<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER , 1996
REGISTRATION NO. 333-15375
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 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.
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>
A Redherring appears rotated on left side of page and reads as follows:
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 25, 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER , 1996)
20,000,000 PREFERRED SECURITIES
NB CAPITAL TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES(SM)("TOPRS(SM)")
(LIQUIDATION AMOUNT $25 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"
(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.
The Preferred Securities have been approved for listing on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"), subject to notice of
issuance. 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."
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 December , 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 December
, 1996.
MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
The date of this Prospectus Supplement is November , 1996.
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
or the "Corporation"), will own all the common securities (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 $25
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 $17.6 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
(CONTINUED ON NEXT PAGE)
S-2
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
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 throughout the term of the Junior Subordinated Notes. See "Risk
Factors -- Option to Extend Interest Payment Period"; "Description of the Junior
Subordinated Notes -- 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 , 2001, or, in whole but
not in part, prior to , 2001, 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 $25 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 $25 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.
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.
S-3
<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>
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>
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 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 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>
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 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 such holder'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 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
S-7
<PAGE>
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if NationsBank fails
to pay interest or principal on the Junior Subordinated Notes (a "Note Payment
Failure") on the date such interest or principal is otherwise payable (or in the
case of redemption, on the redemption date), and such Note Payment Failure is
continuing, a holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such holder of the principal of or interest on the
Junior Subordinated Notes having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder (a "Direct
Action") after the respective due date specified in the Junior Subordinated
Notes. In connection with such Direct Action, NationsBank will be subrogated to
the rights of such holder of Preferred Securities under the Declaration to the
extent of any payment made by NationsBank to such holder of Preferred Securities
in such Direct Action. 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 and Note Payment Failures."
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 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
S-8
<PAGE>
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, 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.
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<PAGE>
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."
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>
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>
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<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 Trust Preferred Securities (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>
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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<PAGE>
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 except in the limited
circumstances in which the holder may take Direct Action. See " -- Declaration
Events of Default and Note Payment Failures" and " -- Voting Rights."
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 December , 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 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 of the Junior Subordinated Notes -- Interest" and
" -- Option to Extend Interest Payment Period." If distributions are deferred,
the deferred distributions and
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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 , 2001 or, in whole but not in part, prior to ,
2001 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
redemption prior to the Stated Maturity may require prior approval of the
Federal Reserve Board.
TAX EVENT REDEMPTION
If, at any time prior to , 2001, 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 $25 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 November 1,
2051, 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 AND NOTE PAYMENT FAILURES
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.
Notwithstanding the foregoing, if a Note Payment Failure (which involves a
failure to make a timely interest, principal or redemption payment but does not
constitute a Declaration Event of Default) has occurred and
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is continuing, a holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder directly of the principal
of or interest on the Junior Subordinated Notes having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
after the respective due date specified in the Junior Subordinated Notes. In
connection with such Direct Action, NationsBank will be subrogated to the rights
of such holder of Preferred Securities under the Declaration to the extent of
any payment made by NationsBank to such holder of Preferred Securities in such
Direct Action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Junior Subordinated
Notes.
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. Notwithstanding the foregoing,
if a Note Payment Failure has occurred and is continuing, a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the Junior Subordinated Notes
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder after the respective due date specified in
the Junior Subordinated Notes. The Property Trustee shall notify all holders of
the Preferred Securities of any notice of an Event of Default or Note Payment
Failure received from the Debt Trustee with respect to the Junior Subordinated
Notes. Such notice, in the case of an Event of Default, 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
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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 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").
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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 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
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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.
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.
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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.
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.
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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
Declaration, 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
December , 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 December , 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 $ (or $ if the option described
under the heading "Underwriting" is exercised by the Underwriters), 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 December , 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.
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Payments on Junior Subordinated Notes issued as a Global Security will be made
to DTC, a successor depositary or, in 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 amounts 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
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persons secured by any lien on any property or asset of NationsBank (whether or
not such obligation is 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 , 2001, but
prior to the Stated Maturity, or, in whole but not in part, prior to
, 2001, 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 December , 1996, 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,
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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 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 AND NOTE PAYMENT FAILURES
"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 respect to the Junior
Subordinated Notes or defaults of the Corporation under the Preferred Securities
Guarantee. 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. 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 Note Payment Failures" and " -- Voting Rights."
Notwithstanding the foregoing, if a Note Payment Failure has occurred and is
continuing, a holder of Preferred Securities may institute a Direct Action for
payment after the respective due date specified in the Junior Subordinated
Notes. Notwithstanding any payments made to such holder of Preferred Securities
by NationsBank in connection with a Direct Action, NationsBank shall remain
obligated to pay the principal of or interest on the Junior Subordinated Notes
held by the Trust or the Property Trustee of the Trust, and NationsBank shall be
subrogated to the rights of the holder of such Preferred Securities with respect
to payments on the Preferred Securities to the extent of any payments made by
NationsBank to such holder in any Direct Action. 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
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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
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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<PAGE>
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.
Notwithstanding the foregoing, if a Note Payment Failure has occurred and is
continuing, a holder of Preferred Securities may then institute a Direct Action
for payment after the respective due date specified in the Junior Subordinated
Notes. In connection with such Direct Action, NationsBank will be subrogated to
the rights of such holder of Preferred Securities under the Declaration to the
extent of any payment made by NationsBank to such holder of Preferred Securities
in such Direct Action. 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
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<PAGE>
Securities. See "Description of the Preferred Securities Guarantees -- General"
in the accompanying Prospectus.
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
S-31
<PAGE>
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, 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
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<PAGE>
accrued but unpaid interest) a holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, 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 IRS.
S-33
<PAGE>
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 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, Dean Witter Reynolds Inc., A.G.
Edwards & Sons, Inc., PaineWebber Incorporated, Prudential Securities
Incorporated and Smith Barney Inc. 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
UNDERWRITER PREFERRED SECURITIES
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................................
Dean Witter Reynolds Inc......................................................
A.G. Edwards & Sons, Inc......................................................
PaineWebber Incorporated......................................................
Prudential Securities Incorporated............................................
Smith Barney Inc..............................................................
Total........................................................... 20,000,000
</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 other dealers. After the initial public
offering, the public offering price, concession 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
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<PAGE>
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
plus accrued distributions from December , 1996. 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, subject to certain exceptions,
without the prior written consent of the Underwriters, directly or indirectly,
sell, offer to sell, grant any option for sale of, or otherwise dispose of, any
Preferred Securities, any security convertible into or exchangeable into or
exercisable for Preferred Securities or Junior Subordinated 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).
The Preferred Securities have been approved for listing on the New York
Stock Exchange, subject to notice of issuance. 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.
S-35
<PAGE>
A Redherring appears rotated on left side of page and reads as follows:
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 25, 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
<PAGE>
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 November , 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, 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 through the following Banks:
NationsBank, N.A. (serving the states of North Carolina, South Carolina,
Maryland and Virginia
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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.
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.
Bank holding companies are also required 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
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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 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
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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, telephone (704) 386-5972.
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 and the Corporation shall have given notice of 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, and (b) 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.
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, 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 were issued with original
issue discount, 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
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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 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.
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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.
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
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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 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.
Notwithstanding the foregoing, if NationsBank fails to pay interest or
principal on the applicable series of Junior Subordinated Notes (a "Note Payment
Failure") on the date such interest or principal is otherwise payable (or in the
case of redemption, on the redemption date) and such Note Payment Failure is
continuing, a holder of Preferred Securities of such NB Capital Trust may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the applicable series of Junior Subordinated Notes
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder (a "Direct Action") after the respective due
date specified in the applicable series of Junior Subordinated Notes. In
connection with such Direct Action, the Corporation will be subrogated to the
rights of such holder of Preferred Securities under the applicable Declaration
to the extent of any payment made by the Corporation to such holder of Preferred
Securities in such Direct Action.
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
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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 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
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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.
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. If the Preferred Guarantee
Trustee fails to enforce such Preferred Securities Guarantee, 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.
18
<PAGE>
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.
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.
19
<PAGE>
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.
Notwithstanding the foregoing, if a Note Payment Failure has occurred and is
continuing, a holder of Preferred Securities may institute a Direct Action for
payment after the respective due date specified in the Junior Subordinated
Notes. In connection with such Direct Action, NationsBank will be subrogated to
the rights of such holder of Preferred Securities under the Declarations to the
extent of any payment made by NationsBank to such holder of Preferred Securities
in such Direct Action. 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.
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 MATTERS
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>
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 OR 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-24
Description of the Junior Subordinated Notes.......... S-24
Effect of Obligations Under the Junior Subordinated
Notes and the Preferred Securities Guarantee........ S-30
United States Federal Income Taxation................. S-31
Underwriting.......................................... S-34
Legal Matters......................................... S-35
<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>
20,000,000 PREFERRED SECURITIES
NB CAPITAL TRUST I
% TRUST ORIGINATED
PREFERRED SECURITIES(SM)
("TOPRS(SM)")
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY
NATIONSBANK(Register mark)
PROSPECTUS SUPPLEMENT
MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC.
A. G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
NOVEMBER , 1996
<PAGE>
[ALTERNATE COVER]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 25, 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 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
<PAGE>
[ALTERNATE PAGE]
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.
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.
THIS PROSPECTUS AND RELATED PROSPECTUS SUPPLEMENTS ARE TO BE USED BY
NATIONSBANC CAPITAL MARKETS, INC., A BROKER-DEALER AND A DIRECT WHOLLY-
OWNED SUBSIDIARY OF NATIONSBANK, IN CONNECTION WITH OFFERS AND SALES
RELATED TO SECONDARY MARKET TRANSACTIONS IN THE OFFERED SECURITIES.
NATIONSBANK CAPITAL MARKETS, INC. OR ITS AFFILIATES MAY ACT AS
PRINCIPAL OR AGENT IN SUCH TRANSACTIONS. ANY SUCH SALES WILL BE
MADE AT NEGOTIATED PRICES RELATING TO PREVAILING
MARKET PRICES AT THE TIME OF SALE OR OTHERWISE.
NATIONSBANC CAPITAL MARKETS, INC.
The date of this Prospectus is November , 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. 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 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.
Alt-2
<PAGE>
[ALTERNATE PAGE]
PLAN OF DISTRIBUTION
This Prospectus and related Prospectus Supplements are to be used by
NationsBanc Capital Markets, Inc. ("NCMI"), a broker-dealer and a direct
wholly-owned subsidiary of NationsBank, in connection with offers and sales of
the Offered Securities in secondary market transactions at negotiated prices
relating to prevailing prices at the time of sale or otherwise. NCMI may act as
principal or agent in such transactions. The participation of NCMI in the offer
and sale of the Offered Securities complies with the requirements of Section
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD") regarding underwriting of securities of an affiliate. NCMI
will not execute a transaction in the Offered Securities in a discretionary
account without the prior written specific approval of NCMI's customer. NCMI has
no obligation to make a market in the Offered Securities and may discontinue its
market-making activities at any time without notice, at its sole discretion.
