder and by accepting a
Security hereunder it is expressly understood, intended and covenanted by the
taker and holder of every Security of such series with every other such taker
and holder and the Trustee, that no one or more holders of Securities of such
series shall have any right in any manner whatsoever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the rights of
the holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities of series. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities 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 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.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default, an event of default under the
Declaration or during an Extended Interest Payment Period (as defined in the
Indenture), then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or the 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, (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to an acquisition or the conversion or exchange provisions of such
capital stock of the Guarantor or the security being converted or exchanged) or
make any guarantee payments with respect to the foregoing or (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor which rank pari passu with or junior to the Notes.
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, including contingent liabilities,
of the Guarantor, (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 securities
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 upon (i)
full payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Notes to the Holders of all of the Preferred Securities or
(iii) upon full
18
<PAGE>
payment of the amounts payable in accordance with the Declaration upon
liquidation or 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 of Preferred
Securities 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 of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim 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.
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The obligation to indemnify as set forth in this Section 8.2 shall survive 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.
SECTION 9.2 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 Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in 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 the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities 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 of
the Preferred Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212)815-5915
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
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Guarantor may give notice of to the Holders of the Preferred Securities):
NationsBank Corporation
NationsBank Corporation Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
Telecopy: (704) 386-0270
(c) If given to any Holder of Preferred Securities, 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 of the Preferred Securities 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 AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
21
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NATIONSBANK CORPORATION, as
Guarantor
By:
Name:
Title:
THE BANK OF NEW YORK, as Preferred
Guarantee Trustee
By:
Name:
Title:
22
</TABLE>
<PAGE>
EXHIBIT 4.15
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NB Capital Trust II
Dated as of _________, 199_
====================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation....................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................................................5
SECTION 2.2 Lists of Holders of Securities....................................................6
SECTION 2.3 Reports by the Preferred Guarantee Trustee........................................6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...........................................................................6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.........................................................................6
SECTION 2.6 Events of Default; Waiver.........................................................7
SECTION 2.7 Event of Default; Notice..........................................................7
SECTION 2.8 Conflicting Interests.............................................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee...........................................................................7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
................................................................................10
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee...................................................12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.........................................12
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee......................................................13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................................14
SECTION 5.2 Waiver of Notice and Demand......................................................14
SECTION 5.3 Obligations Not Affected.........................................................14
SECTION 5.4 Rights of Holders................................................................16
SECTION 5.5 Guarantee of Payment.............................................................17
SECTION 5.6 Subrogation......................................................................17
<PAGE>
Page
SECTION 5.7 Independent Obligations..........................................................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.......................................................18
SECTION 6.2 Ranking..........................................................................18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination......................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation......................................................................19
SECTION 8.2 Indemnification..................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns...........................................................20
SECTION 9.2 Amendments.......................................................................20
SECTION 9.3 Notices..........................................................................20
SECTION 9.4 Benefit..........................................................................21
SECTION 9.5 Governing Law....................................................................21
</TABLE>
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of _________, 199_, is executed and delivered by
NATIONSBANK CORPORATION, a North Carolina 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) from
time to time of the Preferred Securities (as defined herein) of NB Capital Trust
II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of _________, 199_, 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 date hereof __________ preferred securities, having an
aggregate liquidation amount of $___________, designated the ____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as 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 of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein.
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 (as defined in the Indenture), 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 of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, 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.
<PAGE>
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) terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee
have the same meaning when used in this Preferred
Securities Guarantee;
(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 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.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or Charlotte, North Carolina
are authorized or obligated by law, executive order or regulation to close.
2
<PAGE>
"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, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"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 and unpaid
Distributions 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 "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 a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Notes to the
Holders in exchange for 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 of
Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder as registered on the books and
records of the applicable Clearing Agency.
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees,
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representatives, nominees, custodians or agents of the Preferred
Guarantee Trustee.
"Indenture" means the Indenture dated as of November __, 1996,
among the Guarantor (the "Note Issuer") and The Bank of New York, as trustee,
together with any Board Resolution or any indenture supplemental thereto,
pursuant to which certain subordinated debt securities of the Note Issuer are to
be issued to the Property Trustee (as defined in the Declaration) of the Issuer.
"Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation, dissolution or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Notes" means the series of junior subordinated debt
securities of the Guarantor designated the ____% Junior Subordinated Deferrable
Interest Notes due 20__ held by the Property 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 Preferred Securities Guarantee shall include:
(a) a statement that each 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 officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
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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.
"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, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor 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.
"Trust Securities" means the Common Securities and the
Preferred Securities.
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; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
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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 of the Preferred
Securities ("List of Holders") as of such date, (i) within 14 days after each
record date, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the 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
------------------------------------------
Within 60 days after March 31 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
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
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 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.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, 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 of the
Preferred Guarantee Trustee 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 knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
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 for the benefit of the Holders
of the Preferred Securities, and the Preferred Guarantee Trustee
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shall not transfer this Preferred Securities Guarantee to any Person except a
Holder of Preferred Securities exercising his or her rights pursuant to Section
5.4(b) 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 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 of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of
the Holders of the Preferred Securities.
(c) 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.
(d) 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
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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 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 of
the Preferred Guarantee Trustee, 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.
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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 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.
(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
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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 be taken to relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee.
(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 by 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 of the Preferred
Securities, 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 Securities
Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's 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 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
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conclusively relying on or acting in accordance with such
instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Preferred Securities
Guarantee.
(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 Property Trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports
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of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the 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 except during an event of default.
(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.
(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 in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect 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 an instrument of
removal or resignation, the Preferred Guarantee Trustee resigning
or being removed may petition any court of competent jurisdiction
for appointment of a Successor Preferred Guarantee Trustee. Such
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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.
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;
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(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 Notes or any extension of the maturity date of the Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the 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
Preferred Securities;
(f) any failure or omission to receive any regulatory approval
or consent required in connection with the Common or Preferred Securities,
including the failure to receive any approval of the Board of Governors of the
Federal Reserve System required for the redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(h) 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.
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SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of 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.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. 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.
(c) No holder of any Security shall have any right by virtue
or by availing of any provision of a Guarantee to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Guarantee
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities specifying such Event of Default; (ii) the holders of
not less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 60 day period, the holders of a
majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Guarantee, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security,
as therein provided, on or after the respective due dates expressed in such
Security (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be
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impaired or affected without the consent of such holder and by accepting a
Security hereunder it is expressly understood, intended and covenanted by the
taker and holder of every Security of such series with every other such taker
and holder and the Trustee, that no one or more holders of Securities of such
series shall have any right in any manner whatsoever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the rights of
the holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities of series. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities 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 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.
17
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default, an event of default under the
Declaration or during an Extended Interest Payment Period (as defined in the
Indenture), then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or the 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, (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to an acquisition or the conversion or exchange provisions of such
capital stock of the Guarantor or the security being converted or exchanged) or
make any guarantee payments with respect to the foregoing or (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor which rank pari passu with or junior to the Notes.
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, including contingent liabilities,
of the Guarantor, (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 securities
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 upon (i)
full payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Notes to the Holders of all of the Preferred Securities or
(iii) upon full
18
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payment of the amounts payable in accordance with the Declaration upon
liquidation or 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 of Preferred
Securities 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 of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim 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.
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The obligation to indemnify as set forth in this Section 8.2 shall survive 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.