Furthermore, NCMI may be required to discontinue its market-making activities
during periods when the Corporation is involved in a distribution of certain of
its securities or when NCMI, by virtue of its affiliation with the Corporation,
is aware of material non-public information relating to the Corporation. In such
instance, NCMI would not be able to recommence its market-making activities
until such distribution has been completed or such information has become
publicly available. It is not possible to determine the impact, if any, that any
such discontinuance may have on the market for the Offered Securities. While
other broker-dealers may make a market in the Offered Securities from time to
time, there can be no assurance that any other broker-dealer will do so at any
time when NCMI discontinues its market-making activities.
Alt-10
<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>
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 Richards, Layton & Finger
</TABLE>
II-2
<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 Richards, Layton & Finger (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 and/or
the filing of Amendment No. 1 to this Registration Statement
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>
(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>
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. 2 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
25, 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>
HUGH L. MCCOLL, JR.* Chairman of the Board, Chief Executive November 25, 1996
Officer and Director (Principal
(HUGH L. MCCOLL, JR.) Executive Officer)
JAMES H. HANCE, JR.* Vice Chairman and Chief Financial November 25, 1996
Officer (Principal Financial Officer)
(JAMES H. HANCE, JR.)
MARC D. OKEN* Executive Vice President November 25, 1996
and Chief Accounting Officer
(MARC D. OKEN) (Principal Accounting
Officer)
RONALD W. ALLEN* Director November 25, 1996
(RONALD W. ALLEN)
RAY C. ANDERSON* Director November 25, 1996
(RAY C. ANDERSON)
WILLIAM M. BARNHARDT* Director November 25, 1996
(WILLIAM M. BARNHARDT)
THOMAS E. CAPPS* Director November 25, 1996
(THOMAS E. CAPPS)
CHARLES W. COKER* Director November 25, 1996
(CHARLES W. COKER)
THOMAS G. COUSINS* Director November 25, 1996
(THOMAS G. COUSINS)
ALAN T. DICKSON* Director November 25, 1996
(ALAN T. DICKSON)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
W. FRANK DOWD, JR.* Director November 25, 1996
(W. FRANK DOWD, JR.)
PAUL FULTON* Director November 25, 1996
(PAUL FULTON)
TIMOTHY L. GUZZLE* Director November 25, 1996
(TIMOTHY L. GUZZLE)
W. W. JOHNSON* Director November 25, 1996
(W. W. JOHNSON)
JOHN J. MURPHY* Director November 25, 1996
(JOHN J. MURPHY)
JOHN C. SLANE* Director November 25, 1996
(JOHN C. SLANE)
O. TEMPLE SLOAN, JR.* Director November 25, 1996
(O. TEMPLE SLOAN, JR.)
JOHN W. SNOW* Director November 25, 1996
(JOHN W. SNOW)
MEREDITH R. SPANGLER* Director November 25, 1996
(MEREDITH R. SPANGLER)
ROBERT H. SPILMAN* Director November 25, 1996
(ROBERT H. SPILMAN)
RONALD TOWNSEND* Director November 25, 1996
(RONALD TOWNSEND)
E. CRAIG WALL, JR.* Director November 25, 1996
(E. CRAIG WALL, JR.)
JACKIE M. WARD* Director November 25, 1996
(JACKIE M. WARD)
VIRGIL R. WILLIAMS* Director November 25, 1996
(VIRGIL R. WILLIAMS)
*By: /s/ CHARLES M. BERGER
CHARLES M. BERGER, ATTORNEY-IN-FACT
</TABLE>
II-6
<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. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Charlotte, North Carolina, on November 25,
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. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Charlotte, North Carolina, on November 25,
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. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Charlotte, North Carolina, on November 25,
1996.
NB CAPITAL TRUST III
By:/s/ JOHN E. MACK
JOHN E. MACK
REGULAR TRUSTEE
II-7
<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 Richards, Layton & Finger
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 Richards, Layton & Finger (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>
<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
and/or the filing of Amendment No. 1 to this Registration Statement
EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
for offering of
_____ Preferred Securities
NB CAPITAL TRUST I
(a Delaware Trust)
____% Trust Originated Preferred Securities (SM)*("TOPrS (SM)")
(Liquidation Amount of $25 per Preferred Security)
UNDERWRITING AGREEMENT
---------------
November __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Dean Witter Reynolds Inc.,
A.G. Edwards & Sons, Inc.,
PaineWebber Incorporated,
Prudential Securities Incorporated,
Smith Barney Inc.,
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
NB Capital Trust I (the "Trust"), a statutory business trust organized
under the Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (S)(S) 3801 et seq.),
and NationsBank Corporation, a North Carolina corporation (the "Company" and,
together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with Merrill Lynch & Co. Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Dean Witter Reynolds Inc., A.G. Edwards & Sons, Inc.,
PaineWebber Incorporated, Prudential Securities Incorporated , Smith Barney Inc.
and each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch & Co. Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Dean Witter
*(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
Reynolds Inc., A.G. Edwards & Sons, Inc., PaineWebber Incorporated, Prudential
Securities Incorporated and Smith Barney Inc. are acting as representatives (in
such capacity, the "Representatives"), with respect to the sale by the Trust and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of _____% Trust Originated Preferred Securities (liquidation
amount of $___ per preferred security) of the Trust (the "Initial Preferred
Securities") set forth in said Schedule A. The Company also grants to the
Underwriters, severally and not jointly, the option described in Section 2(c)
(the "Option") to purchase up to _______ additional ____% Trust Originated
Preferred Securities (liquidation amount of $________ per preferred security) of
the Trust (the "Option Preferred Securities" and together with the Initial
Preferred Securities the "Preferred Securities") solely to cover
over-allotments. The Preferred Securities will be guaranteed on a subordinated
basis by the Company, to the extent set forth in the Prospectus (as defined
herein), with respect to distributions and payments upon liquidation, redemption
and otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
Securities Guarantee Agreement, dated as of ________, 1996, and as may be
amended, if necessary, in connection with an exercise of the Option (the
"Preferred Securities Guarantee Agreement"), between the Company and The Bank of
New York, as trustee (the "Guarantee Trustee"), and will be entitled to the
benefits of certain backup undertakings described in the Prospectus (as defined
herein) with respect to the Company's agreement pursuant to the Supplemental
Indenture (as defined herein) to pay all expenses relating to administration of
the Trust (other than payment obligations with respect to the Preferred
Securities). The Preferred Securities and the related Preferred Securities
Guarantees are referred to herein as the "Securities."
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-15375) and a
related preliminary prospectus for the registration under the Securities Act of
1933, as amended (the "1933 Act") of (i) the Preferred Securities, (ii) the
Preferred Securities Guarantee, and (iii) the Junior Subordinated Notes (as
defined below) to be issued and sold to the Trust by the Company, have filed
such amendments thereto, if any, and such amended preliminary prospectuses as
may have been required to the date hereof, and will file such additional
amendments thereto and such amended prospectuses as may hereafter be required.
Such registration statement (as amended) and the prospectus constituting a part
thereof (including, in each case, all documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act and the information, if any, deemed to be part thereof pursuant to Rule
430A(b) of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations")), as from time to time amended or supplemented pursuant
to the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), or otherwise, are hereinafter referred to as the "Registration Statement"
and the "Prospectus," respectively, except that, if any revised prospectus shall
be provided to the Underwriters by the Offerors for use in connection with the
offering of the Preferred Securities which differs from the Prospectus on file
at the Commission at the time the Registration Statement became effective
(whether or not such revised prospectus is required to be filed by the Offerors
pursuant to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus"
shall refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such
-2-
<PAGE>
use. All references in this Agreement to financial statements and schedules and
other information that is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information that are or are deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act that is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Preferred Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered and the
Declaration (as defined herein), the Indenture (as defined herein) and the
Preferred Securities Guarantee have been qualified under the Trust Indenture Act
of 1939, as amended (the "1939 Act"). The entire proceeds to the Trust from the
sale of the Preferred Securities will be combined with the entire proceeds from
the sale by the Trust to the Company of its common securities (the "Common
Securities"), as guaranteed on a subordinated basis by the Company, to the
extent set forth in the Prospectus, with respect to distributions and payments
upon liquidation and redemption thereof (the "Common Securities Guarantee" and
together with the Preferred Securities Guarantee, the "Guarantees") pursuant to
the Common Securities Guarantee Agreement, dated as of ______, 1996, as amended,
if necessary, in connection with an exercise of the Option (the "Common
Securities Guarantee Agreement" and, together with the Preferred Securities
Guarantee Agreement, the "Guarantee Agreements"), between the Company and
Guarantee Trustee, as Trustee, and will be used by the Trust to purchase the
$______ aggregate principal amount of % Junior Subordinated Deferrable Interest
Notes due _______________ (the "Junior Subordinated Notes") issued by the
Company (and such additional aggregate principal amount of Junior Subordinated
Notes as may be necessary if the Option is exercised), under the Indenture (as
defined herein). The Preferred Securities and the Common Securities will be
issued pursuant to the amended and restated declaration of trust of the Trust,
dated as of November __, 1996 (the "Declaration") (as may be further amended, if
necessary, subject to the exercise of the Option), among the Company, as
Sponsor, John E. Mack, William L. Maxwell and Marc D. Oken, as trustees (the
"Regular Trustees"), and The Bank of New York, a Delaware banking corporation,
as property trustee (the "Property Trustee" and, together with the Regular
Trustees, the "Trustees"), and the holders from time to time of undivided
beneficial interests in the assets of the Trust. The Junior Subordinated Notes
will be issued pursuant to an indenture, dated as of November __, 1996 (the
"Base Indenture"), between the Company and The Bank of New York, as trustee (the
"Debt Trustee"), and a supplement to the Base Indenture, dated as of November
__, 1996 (the "Supplemental Indenture," and together with the Base Indenture and
any other amendments or supplements thereto, the "Indenture"), between the
Company and the Debt Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Offerors jointly and
severally represent and warrant to each Underwriter as of the date hereof and as
of the
-3-
<PAGE>
Closing Time (as hereinafter defined) and as of the Option Closing Time (as
hereinafter defined), if any, as follows:
(i) At the time the Registration Statement became effective
and as of the date hereof, the Registration Statement complied in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, dated the date
hereof (unless the term "Prospectus" refers to a prospectus that has
been provided to the Underwriters by the Trust for use in connection
with the offering of the Securities and that differs from the
Prospectus on file at the Commission at the time the Registration
Statement became effective, in which case, at the time it is first
provided to the Underwriters for such use) and at Closing Time or
Option Closing Time referred to in Section 2 hereof, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, the Offerors make no representations or warranties as to (A)
that part of the Registration Statement which constitutes the
Statements of Eligibility and Qualification (Forms T-1) under the 1939
Act of the Debt Trustee, the Property Trustee or the Guarantee Trustee
or (B) the information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished
in writing to the Offerors by or on behalf of any Underwriter through
the Representatives specifically for use in the Registration Statement
and the Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or Prospectus, at the time
they were or hereafter are filed with the Commission complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations").