SECTION 9.2 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 Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in 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 the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities 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 of
the Preferred Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212)815-5915
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
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Guarantor may give notice of to the Holders of the Preferred Securities):
NationsBank Corporation
NationsBank Corporation Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
Telecopy: (704) 386-0270
(c) If given to any Holder of Preferred Securities, 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 of the Preferred Securities 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 AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NATIONSBANK CORPORATION, as
Guarantor
By:
Name:
Title:
THE BANK OF NEW YORK, as Preferred
Guarantee Trustee
By:
Name:
Title:
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<PAGE>
EXHIBIT 4.16
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NB Capital Trust III
Dated as of _________, 199_
====================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation....................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................................................5
SECTION 2.2 Lists of Holders of Securities....................................................6
SECTION 2.3 Reports by the Preferred Guarantee Trustee........................................6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...........................................................................6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.........................................................................6
SECTION 2.6 Events of Default; Waiver.........................................................7
SECTION 2.7 Event of Default; Notice..........................................................7
SECTION 2.8 Conflicting Interests.............................................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee...........................................................................7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
................................................................................10
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee...................................................12
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.........................................12
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee......................................................13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................................14
SECTION 5.2 Waiver of Notice and Demand......................................................14
SECTION 5.3 Obligations Not Affected.........................................................14
SECTION 5.4 Rights of Holders................................................................16
SECTION 5.5 Guarantee of Payment.............................................................17
SECTION 5.6 Subrogation......................................................................17
<PAGE>
Page
SECTION 5.7 Independent Obligations..........................................................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.......................................................18
SECTION 6.2 Ranking..........................................................................18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination......................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation......................................................................19
SECTION 8.2 Indemnification..................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns...........................................................20
SECTION 9.2 Amendments.......................................................................20
SECTION 9.3 Notices..........................................................................20
SECTION 9.4 Benefit..........................................................................21
SECTION 9.5 Governing Law....................................................................21
</TABLE>
ii
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of _________, 199_, is executed and delivered by
NATIONSBANK CORPORATION, a North Carolina 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) from
time to time of the Preferred Securities (as defined herein) of NB Capital Trust
III, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of _________, 199_, 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 date hereof __________ preferred securities, having an
aggregate liquidation amount of $___________, designated the ____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as 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 of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set forth
herein.
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 (as defined in the Indenture), 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 of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, 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.
<PAGE>
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) terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee
have the same meaning when used in this Preferred
Securities Guarantee;
(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 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.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or Charlotte, North Carolina
are authorized or obligated by law, executive order or regulation to close.
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<PAGE>
"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, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"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 and unpaid
Distributions 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 "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 a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Notes to the
Holders in exchange for 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 of
Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder as registered on the books and
records of the applicable Clearing Agency.
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees,
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representatives, nominees, custodians or agents of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of November __, 1996,
among the Guarantor (the "Note Issuer") and The Bank of New York, as trustee,
together with any Board Resolution or any indenture supplemental thereto,
pursuant to which certain subordinated debt securities of the Note Issuer are to
be issued to the Property Trustee (as defined in the Declaration) of the Issuer.
"Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation, dissolution or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
"Notes" means the series of junior subordinated debt
securities of the Guarantor designated the ____% Junior Subordinated Deferrable
Interest Notes due 20__ held by the Property 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 Preferred Securities Guarantee shall include:
(a) a statement that each 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 officer in
rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Person" means a legal person, including any
individual, corporation, estate, partnership, joint venture,
4
<PAGE>
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.
"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, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor 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.
"Trust Securities" means the Common Securities and the
Preferred Securities.
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; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
5
<PAGE>
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 of the Preferred
Securities ("List of Holders") as of such date, (i) within 14 days after each
record date, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the 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
------------------------------------------
Within 60 days after March 31 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
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.
6
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SECTION 2.6 Events of Default; Waiver
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 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.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, 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 of the
Preferred Guarantee Trustee 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 knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
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 for the benefit of the Holders
of the Preferred Securities, and the Preferred Guarantee Trustee
7
<PAGE>
shall not transfer this Preferred Securities Guarantee to any Person except a
Holder of Preferred Securities exercising his or her rights pursuant to Section
5.4(b) 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 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 of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of
the Holders of the Preferred Securities.
(c) 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.
(d) 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
8
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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 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 of
the Preferred Guarantee Trustee, 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.
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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 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.
(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
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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 be taken to relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee.
(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 by 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 of the Preferred
Securities, 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 Securities
Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's 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 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
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conclusively relying on or acting in accordance with such
instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Preferred Securities
Guarantee.
(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 Property Trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports
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<PAGE>
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the 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 except during an event of default.
(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.
(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 in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect 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 an instrument of
removal or resignation, the Preferred Guarantee Trustee resigning
or being removed may petition any court of competent jurisdiction
for appointment of a Successor Preferred Guarantee Trustee. Such
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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.
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;
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(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 Notes or any extension of the maturity date of the Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the 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
Preferred Securities;
(f) any failure or omission to receive any regulatory approval
or consent required in connection with the Common or Preferred Securities,
including the failure to receive any approval of the Board of Governors of the
Federal Reserve System required for the redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(h) 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.
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<PAGE>
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of 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.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. 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.
(c) No holder of any Security shall have any right by virtue
or by availing of any provision of a Guarantee to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Guarantee
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities specifying such Event of Default; (ii) the holders of
not less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 60 day period, the holders of a
majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Guarantee, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security,
as therein provided, on or after the respective due dates expressed in such
Security (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be
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<PAGE>
impaired or affected without the consent of such holder and by accepting a
Security hereunder it is expressly understood, intended and covenanted by the
taker and holder of every Security of such series with every other such taker
and holder and the Trustee, that no one or more holders of Securities of such
series shall have any right in any manner whatsoever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the rights of
the holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities of series. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities 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 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.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default, an event of default under the
Declaration or during an Extended Interest Payment Period (as defined in the
Indenture), then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or the 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, (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to an acquisition or the conversion or exchange provisions of such
capital stock of the Guarantor or the security being converted or exchanged) or
make any guarantee payments with respect to the foregoing or (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor which rank pari passu with or junior to the Notes.
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, including contingent liabilities,
of the Guarantor, (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 securities
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 upon (i)
full payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Notes to the Holders of all of the Preferred Securities or
(iii) upon full
18
<PAGE>
payment of the amounts payable in accordance with the Declaration upon
liquidation or 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 of Preferred
Securities 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 of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim 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.
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The obligation to indemnify as set forth in this Section 8.2 shall survive 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.
SECTION 9.2 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 Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in 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 the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities 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 of
the Preferred Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212)815-5915
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
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<PAGE>
Guarantor may give notice of to the Holders of the Preferred Securities):
NationsBank Corporation
NationsBank Corporation Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
Telecopy: (704) 386-0270
(c) If given to any Holder of Preferred Securities, 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 of the Preferred Securities 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 AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NATIONSBANK CORPORATION, as
Guarantor
By:
Name:
Title:
THE BANK OF NEW YORK, as Preferred
Guarantee Trustee
By:
Name:
Title:
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<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in the Registration Statement
(Form S-3) and related prospectus of NationsBank Corporation for the
registration of $1,000,000,000 of junior subordinated debt and preferred
securities of our report dated January 18, 1996 (except for the pooling of
interests with Fourth Financial Corporation as of January 31, 1996, and Note 3,
for which the date is January 31, 1996) with respect to the supplemental
consolidated financial statements of Boatmen's Bancshares, Inc. for the three
years ended December 31, 1995, 1994, and 1993 incorporated by reference in
NationsBank Corporation's Current Report on Form 8-K dated September 6, 1996,
(as amended by Form 8-K/A-1 on September 11, 1996) as filed with the Securities
and Exchange Commission.
St. Louis, Missouri
November 12, 1996
<PAGE>
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of NationsBank Corporation, and
the several undersigned Officers and Directors thereof whose signatures appear
below, hereby makes, constitutes and appoints Paul J. Polking and Charles M.
Berger, and each of them acting individually, its, his and her true and lawful
attorneys, with power to act without any other and with full power of
substitution, to execute, deliver and file in its, his and her name and on its,
his and her behalf, and in each of the undersigned Officer's and Director's
capacity or capacities as shown below, (a) a Registration Statement on Form S-3
(or other appropriate form) with respect to the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of up to
$1,000,000,000 in aggregate initial offering price of (i) NationsBank
Corporation's Subordinated Debt Securities, (the "Subordinated Debt
Securities"), (ii) Preferred Securities of NationsBanc Capital Trust I,
NationsBanc Capital Trust II and NationsBanc Capital Trust III (the "Preferred
Securities") and (iii) NationsBank Corporation's Guarantees (the "Guarantees")
of the Preferred Securities (the Subordinated Debt Securities, the Preferred
Securities and the Guarantees hereinafter collectively referred to as the
"Securities"), which Securities may be offered separately or together, in
separate series and in amounts, at prices and on terms to be determined at the
time of sale, all as authorized by the Board of Directors of NationsBank
Corporation as of October 23, 1996, and all documents in support thereof or
supplemental thereto and any and all amendments, including any and all
pre-effective and post-effective amendments, to the foregoing (hereinafter
collectively called the "Registration Statement"); and (b) such registration
statements, petitions, applications, consents to service of process or other
instruments, any and all documents in support thereof or supplemental thereto,
and any and all amendments or supplements to the foregoing, as may be necessary
or advisable to qualify or register the securities covered by said Registration
Statement under such securities laws, regulations and requirements as may be
applicable; and each of NationsBank Corporation and said Officers and Directors
hereby grants to said attorneys, and to each of them, full power and authority
to do and perform each and every act and thing whatsoever as said attorneys or
attorney may deem necessary or advisable to carry out fully the intent of this
power of attorney to the same extent and with the same effect as NationsBank
Corporation might or could do, and as each of said Officers and Directors might
or could do personally in his or her capacity or capacities as aforesaid, and
each of NationsBank Corporation and said Officers and Directors hereby ratifies
and confirms all acts and things which said attorneys or attorney might do or
cause to be done by virtue of this power of attorney and its, his or her
signature as the same may be signed by said attorneys or attorney, or any of
them, to any or all of the following (and/or any and all amendments and
supplements to any or all thereof): such Registration Statement under the
Securities Act of 1933, as amended, and all such registration statements,
petitions, applications, consents to service of process and other instruments,
and any and all documents in support thereof or supplemental thereto, under such
securities laws, regulations and requirements as may be applicable.