(iii) To the best knowledge of the Offerors, Price Waterhouse
LLP, the accountants who certified the financial statements and
supporting schedules included in or incorporated by reference into the
Registration Statement, are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with
the power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement, the Preferred
Securities, the Common Securities and the Declaration; the Trust is not
a party to or otherwise bound by any agreement other than those
described in the Prospectus; the Trust is and will be
-4-
<PAGE>
classified for United States federal income tax purposes as a grantor
trust and not as an association taxable as a corporation; and the Trust
is and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
(v) The Common Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered by the
Trust to the Company against payment therefor as described in the
Registration Statement and Prospectus, will be validly issued and,
subject to the terms of the Declaration, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and will
conform to all statements relating thereto contained in the Prospectus;
the issuance of the Common Securities is not subject to preemptive or
other similar rights.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(vii) The Declaration has been duly authorized by the Company,
as Sponsor, and will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Property Trustee, the Declaration is
and will be a valid and binding obligation of the Company, the Trust
and the Regular Trustees, enforceable against the Company and the
Regular Trustees in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance or other similar laws
affecting the rights of creditors now or hereafter in effect, and to
equitable principles that may limit the right to specific enforcement
of remedies, and further subject to 12 U.S.C. 1818(b)(6)(D) (or any
successor statute) and any bank regulatory powers now or hereafter in
effect and to the application of principles of public policy
(collectively, the "Permitted Exceptions") and will conform to all
statements relating thereto in the Prospectus; and the Declaration has
been duly qualified under the 1939 Act.
(viii) Each of the Guarantee Agreements has been duly
authorized by the Company and, when validly executed and delivered by
the Company, and, in the case of the Preferred Securities Guarantee
Agreement, assuming due authorization, execution and delivery of the
Preferred Securities Guarantee by the Guarantee Trustee, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by the Permitted Exceptions,
and each of the Guarantees and the Guarantee Agreements will conform to
all statements relating thereto contained in the Prospectus; and the
Trust pursuant to the Preferred Securities Guarantee Agreement will
have been duly qualified under the 1939 Act.
(ix) The Preferred Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered
pursuant to this Agreement against
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payment of the consideration therefor set forth in Schedule B hereto
will be validly issued and, subject to the terms of the Declaration,
fully paid and non-assessable undivided beneficial interests in the
Trust, will be entitled to the benefits of the Declaration and will
conform to all statements relating thereto contained in the Prospectus;
the issuance of the Preferred Securities is not subject to preemptive
or other similar rights; and, subject to the terms of the Declaration,
holders of Preferred Securities will be entitled to the same limitation
of personal liability under Delaware law as extended to stockholders of
private corporations for profit.
(x) Each of the Regular Trustees of the Trust is an employee
of the Company and has been duly authorized by the Company to execute
and deliver the Declaration; the Declaration has been duly executed and
delivered by the Regular Trustees and is a valid and binding obligation
of each Regular Trustee, enforceable against such Regular Trustee in
accordance with its terms except to the extent that enforcement thereof
may be limited by the Permitted Exceptions.
(xi) None of the Offerors is, and upon the issuance and sale
of the Preferred Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus none will
be, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act).
(xii) No authorization, approval, consent or order of any
court or governmental authority or agency is necessary in connection
with the issuance and sale of the Common Securities or the offering of
the Preferred Securities, the Junior Subordinated Notes or the
Guarantees hereunder, except such as may be required under the 1933 Act
or the 1933 Act Regulations or state securities laws and the
qualification of the Declaration, the Preferred Securities Guarantee
Agreement and the Indenture under the 1939 Act.
(b) The Company represents and warrants to each Underwriter as
of the date hereof and as of the Closing Time (as hereinafter defined) and as of
the Option Closing Time (as hereinafter defined), if any, as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings or
business affairs of the Trust or the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary
course of business.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina with corporate power to own, lease and operate its
properties and to conduct its business as described in the Prospectus,
to enter into and perform its obligations under this Agreement, the
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Declaration, as Sponsor, the Indenture and each of the Guarantees and
to purchase, own, and hold the Common Securities issued by the Trust;
the Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the character or location of its
properties or the nature or the conduct of its business requires such
qualification, except for any failures to be so qualified or in good
standing which, taken as a whole, are not material to the Company and
its subsidiaries, considered as one enterprise.
(iii) NationsBank, National Association, NationsBank, National
Association (South) and NationsBank of Texas, National Association (or
the successors to such entities) (collectively, the "Principal
Subsidiary Banks") are national banking associations formed under the
laws of the United States and authorized thereunder to transact
business; all of the issued and outstanding capital stock of each
Principal Subsidiary Bank has been duly authorized and validly issued,
is fully paid and non-assessable; and the capital stock of each
Principal Subsidiary Bank owned by the Company, directly or through
subsidiaries, is owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Indenture has been duly authorized by the Company
and, when validly executed and delivered by the Company, will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by the Permitted Exceptions;
the Indenture will conform to all statements relating thereto contained
in the Prospectus; and the Indenture has been duly qualified under the
1939 Act.
(v) The Junior Subordinated Notes have been duly authorized by
the Company and have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the extent
that enforcement thereof may be limited by the Permitted Exceptions,
will be in the form contemplated by, and subject to the Permitted
Exceptions entitled to the benefits of, the Indenture and will conform
to all statements relating thereto in the Prospectus.
(vi) The Company's obligations under the Guarantees are
subordinate and junior in right of payment to all liabilities of the
Company and are pari passu with the most senior preferred stock issued
by the Company.
(vii) The Junior Subordinated Notes are subordinated and
junior in right of payment to all "Senior Obligations" (as defined in
the Indenture) of the Company.
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<PAGE>
(viii) Each holder of securities of the Company having rights
to the registration of such securities under the Registration Statement
has waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intention to file the
Registration Statement.
(ix) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and
compliance by the Company with its obligations hereunder will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Principal Subsidiary
Banks pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of the
Principal Subsidiary Banks is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or
any of the Principal Subsidiary Banks is subject (except for conflicts,
breaches and defaults which would not, individually or in the
aggregate, be materially adverse to the Company and its subsidiaries
taken as a whole or materially adverse to the transactions contemplated
by this Agreement), nor will such action result in any material
violation of the provisions of the articles of incorporation or by-laws
of the Company, or any applicable law, administrative regulation or
administrative or court decree.
(c) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(d) The Trust represents and warrants to each Underwriter as
of the date hereof and as of the Closing Time (as hereinafter defined) and as of
the Option Closing Time (as hereinafter defined), if any, as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the a condition, financial or otherwise, or in the earnings or
business affairs of the Trust, whether or not arising in the ordinary
course of business, and (B) there have been no transactions entered
into by the Trust, other than in the ordinary course of business, which
are material with respect to the Trust.
(ii) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
best knowledge of the Trust, threatened, against or affecting the Trust
that is required to be disclosed in the Prospectus, other than actions,
suits or proceedings which are not reasonably expected, individually or
in the aggregate, to have a material adverse effect on the condition,
financial or otherwise, or in the earnings or business affairs of the
Trust, whether or not arising in the ordinary course of business; and
there are no transactions, contracts or documents of the Trust that are
required to be filed
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<PAGE>
as exhibits to the Registration Statement by the 1933 Act or by the
1933 Act Regulations that have not been so filed.
(iii) The Trust possesses adequate certificates, authorities
or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies to conduct the business now operated by
it, and the Trust has not received any notice of proceedings relating
to the revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding would materially and adversely
affect the condition, financial or otherwise, or in the earnings or
business affairs of the Trust.
(iv) The execution, delivery and performance of this Agreement, the
Declaration, the Guarantee Agreements and the Guarantees, the issuance and sale
of the Preferred Securities and the Common Securities, and the consummation of
the transactions contemplated herein and therein and compliance by the Trust
with its obligations hereunder and thereunder have been duly authorized by all
necessary action (corporate or otherwise) on the part of the Trust and do not
and will not result in any violation of the Declaration or Certificate of Trust
and do not and will not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which the Trust is a party or by which it
may be bound or to which any of its properties may be subject or (B) any
existing applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body having
jurisdiction over the Trust, or any of its properties (except for conflicts,
breaches, violations or defaults which would not, individually or in the
aggregate, be materially adverse to the Trust, or materially adverse to the
transactions contemplated by this Agreement).
(e) Each certificate signed by any Trustee of the
Trust and delivered to the Representatives or counsel for the Underwriters shall
be deemed to be a representation and warranty by the Trust to each Underwriter
as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at the price per
security set forth in the Schedule B, the number of Initial Preferred Securities
set forth in Schedule A opposite the name of such Underwriter (except as
otherwise provided in Schedule B), plus any additional number of Initial
Preferred Securities that such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
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<PAGE>
The purchase price per security to be paid by the several Underwriters
for the Initial Preferred Securities shall be an amount equal to the initial
public offering price. The initial public offering price per Preferred Security
shall be a fixed price to be determined by agreement between the Representatives
and the Offerors. The initial public offering price and the purchase price are
be set forth in Schedule B. As compensation to the Underwriters for their
commitments hereunder and in view of the fact that the proceeds of the sale of
the Initial Preferred Securities will be used to purchase the Junior
Subordinated Notes of the Company, the Company hereby agrees to pay at Closing
Time to the Representatives, for the accounts of the several Underwriters, a
commission per Initial Preferred Security determined by agreement between the
Representatives and the Company for the Initial Preferred Securities to be
delivered by the Trust hereunder at Closing Time. The commission is set forth in
Schedule B.
(b) Payment of the purchase price for, and delivery of certificates
for, the Initial Preferred Securities shall be made at the office of Stroock &
Stroock & Lavan, or at such other place as shall be agreed upon by the
Representatives, the Company and the Trust, at 10:00 A.M. New York time on the
[third] business day (unless postponed in accordance with the provisions of
Section 10) after the date hereof, or such other time not later than ten
business days after such date as shall be agreed upon by Representatives, the
Trust and the Company (such time and date of payment and delivery being herein
called "Closing Time"). Payment shall be made to the Trust by wire transfer or
certified or official bank check or similar same day funds payable to the order
of the Trust to an account designated by the Trust, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Initial Preferred Securities to be purchased by them. Unless otherwise
agreed, certificates for the Initial Preferred Securities shall be in the form
set forth in the Declaration, and such certificates shall be deposited with a
custodian (the "Custodian") for The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as nominee for DTC.
At the Closing Time, the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under Section 2 hereof by
wire transfer or certified or official bank check or checks payable to the
Representatives in same day funds.
(c) In addition, on the basis of the representations and warranties
contained herein, and subject to the terms and conditions set forth herein, the
Trust grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional _______ Option Preferred Securities at the same
price per security determined as provided above for the Initial Preferred
Securities plus any accrued distributions thereon. The option hereby granted
will expire 30 days after the date hereof, and may be exercised, in whole or in
part, only for the purpose of covering over-allotments upon written notice by
the Representatives to the Trust and the Company setting forth the number of
Option Preferred Securities as to which the several Underwriters are exercising
the option, the time and date of payment and delivery thereof. Such times and
dates of delivery (each, on "Option Closing Time") shall be determined by the
Representatives but shall not be later than [three] full business days after the
exercise of such option and not in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option
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<PAGE>
Preferred Securities, the Option Preferred Securities as to which the option is
exercised shall be purchased by the Underwriters severally and not jointly, in
proportion to, as nearly as practicable, their respective Initial Preferred
Securities underwriting obligations as set forth on Schedule A. The Company
hereby agrees to pay at the Option Closing Time to the Representatives, for the
accounts of the several Underwriters, a commission per Option Preferred Security
equal to the commission set forth on Schedule B.
In addition, in the event that any or all of the Option Preferred
Securities are purchased by the Underwriters, delivery and payment for the
Option Preferred Securities shall be made at the offices of Stroock & Stroock &
Lavan, or at such other place as the Trust, the Company and the Representatives
shall determine, on each Option Closing Time as specified in the notice from the
Representatives to the Company. Delivery of the Option Preferred Securities
shall be made to the Representatives against payment by the Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company in the manner set forth in Section 2(b) above. Unless otherwise agreed,
certificates for the Option Preferred Securities shall be in the form set forth
in the Declaration, and such certificates shall be deposited with the Custodian
for DTC and registered in the name of Cede & Co., as nominee for DTC.
SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors
jointly and severally covenants with each Underwriter as follows:
(a) The Offerors will notify the Representatives promptly, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Offerors will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare (i) any amendment to the Registration Statement
(including any post-effective amendment), (ii) any amendment or supplement to
the Prospectus (including any revised prospectus which the Offerors propose for
use by the Underwriters in connection with the offering of the Preferred
Securities which differs from the prospectus on file at the Commission at the
time the Registration Statement became effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), or (iii) any document that would as a result thereof be
incorporated by reference in the Prospectus whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish the Representatives with copies of any
such amendment, supplement or other document within a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment, supplement or other document or use any such prospectus to which
the Representatives or counsel for the Underwriters shall
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<PAGE>
reasonably object. Subject to the foregoing, the Offerors will file the
Prospectus pursuant to Rule 424(b) and Rule 430A under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement.
(c) The Offerors will deliver to the Representatives as many signed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) as
the Representatives may reasonably request and will also deliver to the
Representatives a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters.
(d) The Offerors will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act, such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request for the purposes contemplated by the
1933 Act or the respective applicable rules and regulations of the Commission
thereunder.
(e) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Preferred Securities, any event
shall occur as a result of which the Prospectus as then amended or supplemented
will include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading or if it shall be
necessary to amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Offerors will,
subject to paragraph (b) above, promptly prepare and file with the Commission
such amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance and the Offerors will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriters,
to qualify the Preferred Securities (and the Preferred Securities Guarantee) and
the Junior Subordinated Notes for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the United States
as the Representatives may designate; provided, however, that none of the
Offerors shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified.
(g) The Company will make generally available to its security holders
and to the Underwriters as soon as practicable, but not later than 90 days after
the close of the period covered thereby, an earnings statement (which need not
be audited) of the Company and its subsidiaries, covering an applicable period
beginning not later than the first day of the Company's fiscal quarter next
following the "Effective Date" (as defined in Rule 158(c) under the Act) of the
Registration Statement, which will satisfy the provisions of Section 11(a) of
the 1933 Act.
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<PAGE>
(h) The Offerors will use best efforts to effect the listing of the
Preferred Securities on the New York Stock Exchange; if the Preferred Securities
are exchanged for Junior Subordinated Notes, the Company will use its best
efforts to effect the listing of the Junior Subordinated Notes on the exchange
on which the Preferred Securities were then listed.
(i) During a period of 30 days from the date hereof, neither the Trust
nor the Company will, without the Representatives' prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any Preferred Securities, any security convertible into
or exchangeable into or exercisable for Preferred Securities or the Junior
Subordinated Notes or any junior subordinated debt securities substantially
similar to the Junior Subordinated Notes or equity securities substantially
similar to the Preferred Securities (except for the Junior Subordinated Notes
and the Preferred Securities issued pursuant to this Agreement); and except for
any preferred securities with a liquidation amount of greater than $25 which are
non-callable for at least years 10 years (except for any call provisions
relating to unanticipated tax or accounting consequences to the Sponsor, the
Trust or holders of such preferred securities or status of the Trust under the
1940 Act) and any junior subordinated debt securities issued in connection
therewith. .
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of each Offerors' obligations under this Agreement,
and will pay: (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Preferred Securities, (iii) the fees
and disbursements of the Company's and the Trust's counsel and accountants, (iv)
the qualification of the Preferred Securities, the Preferred Securities
Guarantee and the Junior Subordinated Notes under securities laws in accordance
with the provisions of Section 3(f) hereof, including filing fees and the fees
and disbursements of Stroock & Stroock & Lavan, counsel for the Underwriters, in
connection therewith and in connection with the preparation of any blue sky
survey, (v) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus, and of the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriters of
copies of any blue sky survey, (vii) the fee of the National Association of
Securities Dealers, Inc., if applicable, (viii) the fees and expenses of the
Debt Trustee, including the fees and disbursements of counsel for the Debt
Trustee in connection with the Indenture and the Junior Subordinated Notes, (ix)
the fees and expenses of the Property Trustee, and the Guarantee Trustee,
including the fees and disbursements of counsel for the Property Trustee in
connection with the Declaration and the Certificate of Trust; (x) any fees
payable in connection with the rating of the Preferred Securities and Junior
Subordinated Notes; (xi) the fees and expenses incurred in connection with the
listing of the Preferred Securities and, if applicable, the Junior Subordinated
Notes on the New York Stock Exchange, and (xii) the cost and charges of any
transfer agent or registrar and (xiii) the cost of qualifying the Preferred
Securities with DTC.
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If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9 hereof, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of Stroock & Stroock & Lavan,
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Offerors herein contained or in certificates of officers
of the Company, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the Representatives,
at a later time and date, not later, however, than 5:30 P.M. on the first
business day following the date hereof, or at such later time and date as may be
approved by the Representatives; and at Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the 1933
Regulations and in accordance with Section 3(b) and prior to Closing Time the
Offerors shall have provided evidence satisfactory to the Representatives of
such timely filing.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion of Smith Helms Mulliss & Moore,
L.L.P., counsel for the Company, dated as of the Closing Time, to the effect of
paragraphs (i) and (v) through (xiii) below, and the favorable opinion of Paul
J. Polking, General Counsel to the Company, dated as of the Closing Time, to the
effect of paragraphs (ii), (iii) and (iv) below:
(i) The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of North
Carolina, has the corporate power and authority to own its properties,
conduct its business as described in the Prospectus and perform its
obligations under this Agreement, and is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended;
the Principal Subsidiary Banks are national banking associations formed
under the laws of the United States and authorized thereunder to
transact business.
(ii) Except for those jurisdictions specifically enumerated in
such opinion, neither the Company nor any of the Principal Subsidiary
Banks is required to be qualified or licensed to do business as a
foreign corporation in any jurisdiction.
(iii) All the outstanding shares of capital stock of each
Principal Subsidiary Bank have been duly and validly authorized and
issued and are fully paid and (except as provided in 12 U.S.C. ss. 55,
as amended) non-assessable, and, except as otherwise set
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forth in the Prospectus, all outstanding shares of capital stock of the
Principal Subsidiary Banks (except directors' qualifying shares) are
owned, directly or indirectly, by the Company free and clear of any
perfected security interest and, to the best knowledge of such counsel,
any other security interests, claims, liens or encumbrances.
(iv) To the best knowledge of such counsel, there is no
pending threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract, or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit,
which is not described or filed as required.
(v) If the Initial Preferred Securities are to be listed on
the New York Stock Exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of satisfactory
distribution, or the Company has filed a preliminary listing
application and all required supporting documents with respect to the
Initial Preferred Securities with the New York Stock Exchange and such
counsel has no reason to believe that the Initial Preferred Securities
will not be authorized for listing, subject to official notice of
issuance and evidence of satisfactory distribution.
(vi) The Registration Statement has become effective under the
1933 Act; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened; the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements and other financial and statistical information contained
therein or incorporated by reference therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the applicable requirements of the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with its terms
(subject to the Permitted Exceptions, and except insofar as the
enforceability of the indemnity and contribution provisions contained
in this Agreement may be limited by federal and state securities laws,
and further subject to 12 U.S.C. 1818(b)(6)(D) and any bank regulatory
powers and to the application of principles of public policy).
(viii) No authorization, approval, consent or order of any
court or governmental authority or agency is required in connection
with the offering, issuance or sale of the Initial Preferred
Securities, the Preferred Securities Guarantee and the Junior
Subordinated Notes to the Underwriters, except (a) such as may be
required under the
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1933 Act and the 1933 Act Regulations and such as may be required under
the blue sky or insurance laws of any jurisdiction, and (b)the
qualification of the Declaration, the Preferred Securities Guarantee
Agreement and the Indenture under the 1939 Act.
(ix) The Declaration has been duly authorized, executed and
delivered by the Company and the Regular Trustees and has been duly
qualified under the 1939 Act.
(x) Each of the Guarantee Agreements has been duly authorized,
executed and delivered by the Company; the Preferred Securities
Guarantee Agreement, assuming it is duly authorized, executed and
delivered by the Guarantee Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Permitted Exceptions; and the Preferred
Securities Guarantee Agreement has been duly qualified under the 1939
Act.
(xi) The Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery
thereof by the Debt Trustee, is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
Permitted Exceptions; the Indenture has been duly qualified under the
1939 Act; and the Indenture conforms to the description thereof in the
Prospectus.
(xii) The Junior Subordinated Notes have been duly authorized
and executed by the Company and, when authenticated by the Trustee in
the manner provided in the Indenture and delivered against payment
therefor, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by the Permitted
Exception; and the Junior Subordinated Notes conform to the description
thereof in the Prospectus.