IN WITNESS WHEREOF, NationsBank Corporation has caused this power of
attorney to be signed on its behalf, and each of the undersigned Officers and
Directors in the capacity or capacities noted has hereunto set his or her hand
as of the date indicated below.
NATIONSBANK CORPORATION
(Registrant)
By: /s/ HUGH L. MCCOLL, JR.
HUGH L. MCCOLL, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Dated: October 29, 1996
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>
/s/ HUGH L. MCCOLL, JR. Chairman of the Board, Chief Executive Officer October 29, 1996
and Director (Principal Executive Officer)
(HUGH L. MCCOLL, JR.)
/s/ JAMES H. HANCE, JR. Vice Chairman and Chief Financial Officer October 29, 1996
(Principal Financial Officer)
(JAMES H. HANCE, JR.)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>
/s/ MARC D. OKEN Executive Vice President and Chief October 29, 1996
Accounting Officer (Principal
(MARC D. OKEN) Accounting Officer)
/s/ RONALD W. ALLEN Director October 29, 1996
(RONALD W. ALLEN)
/s/ RAY C. ANDERSON Director October 29, 1996
(RAY C. ANDERSON)
/s/ WILLIAM M. BARNHARDT Director October 29, 1996
(WILLIAM M. BARNHARDT)
/s/ THOMAS E. CAPPS Director October 29, 1996
(THOMAS E. CAPPS)
/s/ CHARLES W. COKER Director October 29, 1996
(CHARLES W. COKER)
/s/ THOMAS G. COUSINS Director October 29, 1996
(THOMAS G. COUSINS)
/s/ ALAN T. DICKSON Director October 29, 1996
(ALAN T. DICKSON)
/s/ W. FRANK DOWD, JR. Director October 29, 1996
(W. FRANK DOWD, JR.)
/s/ PAUL FULTON Director October 29, 1996
(PAUL FULTON)
/s/ TIMOTHY L. GUZZLE Director October 29, 1996
(TIMOTHY L. GUZZLE)
/s/ W. W. JOHNSON Director October 29, 1996
(W. W. JOHNSON)
/s/ JOHN J. MURPHY Director October 29, 1996
(JOHN J. MURPHY)
/s/ JOHN C. SLANE Director October 29, 1996
(JOHN C. SLANE)
/s/ O. TEMPLE SLOAN, JR. Director October 29, 1996
(O. TEMPLE SLOAN, JR.)
/s/ JOHN W. SNOW Director October 29, 1996
(JOHN W. SNOW)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>
/s/ MEREDITH R. SPANGLER Director October 29, 1996
(MEREDITH R. SPANGLER)
/s/ ROBERT H. SPILMAN Director October 29, 1996
(ROBERT H. SPILMAN)
/s/ RONALD TOWNSEND Director October 29, 1996
(RONALD TOWNSEND)
/s/ E. CRAIG WALL, JR. Director October 29, 1996
(E. CRAIG WALL, JR.)
/s/ JACKIE M. WARD Director October 29, 1996
(JACKIE M. WARD)
/s/ VIRGIL R. WILLIAMS Director October 29, 1996
(VIRGIL R. WILLIAMS)
</TABLE>
<PAGE>