(xiii) Neither the Company nor the Trust is, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus neither will be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the 1940
Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
North Carolina or the United States, to the extent deemed proper and specified
in such opinion, upon the opinion of other counsel of good standing believed to
be reliable and who are satisfactory to counsel for the Underwriters; and (B) as
to matters of fact, to the extent deemed proper, on the representations and
warranties of the Offerors contained herein or in the Declaration, the
Indenture, the Guarantees, the Subscription Agreement, of even date herewith,
between the Company and the Trust covering the Common Securities and the Note
Purchase Agreement, of even date herewith, between the
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Company and the Trust or on certificates of responsible officers of the Company
and its subsidiaries and public officials.
(2) The favorable opinion of Richards, Layton & Finger,
Special Delaware counsel to the Offerors, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
formation and valid existence of the Trust as a business trust have
been made; the Trust has all necessary power and authority to own
property and to conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its
obligations under this Agreement, the Initial Preferred Securities and
the Common Securities; the Trust is duly qualified and in good standing
as a foreign company in any other jurisdiction in which such
qualification is necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect
on the Trust; and the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
(ii) Assuming due authorization, execution and delivery by the
Company and the Trustees, the Declaration is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by the Permitted Exceptions.
(iii) The Common Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the
Declaration) fully paid and non-assessable beneficial interests in the
assets of the Trust, and the issuance of the Common Securities is not
subject to preemptive or other similar rights.
(iv) The Initial Preferred Securities have been duly
authorized by the Declaration and are validly issued and, subject to
the terms of the Declaration, when delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and non-assessable beneficial interests in the assets of the
Trust; the holders of the Initial Preferred Securities will, subject to
the terms of the Declaration, be entitled to the same limitation of
personal liability under Delaware law as is extended to stockholders of
private corporations for profit; and the issuance of the Initial
Preferred Securities is not subject to preemptive or other similar
rights.
(v) The Common Securities, the Initial Preferred Securities
and the Declaration conform in all material respects to all statements
relating thereto contained in the Prospectus.
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(vi) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right.
(vii) This Agreement has been duly authorized, executed and
delivered by the Trust.
(viii) The execution, delivery and performance of this
Agreement, the Declaration, the Initial Preferred Securities and the
Common Securities; the consummation of the transactions contemplated
herein and therein; and the compliance by the Trust with its
obligations hereunder and thereunder do not and will not result in any
violation of the Declaration or Certificate of Trust, and do not and
will not conflict with, or result in, a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Trust under (A) any contract, indenture, mortgage, loan
agreement, note, lease or any other agreement or instrument known to
such counsel to which the Trust is a party or by which it may be bound
or to which any of its properties may be subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect on the condition, financial or
otherwise, or in the earnings or business affairs of the Trust, (B) any
existing applicable law, rule or regulation (other than the securities
or blue sky laws of the various states, as to which such counsel need
express no opinion) or (C) any judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
or any regulatory body or administrative agency or other governmental
body having jurisdiction over the Trust or any of its properties.
(3) The favorable opinion, dated as of Closing Time, of
Emmett, Marvin & Martin, LLP, counsel of The Bank of New York (Delaware), as
Property Trustee under the Declaration, and Guarantee Trustee under the
Preferred Securities Guarantee Agreement, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Bank of New York (Delaware) is a Delaware banking
corporation with trust powers, duly organized, validly existing and in
good standing under the laws of the State of Delaware with all
necessary power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of the Declaration.
(ii) The execution, delivery and performance by the [Debt
Trustee of the Indenture and the execution, delivery and performance by
the] Property Trustee of the Declaration and the execution, delivery
and performance by the Guarantee Trustee of the Preferred Securities
Guarantee Agreement have been duly authorized by all necessary
corporate action on the part of the [Debt Trustee], the Property
Trustee and the Guarantee Trustee, respectively. The [Indenture, the]
Declaration and the Guarantee Agreements have been duly executed and
delivered by the [Debt Trustee], the Property Trustee and the Guarantee
Trustee, respectively, and
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constitute the legal, valid and binding obligations of the [Debt
Trustee], the Property Trustee and the Guarantee Trustee, respectively,
enforceable against the [Debt Trustee], the Property Trustee and the
Guarantee Trustee, respectively, in accordance with their terms, except
as enforcement thereof may be limited by the Permitted Exceptions.
(iii) The execution, delivery and performance of the
[Indenture, the], Declaration and the Guarantee Agreements by the [Debt
Trustee], Property Trustee and the Guarantee Trustee, respectively,
does not conflict with or constitute a breach of the Articles of
Organization or Bylaws of the [Debt Trustee], Property Trustee and the
Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is
required for the execution, delivery or performance by the [Debt
Trustee], the Property Trustee and the Guarantee Trustee of the
[Indenture,the], Declaration and the Guarantee Agreements,
respectively.
(4) The favorable opinion, dated as of Closing Time, of
Stroock & Stroock & Lavan, counsel for the Underwriters, in form and substance
satisfactory to the Underwriters with respect to the legal existence of the
Company and the Trust, the Initial Preferred Securities, the Indenture, the
Preferred Securities Guarantee Agreement, this Agreement, the Registration
Statement, the Prospectus and other related matters as the Representatives may
require.
In giving its opinion, Stroock & Stroock & Lavan may rely as
to certain matters of Delaware law upon the opinion of Richards, Layton &
Finger, counsel for the Offerors, which shall be delivered in accordance with
Section 5(b)(2) hereto.
(5) The favorable opinion of Stroock & Stroock & Lavan,
special tax counsel to the Company and the Trust, as to certain Federal tax
matters set forth in the Prospectus under "United States Income Taxation."
(6) In giving their opinions required by subsection (b), of
this Section, Mr. Polking and Smith Helms Mulliss & Moore, L.L.P. shall each
additionally state that nothing has come to their attention that has caused them
to believe that the Registration Statement (except for financial statements and
schedules and other financial or statistical data included or incorporated by
reference, therein, as to which counsel need make no statement), at the time it
became effective or as of the date of their respective opinions, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus (except for financial statements and schedules and other
financial or statistical data included or incorporated by reference therein, as
to which counsel need make no statement), as at the date hereof or at Closing
Time, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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<PAGE>
(7) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, and the Representatives shall
have received a certificate of a Senior Vice President of the Company and of the
chief financial or chief accounting officer of the Company and a certificate of
the Trustee of the Trust, and dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Trust and
the Company have complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or threatened by
the Commission.
(8) At the Closing Time, Price Waterhouse LLP shall have
furnished to the Representatives a letter or letters (which may refer to letters
previously delivered to the Representatives), dated as of the Closing Time, in
form and substance satisfactory to the Representatives, confirming that the
response, if any, to Item 10 of the Registration Statement is correct insofar as
it relates to them and stating in effect that:
(i) They are independent accountants within the meaning of the
1933 Act and the 1934 Act and the1933 Act Regulations and the 1934 Act
Regulations.
(ii) In their opinion, the consolidated financial statements
of the Company and its subsidiaries audited by them and included or
incorporated by reference in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations
with respect to registration statements on Form S-3 and the 1934 Act
and the 1934 Act Regulations.
(iii) On the basis of procedures (but not an audit in
accordance with generally accepted auditing standards) consisting of:
(a) Reading the minutes of the meetings of the shareholders,
the board of directors, executive committee and audit committee of the
Company and the boards of directors and executive committees of its
subsidiaries as set forth in the minute books through a specified date
not more than five business days prior to the date of delivery of such
letter;
(b) Performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the unaudited condensed consolidated interim
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financial statements of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statement and
Prospectus and reading the unaudited interim financial data, if any,
for the period from the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and Prospectus
to the date of the latest available interim financial data; and
(c) Making inquiries of certain officials of the Company who
have responsibility for financial and accounting matters regarding the
specific items for which representations are requested below;
nothing has come to their attention as a result of the foregoing
procedures that caused them to believe that:
(1) the unaudited condensed consolidated interim
financial statements, included or incorporated by reference in
the Registration Statement and Prospectus, do not comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the 1934 Act Regulations
thereunder;
(2) any material modifications should be made to the
unaudited condensed consolidated interim financial statements,
included or incorporated by reference in the Registration
Statement and Prospectus, for them to be in conformity with
generally accepted accounting principles;
(3) (i) at the date of the latest available interim
financial data and at the specified date not more than five
business days prior to the date of the delivery of such
letter, there was any change in the capital stock or the
long-term debt (other than scheduled repayments of such debt)
or any decreases in shareholders' equity of the Company and
the subsidiaries on a consolidated basis as compared with the
amounts shown in the latest balance sheet included or
incorporated by reference in the Registration Statement and
the Prospectus or (ii) for the period from the date of the
latest available financial data to a specified date not more
than five business days prior to the delivery of such letter,
there was any change in the capital stock or the long-term
debt (other than scheduled repayments of such debt) or any
decreases in shareholders' equity of the Company and the
subsidiaries on a consolidated basis, except in all instances
for changes or decreases which the Registration Statement and
Prospectus discloses have occurred or may occur, or Price
Waterhouse LLP shall state any specific changes or decreases.
(iv) The letter shall also state that Price Waterhouse LLP has
carried out certain other specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial
information which are included or incorporated by reference in the
Registration Statement and Prospectus and which are specified by the
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Representatives and agreed to by Price Waterhouse LLP, and has found
such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the
Company and its subsidiaries identified in such letter.
In addition, at the time this Agreement is executed, Price
Waterhouse LLP shall have furnished to the Representatives a letter or
letters, dated the date of this Agreement, in form and substance
satisfactory to the Representatives, to the effect set forth in this
subsection 8.
(9) At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Initial
Preferred Securities as herein contemplated and related proceedings, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Offerors, in connection with the issuance and sale of the Initial
Preferred Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and Stroock & Stroock & Lavan, counsel for the
Underwriters.
(10) At Closing Time, at least one "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the 1933 Act), has rated the Initial Preferred Securities in one of its four
highest rating categories and there shall not have occurred any decrease in the
ratings of any of the securities of the Company or of the Initial Preferred
Securities by any nationally recognized statistical rating organization, and no
such organization shall have publicly announced that it has under surveillance
or review its rating of any of the Company's securities or any of the Initial
Preferred Securities.
(11) At Closing Time, the Initial Preferred Securities shall
have been approved for listing on the New York Stock Exchange upon notice of
issuance.
[(12) At Closing Time, the National Association of
Securities Dealers, Inc. ("NASD") shall have confirmed in writing that it has
not raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.]
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Offerors, in
writing or by telephone or telegraph confirmed in writing, at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof, and except that
Sections 1, 7, and 8 shall survive any such termination and will remain in full
force and effect.
SECTION 6. CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event
the Underwriters exercise the Option to purchase all or any portion of the
Option Preferred Securities and the Option Closing Time determined by the
Representatives pursuant to Section 2
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is later than the Closing Time, the obligations of the several Underwriters to
purchase and pay for the Option Preferred Securities that they shall have
respectively agreed to purchase hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained herein, to the
performance by the Offerors of their obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened; and any
required filing of the Prospectus pursuant to Rule 424(b) under the Act shall
have been made within the proper time period.
(b) As of the Option Closing Time, the Representatives shall have
received, each dated as of the Option Closing Time and relating to the Option
Preferred Securities:
(i) the favorable opinions of Smith Helms Mulliss & Moore,
L.L.P., counsel for the Company, and of Paul J. Polking, General
Counsel to the Company, in form and substance satisfactory to counsel
for the Underwriters, to the same effect as the opinions required by
Section 5(b)(1);
(ii) the favorable opinion of Richards Layton & Finger,
Special Delaware counsel to the Company, in form and substance
satisfactory to counsel for the Underwriters, to the same effect as the
opinion required by Section 5(b)(2);
(iii) the favorable opinion of Emmett, Marvin & Martin,
L.L.P., counsel for [The Bank of New York and] The Bank of New York
(Delaware), to the same effect as the opinion required by Section
5(b)(3);
(iv) the favorable opinion of Stroock & Stroock & Lavan,
counsel for the Underwriters, in form and substance satisfactory to the
Underwriters to the same effect as the opinion required by Section
5(b)(4);
In giving its opinion, Stroock & Stroock & Lavan may rely as
to certain matters of Delaware law upon the opinion of Richards, Layton
& Finger, counsel for the Offerors, which shall be delivered in
accordance with Section 6(b)(2) hereto;
(v) the favorable opinion of Stroock & Stroock & Lavan,
special tax counsel to the Company and the Trust, to the same effect as
the opinion required by Section 5(b)(5);
(vi) a certificate, of a Senior Vice President of the Company
and of the chief financial or chief accounting officer of the Company
with respect to the matters set forth in Section 5(b)(7);
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<PAGE>
(vii) a letter from Price Waterhouse LLP, in form and
substance satisfactory to the Underwriters, substantially the same in
scope and substance as the letter furnished to the Underwriters
pursuant to Section 5(b)(8) except that the "specified date" in the
letter furnished pursuant to this Section 6(b)(vii) shall be a date not
more than [three] days prior to the Option Closing Time; and
(viii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (b)(vii) of this Section 6
or (ii) any change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidiaries,
considered as one enterprise, the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the
Securities as contemplated by the Registration Statement and the
Prospectus;
(ix) At the Option Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Option Preferred Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Offerors, in connection with the issuance and sale of the Option
Preferred Securities as herein contemplated shall be satisfactory in
form and substance to the Representatives and Stroock & Stroock &
Lavan, counsel for the Underwriters;
(x) At the Option Closing Time, at least one "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the 1933 Act), has rated the Preferred Securities in
one of its four highest rating categories and there shall not have
occurred any decrease in the ratings of any of the securities of the
Company or of the Preferred Securities by any nationally recognized
statistical rating organization, and no such organization shall have
publicly announced that it has under surveillance or review its rating
of any of the Company's securities or any of the Preferred Securities;
and
(xi) At the Option Closing Time, the Option Preferred
Securities shall have been approved for listing on the New York Stock
Exchange upon notice of issuance.
[(c) At Option Closing Time, the NASD shall have confirmed in writing
that it has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.]
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the
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Representatives by notice to the Offerors, in writing or by telephone or
telegraph confirmed in writing, at any time at or prior to Option Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and except that Sections 1, 7, and 8
shall survive any such termination and will remain in full force and effect.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION
(a) The Offerors jointly and severally agree to indemnify and
hold harmless each Underwriter and each of its partners, officers, directors,
and employees and each person, if any, who controls any Underwriter within the
meaning of the 1933 Act or the 1934 Act against any losses, claims, damages or
liabilities, and any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales of
the Preferred Securities), joint or several, which arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, or any amendment or supplement
thereto, including information deemed to be part of the Registration Statement
pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, (B) the
Prospectus and any amendment or supplement thereto, or (C) any application or
other document, any amendment or supplement thereto, executed by the Offerors or
based upon information furnished by or on behalf of the Offerors filed in any
jurisdiction in order to qualify the Preferred Securities under the securities
or blue sky laws thereof (each, an "Application") or (ii) the omission or
alleged omission to state in the Registration Statement, or any amendment or
supplement thereto, the Prospectus or any amendment or supplement thereto, or
any Application, a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse as incurred each
Underwriter and each such controlling person for any legal and other expenses
incurred in investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither of the Offerors
shall be liable to any Underwriter in any such case to the extent that any such
loss, claim, damage or liability arises out of, or is based upon, any untrue
statement or alleged untrue statement made in the Prospectus, including any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Offerors by or on behalf of such
Underwriter specifically for inclusion and actually included therein; and
provided further that, as to any Prospectus that has been amended or
supplemented as provided herein, this indemnity agreement shall not inure to the
benefit of any Underwriter, on account of any loss, claim, damage, liability or
action arising out of the sale of Preferred Securities to any person by such
Underwriter if (A) such Underwriter failed to send or give a copy of the final
Prospectus as so amended or supplemented to that person at or prior to the
confirmation of the sale of such Preferred Securities to such person in any case
where such delivery is required by the 1933 Act, and (B) the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in any preliminary Prospectus was corrected in an
amendment or supplement thereto (but only if the sale to such person occurred
after the Offerors provided such Underwriter and the Underwriter received copies
of such amendment or supplement for distribution). This indemnity agreement will
be in addition to any liability which the Offerors may otherwise have.
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(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, the Trust, the Trustees and each of the
Company's directors, each of its officers and each person, if any, who controls
the Company or the Trust within the meaning of the 1933 Act or the 1934 Act, to
the same extent as the foregoing indemnity from the Offerors to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Offerors by such Underwriter and specifically
included in the Prospectus. This indemnity shall be in addition to any liability
which such Underwriter may otherwise have. The Offerors acknowledge that the
statements set forth in the penultimate paragraph of the cover page (p. S-3) and
under the heading "Underwriting" or "Plan of Distribution" in the Prospectus
constitute the only information furnished in writing by the several Underwriters
for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 7, notify such indemnifying party or
parties of the commencement thereof; but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party otherwise than under
subsection (a) or (b) of this Section 7 or to the extent that the indemnifying
party was not adversely affected by such omission. In case any such action is
brought against an indemnified party and it notifies an indemnifying party or
parties of the commencement thereof, the indemnifying party or parties against
which a claim is to be made will be entitled to participate therein and, to the
extent that it or they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the lead Underwriter in the case of paragraph (a) of this Section
7, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions), or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
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indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party, which will not be unreasonably
withheld, unless such indemnified party waived its rights under this Section 7
in writing in which case the indemnified party may effect such a settlement
without such consent.
(d) The Company agrees to indemnify the Trust against all
losses, claims, damages or liabilities due from the Trust under Section 7(a)
hereof.
(e) If the indemnification provided for in the preceding
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then the Offerors or the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Offerors and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion represented
by the percentage that the total discounts and/or commissions received by the
Underwriters bears to the sum of such discounts and/or commissions and the
purchase price of the Preferred Securities specified in Schedule B hereto and
the Offerors are responsible for the balance; provided, however, that (y) in no
case shall any Underwriter (except as may be provided in any agreement among
Underwriters relating to the offering of the Preferred Securities) be
responsible for any amount in excess of the total discounts and/or commissions
received by it with respect to the Preferred Securities purchased by such
Underwriter under this Agreement and (z) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each person who controls either of the
Offerors within the meaning of either the 1933 Act or the 1934 Exchange Act,
each officer or trustee of the Offerors who shall have signed the Registration
Statement and each director or trustee of the Offerors shall have the same
rights to contribution as the Offerors, subject in each case to clause (y) of
this paragraph (e). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this paragraph (e), notify such party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this paragraph (d).
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers or Trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by
-27-
<PAGE>
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Offerors and shall survive delivery of the Preferred Securities to the
Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by
notice to the Offerors, at any time at or prior to Closing Time or the Option
Closing Time (i) if there has been, since the date of this Agreement or since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition, financial or otherwise,
or in the earnings or business affairs of the Trust or the Company and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Preferred Securities or to enforce contracts for the
sale of the Preferred Securities, or (iii) if trading in any securities of the
Company or the Trust has been suspended or materially limited by the Commission
or the applicable exchange, or if trading generally on the New York Stock
Exchange, the American Stock Exchange or on the NASDAQ National Market, has been
suspended, limited or restricted or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
said exchanges or such system or by order of the Commission, the NASD or any
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York, North Carolina or Delaware authorities, or (v) if
there has been any decrease in the ratings of any of the securities of the
Company or of the Preferred Securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
if any such organization shall have publicly announced that it has under
surveillance or review its rating of any of the Company's securities or any of
the Preferred Securities.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and except that Sections 1, 7, and 8
shall survive any such termination and will remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at Closing Time or the Option Closing Time to
purchase the Preferred Securities or the Option Preferred Securities, as the
case may be, that it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
-28-
<PAGE>
(a) if the number of Defaulted Securities does not exceed 10%
of the Preferred Securities or the Option Preferred Securities, as the
case may be, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Preferred Securities or the Option Preferred Securities, as the case
may be, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Offerors shall
have the right to postpone Closing Time or the Option Closing Time, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Merrill Lynch World
Headquarters, North Tower, World Financial Center, New York, New York 10281-
1201, attention of Louis J. Wolfe, Managing Director; notices to the Trust, and
the Company shall be directed to them at NationsBank Corporation, NationsBank
Corporate Center, 100 North Tryon Street, Charlotte, N.C. 28255, attention of
John E. Mack, Senior Vice President and Treasurer.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Trust, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Trust and the Company and their respective successors and
the controlling persons and officers, directors and trustees referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters
and the Trust and the Company and their respective successors, and said
controlling persons and officers, directors and trustees and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Preferred Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
-29-
<PAGE>
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Except as otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
-30-
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
NATIONSBANK CORPORATION
By:_______________________
Title:
NB CAPITAL TRUST I
By:________________________
Title: Trustee
By:________________________
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Dean witter Reynolds Inc.,
A.G. Edwards & Sons, Inc.,
PaineWebber Incorporated,
Prudential Securities Incorporated
Smith Barney Inc.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:________________________
Authorized Signatory
For themselves and as Representatives of the other
Underwriters named in Schedule A hereto.
-31-
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
NUMBER OF INITIAL PREFERRED NUMBER OF OPTION
NAME OF UNDERWRITER SECURITIES PREFERRED SECURITIES
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................
Dean Witter Reynolds Inc..................
A.G. Edwards & Sons, Inc..................
PaineWebber Incorporated..................
Prudential Securities
Incorporated..............................
Smith Barney Inc..........................
------------------------------------ ------------------------------------
==================================== ====================================
Total.................
==================================== ====================================
<PAGE>
SCHEDULE B
Underwriting Agreement dated ____________, 199_
Registration Statement No. 333-
Representatives:
Address of Representatives:
Title, Purchase Price and Description of Securities:
Title:
1. The initial public offering price per security for the
Preferred Securities, determined as provided in said Section 2, shall
be _____________.
2. The purchase price per security for the Preferred
Securities to be paid by the several Underwriters shall be $______,
being an amount equal to the initial public offering price set forth
above, plus, in the case of Option Preferred Securities, any accrued
distributions thereon.
3. The compensation per Preferred Securities to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be _________; provided, however, that the compensation
per Preferred Securities for sales of 10,000 or more Preferred
Securities to a single purchaser shall be ________.
</TABLE>
EXHIBIT 4.7
AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL TRUST I
Dated as of November __, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
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................................................................ 9
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...............................................10
SECTION 2.6 Events of Default; Waiver......................................................................10
SECTION 2.7 Event of Default; Nonpayment Notice............................................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name...........................................................................................12
SECTION 3.2 Office.........................................................................................13
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......................................................14
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...................................... 25
SECTION 3.14 Duration of Trust..............................................................................26
SECTION 3.15 Mergers........................................................................................26
i
<PAGE>
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities........................................................28
SECTION 4.2 Responsibilities of the Sponsor................................................................28
SECTION 4.3 Covenants of the Sponsor.......................................................................29
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............................................ 32
SECTION 5.8 Vacancies among Trustees.......................................................................34
SECTION 5.9 Effect of Vacancies............................................................................34
SECTION 5.10 Meetings.................................................................................... 34
SECTION 5.11 Delegation of Power............................................................................35
Section 5.12 Merger, Conversion, Consolidation or Succession to Business................................. 35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................................................... 35
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........................................................................ 37
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities...................................................................... 38
ii
<PAGE>
SECTION 9.2 Transfer of Certificates.......................................................................39
SECTION 9.3 Deemed Security Holders..................................................................... 39
SECTION 9.4 Book-Entry Interests...........................................................................40
SECTION 9.5 Notices to Clearing Agency.................................................................. 40
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
iii
<PAGE>
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability................................................................................... 42
SECTION 10.2 Exculpation....................................................................................43
SECTION 10.3 Fiduciary Duty.............................................................................. 43
SECTION 10.4 Indemnification............................................................................. 44
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.................................................................................. 50
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.......................................... 55
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.................................................................... 58
iv
<PAGE>
Page
ANNEX I TERMS OF SECURITIES............................................................I-1
ANNEX I-A ADDITIONAL SECURITIES........................................................I-A-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE....................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE...........................................A2-1
</TABLE>
v
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
<C> <C>
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)
</TABLE>
- ---------------
* 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.
vi
<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 Business Trust Act pursuant
to a Declaration of Trust dated as of October 29, 1996 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary 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.
"Additional Securities" means any Preferred Securities
purchased by the Underwriters in connection with any Option contained in the
Underwriting Agreement and any additional Common Securities purchased by the
Sponsor in connection with the exercise of such Option.
"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.
2
<PAGE>
"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 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" and any "Option
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 December __, 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.
3
<PAGE>
"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 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.
4
<PAGE>
"Indenture" means the Indenture and First Supplemental
Indenture, each dated as of November __, 1996, among the Note Issuer and the
Note Trustee, and any indenture supplemental thereto pursuant to which the Notes
are to be issued.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"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.
"Nonpayment" has the meaning set forth in Section 2.7.
"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
5
<PAGE>
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;
(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.
"Option" means the option to purchase Additional Securities
granted under the terms of the Underwriting Agreement.
"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 December __, 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.
6
<PAGE>
"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.
"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 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.
"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 Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
7
<PAGE>
"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 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.
"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 among the Sponsor, the Trust and
the Underwriters named therein.
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.
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(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) 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 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.
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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 Indenture 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 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
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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:
(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 Inden-
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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 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.
SECTION 2.7 Event of Default; Nonpayment Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default or Nonpayment of principal, premium,
if any, or interest, when due, on the Notes ("Nonpayments") transmit by
mail, first class postage prepaid, to the Holders of the Securities,
notices of all Events of Default or Nonpayments with respect to the
Securities actually known to a Responsible Officer of the Property
Trustee, unless such Events of Default or Nonpayments have been cured
before the giving of such notice ;
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) an Event of Default under Section 5.01 of the
Indenture or a Nonpayment; 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.
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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 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.
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.
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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 Securi-
ties, and the issuance of Securities shall be limited to a simultaneous
issuance of both Preferred Securities and Common 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
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(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 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 incidental to
carry out any of the purposes of the Trust;
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(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 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.
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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.
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
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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.
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. Any accrued Distributions paid by the purchaser of any
Additional Securities shall be deposited in the Property
Trustee Account. 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
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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 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 duties and obligations under this Declaration or
the Trust Indenture Act; provided however, that if a Nonpayment has
occurred and is continuing, a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Notes having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder (a "Direct Action") after the respective due
date specified in the Notes. In connection with such Direct Action, the rights
of the Holders of the Common Securities will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Note
Issuer to such Holder of Preferred Securities in such Direct Action.
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.
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(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, 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
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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 obligations 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;
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(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, safekeeping and physical pres ervation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and 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, 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
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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) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, 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;
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(iv) 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;
(v) 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 jurisdiction;
(vi) the Property Trustee shall be under no ob-
ligation 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 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;
(vii) 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;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties
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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;
(ix) 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;
(x) 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 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 ac-
tion, (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;
(xi)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
(xii) 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
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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 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
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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 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 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);
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(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 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
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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 application to the
New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(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.
SECTION 4.3 Covenants of the Sponsor.
For so long as the Preferred Securities remain outstanding,
the Company will covenant (i) to maintain 100% direct or indirect ownership of
the Common Securities, (ii) to use its reasonable best efforts to cause the
Trust (a) to remain a statutory business trust, except as permitted by this
Declaration in connection with the Trust's liquidation, merger, or
consolidation, and (b) to not be classified as an association taxable as a
corporation or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes
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and (iii) to use its reasonable best efforts to cause each Holder of Trust
Securities to be treated as owning an undivided beneficial ownership interest in
the Preferred 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.
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
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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).
(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
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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.
As of 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
(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, bankruptcy,
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. Additional Securities issued in connection with the
exercise of the Option shall be included in the classes of Preferred
and Common Securities hereunder.
(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.
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(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed
to the terms of, and shall be bound by, this Declaration.
SECTION 7.2 Paying Agent.
In the event that the Preferred Securities are not in book-
entry only form, the Trust shall maintain in New York, 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;
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(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 of the
Notes endorsed thereon shall have been distributed 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) Subject to this Article IX and Section 4.3, the Sponsor
and any Related Party may only transfer Trust Common Securities to the
Sponsor or a Related Party of the Sponsor; provided that, any such
transfer is subject to the condition precedent that the transferor
obtain the written opinion of nationally recognized independent counsel
experienced in such matters that such transfer would not cause more
than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as an association or a publicly traded
partnership taxable as a corporation; and
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(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
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.
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 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 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
Clearing 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 Certifi-
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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 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;
(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 agreements 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
Distributions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the 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.
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SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services 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:
(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 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
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(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 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, responsible or
accountable in damages or otherwise to the Trust or
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any Covered Person for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's 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 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
liabilities 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,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The 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, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of
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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 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 authorized in the specific
case upon a determination that indemnification of the Company
Indemnified Person is proper in the circumstances because he
has met the
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applicable standard of conduct set forth in paragraphs (i) and
(ii). Such determination shall be made (1) by the Regular
Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested Regular Trustees
so directs, by independent legal counsel in a written opinion,
or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the 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 determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately
breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 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
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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
obligations then existing.
(vii) The Note Issuer or the Trust may purchase
and maintain insurance on behalf of any person who is or was a
Company Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the 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 serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a person.
(b) The 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
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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 acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligation to indemnify as
set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration.
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, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
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
investment 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.
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SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees;
(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 prepared 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 required 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 required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees;
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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 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 Declaration 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, powers,
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 Delaware Trustee, the
Delaware Trustee;
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(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 amendment,
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 amendment
which affects the rights, powers, duties, obligations 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 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 affect
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;
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(d) Section 10.1(b) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Common
Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any
other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 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, preferences 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 Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of
this Declaration, the terms of the Securities or the rules of any
stock
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exchange on which the Preferred Securities are listed or ad- mitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders 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 Securities 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 specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(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 necessary 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 Holder 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, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid
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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 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
purpose 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 establishment of a
record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such
right to vote.
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;
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(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, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this 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 perform 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 Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or
at law).
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(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this
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 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):
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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
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
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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 application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts; 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.
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
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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 provisions 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 below):
1. Designation and Number.
(a) Preferred Securities. __________ Preferred Securities 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 $25 per preferred security, are hereby designated for the
purposes of identification only as "Trust Originated Preferred SecuritiesSM
('TOPrS'SM)" (the "Preferred Securities"). The Preferred Security Certificates
evidencing the Preferred Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange on which the Preferred Securities
are listed.
(b) Common Securities. ________ 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 $25 per common security, are hereby designated for the purposes
of identification only as "Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
(c) Additional Securities. The Trust shall be authorized to
issue up to an additional __________ Preferred Securities and __________ Common
Securities to comply with
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the Option. At the time of issuance of Additional Securities, the Trust and the
Sponsor shall execute an Annex I-A in the form attached hereto.
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
$25 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 30-day month.
(b) Distributions on the Securities will be cumulative, will
accrue from December __, 1996, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
_______, 199_, 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 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 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
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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 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 regulations 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 relevant 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 regular 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 Business
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 succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(d) 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 dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or
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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 $25 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), 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 Securities, 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 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 Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
The Securities are subject to redemption at any time after December __,
2001 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 December __, 2001 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
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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.
In the event of a Tax Event prior to December __, 2001, (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 announced 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
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<PAGE>
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" 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 representing Securities, except for
certificates representing Preferred 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 Distributions 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 outstanding
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
distribution of the Notes.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of, or notice of distribution 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 exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or exchange thereof which,
in the case of a redemption, will be the date fixed for redemption
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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 Securities 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 Preferred 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 Holders 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
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deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of
the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. 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 Securities 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 redemption 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 respect 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 (including,
without limitation, United States federal securities 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.
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(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 proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property 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 conducting
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 Note Issuer fails to pay interest or principal on the Notes (a
"Nonpayment") on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), and such Nonpayment is
continuing, a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest on the
Notes having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder (a "Direct Action") after the respective due
date specified in the Notes. In connection with
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such Direct Action, the rights of the holders of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Note Issuer to such Holder of Preferred Securities in
such Direct Action.
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 Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, 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 (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 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 entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 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-
I-10
<PAGE>
ties has been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of 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 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 direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the 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
conducting 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, to the extent permitted by applicable law, 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.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, 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
I-11
<PAGE>
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 Securities
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, affected thereby,
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 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 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
I-12
<PAGE>
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 continuing the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
I-13
<PAGE>
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>
ANNEX I-A
ADDITIONAL SECURITIES
NB CAPITAL TRUST I
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust dated as of November __, 1996, NB Capital Trust I has approved and issued
(i) _______________ Preferred Securities with an aggregate liquidation amount of
$_____________________; and (ii) ___________________ Common Securities with an
aggregate liquidation amount of
$------------------.
Pursuant to the exercise of an Option granted in the Underwriting
Agreement, the Trust is, upon execution of this Annex I-A, issuing Additional
Securities in the amounts and with the liquidation amounts as follows:
(i) Preferred Securities with an aggregate liquidation amount
of $________________; and
(ii) Common Securities with an aggregate liquidation amount of
$________________.
Following the date of this Annex I-A, the terms "Preferred Securities"
and "Common Securities" as used in the Declaration shall mean the aggregate of
the Securities as originally issued and any Additional Securities issued by the
Trust through the date hereof.
Date:____________________, 1996
NB CAPITAL TRUST I
By:_____________________________
Regular Trustee
By:_____________________________
Regular Trustee
NATIONSBANK CORPORATION, as Sponsor
By:_____________________________
________________________(Title)
I-A-1
<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 BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) 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 $25 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 representing undivided beneficial interests in the
assets of the Trust designated the ____% Trust Originated Preferred SecuritiesSM
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust 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 certificate
this ___ day of December, 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 $25 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 30-day month.
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_, the
person in whose name their Preferred Security is registered at the close of
business on the regular record date for such installment, which shall be the
close of business on the business day next preceding such payment date. [IF
PURSUANT TO THE TERMS OF THE DECLARATION, THE SECURITIES ARE NO LONGER
REPRESENTED BY A GLOBAL SECURITY --which shall be the close of business on March
15, June 15, September 15 or December 15,] 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 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 Exten sion
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.
A1-3
<PAGE>
THE PREFERRED SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN
THE DECLARATION.
A1-4
<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.
A1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) 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 $25 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 designated 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 transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust 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
A2-1
<PAGE>
time. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration 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 December, 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 $25 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 distributions 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 month.
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 arrears, 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 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 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 Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity date 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.
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 participation 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
<TABLE>
<CAPTION>
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C>
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................................................................ 9
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...............................................10
SECTION 2.6 Events of Default; Waiver......................................................................10
SECTION 2.7 Event of Default; Nonpayment Notice............................................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name...........................................................................................12
SECTION 3.2 Office...................................................................................... 13
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................................................... 14
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...................................... 25
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
SECTION 4.3 Covenants of The Sponsor.......................................................................29
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............................................ 32
SECTION 5.8 Vacancies among Trustees.......................................................................34
SECTION 5.9 Effect of Vacancies............................................................................34
SECTION 5.10 Meetings.................................................................................... 34
SECTION 5.11 Delegation of Power............................................................................35
Section 5.12 Merger, Conversion, Consolidation or Succession to Business................................. 35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................................................... 35
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........................................................................ 37
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities...................................................................... 38
SECTION 9.2 Transfer of Certificates.......................................................................39
SECTION 9.3 Deemed Security Holders..................................................................... 39
SECTION 9.4 Book-Entry Interests...........................................................................40
SECTION 9.5 Notices to Clearing Agency.................................................................. 40
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................................................................................... 42
SECTION 10.2 Exculpation....................................................................................43
SECTION 10.3 Fiduciary Duty.............................................................................. 43
SECTION 10.4 Indemnification............................................................................. 44
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.................................................................................. 50
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.......................................... 55
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.................................................................... 58
iii
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Page
ANNEX I TERMS OF SECURITIES..................................................................I-1
ANNEX I-A ADDITIONAL SECURITIES..............................................................I-A-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE............................................. A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................................................ A2-1
</TABLE>
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 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary 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.
"Additional Securities" means any Preferred Securities
purchased by the Underwriters in connection with any Option contained in the
Underwriting Agreement and any additional Common Securities purchased by the
Sponsor in connection with the exercise of such option.
"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.
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"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 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" and any "Option
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.
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<PAGE>
"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 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.
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<PAGE>
"Indenture" means the Indenture and First Supplemental
Indenture, each dated as of November __, 1996, among the Note Issuer and the
Note Trustee, and any indenture supplemental thereto pursuant to which the Notes
are to be issued.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"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.
"Nonpayment" has the meaning set forth in Section 2.7.
"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
5
<PAGE>
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 Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the 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.
"Option" means the option to purchase Additional Securities
granted under the terms of the Underwriting Agreement.
"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).
6
<PAGE>
"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.
"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 Section
2.6(a)(ii).
7
<PAGE>
"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.
"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 among the Sponsor, the Trust and
the Underwriters named therein.
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.
8
<PAGE>
(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) 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 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
9
<PAGE>
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 Indenture 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 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
10
<PAGE>
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:
(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 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 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
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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.
SECTION 2.7 Event of Default; Nonpayment Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default or nonpayment of principal, premium,
if any, or interest, when due, on the notes ("Nonpayments") transmit by
mail, first class postage prepaid, to the Holders of the Securities,
notices of all Events of Default or Nonpayments with respect to the
Securities actually known to a Responsible Officer of the Property
Trustee, unless such Events of Default or Nonpayments have been cured
before the giving of such notice ;
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) An Event of Default under Section 5.01 of the
Indenture or a Nonpayment; or
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<PAGE>
(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.
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
13
<PAGE>
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 Securi-
ties, and the issuance of Securities shall be limited to a simultaneous
issuance of both Preferred Securities and Common 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
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<PAGE>
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 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;
15
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(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 incidental 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 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
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(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.
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
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(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.
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. Any accrued Distributions paid by the purchaser of any
Additional Securities shall be deposited in the Property
Trustee Account. Funds in the Property Trustee Account shall
be held uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an
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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 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 duties and
obligations under this Declaration or the Trust Indenture Act;
provided however, that if a Nonpayment has occurred and is
continuing, a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such
Holder of the principal of or interest on the Notes having a
principal amount equal to the aggregate liquidation amount of
the Preferred Securities of such Holder (a "Direct Action")
after the respective due date specified in the Notes. In
connection with such Direct Action, the rights of the Holders
of the Common Securities will be subrogated to the rights of
such Holder of Preferred Securities to the extent of any
payment made by the Note Issuer to such Holder of Preferred
Securities in such Direct Action.
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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, 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.
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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 obligations 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;
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(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 Trusteeunder 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, safekeeping and physical pres ervation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and 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, 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
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(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) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, 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
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faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the 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;
(v) 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 jurisdiction;
(vi)the Property Trustee shall be under no ob
ligation 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 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;
(vii) 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
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such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) 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;
(ix) 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;
(x) 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 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 instructions are
received, and (iii) shall be protected in conclusively relying
on or acting in or accordance with such instructions;
(xi)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
(xii) 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.
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(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 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 __________ __, 199_.
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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 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 Securi-
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ties (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 identical
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 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.
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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 Commission 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 application to the
New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(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.
SECTION 4.3 Covenants of the Sponsor.
For so long as the Preferred Securities remain outstanding,
the Company will covenant (i) to maintain 100%
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Direct or indirect ownership of the Common Securities, (ii) to use its
reasonable best efforts to cause the Trust (a) to remain a statutory business
trust, except as permitted by this Declaration in connection with the Trust's
liquidation, merger, or consolidation, and (b) to not be classified as an
association taxable as a corporation or a publicly traded partnership taxable as
a corporation for United States federal income tax purposes and (iii) to use its
reasonable best efforts to cause each Holder of Trust Securities to be treated
as owning an undivided beneficial ownership interest in the Preferred
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 Securities, 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.
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
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(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).
(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.
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(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.
As of 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
(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.
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SECTION 5.6 Appointment of Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or
removed without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor; and
(ii) 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:
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(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
(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-
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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, bankruptcy,
dissolution, liquidation, incompetence or incapacity to 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,
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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 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.
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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 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.
Additional Securities issued in connection with the exercise of the
Option shall be included in the classes of Preferred and Common
Securities hereunder.
(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
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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 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 New York, 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;
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(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 of the
Notes endorsed thereon shall have been distributed 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) Subject to this Article IX and section 4.3, the Sponsor
and any Related Party may only transfer Trust Common Securities to the
Sponsor or a Related Party of the Sponsor; provided that, any such
transfer is subject to the condition
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Precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) The Trust would not be classified for United States
federal income tax purposes as an association or a publicly traded
partnership taxable as a corporation; and
(ii) The Trust would be an investment company or the
transferee would become an Investment Company.
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.
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
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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 Clearing 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;
(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 agreements 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
Distributions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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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 services 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:
(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.
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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 Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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 Declaration, 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.
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(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, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such 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 Person'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 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
liabilities of such Indemnified Person.
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(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 accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or provided by
the Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the Indem-
nified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The 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, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against
expenses
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(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 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
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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 authorized in the specific
case upon a determination that indemnification of the Company
Indemnified Person is proper in the circumstances because he
has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the 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 determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the
Regular Trustees, independent legal
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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 obligations then existing.
(vii) The Note Issuer or the Trust may purchase
and maintain insurance on behalf of any person who is or was a
Company Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the 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 serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall
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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 acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligation to indemnify as
set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration.
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, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
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
investment 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.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees;
(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 prepared 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 required 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 prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required
by United States federal income tax law, and any other annual income
tax returns required to be filed by the Regular Trustees on behalf of
the Trust with any state or local taxing authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited 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 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 Declaration 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);
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(ii) if the amendment affects the rights, powers,
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 Delaware Trustee,
the Delaware Trustee;
(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the 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 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 amendment
would be to:
(A) cause the trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect
the powers of the 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;
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(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 10.1(B) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Common
Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any
other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 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, preferences 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.
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(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of
this Declaration, the terms of the Securities or the rules of any
stock exchange on which the Preferred Securities are listed or ad-
mitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least
10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders 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 Securities 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 specified shall be counted for purposes of
determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(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 necessary 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 Holder for the purpose of
taking any action without a meeting shall be returned to the
Trust within the time specified by the Regular Trustees;
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(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, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the
Holder 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 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
purpose 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 establishment of a
record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such
right to vote.
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:
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(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, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this 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 perform 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 Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, morato-
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rium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this
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 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 Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
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(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
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
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.
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SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts; 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.
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
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----------------------------------
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 Securities 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 Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred Securi-
ties 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 liquidation 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 evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
(c) Additional Securities. The Trust shall be authorized to
issue up to an additional __________ Preferred Securities and __________ Common
Securities to comply with the
I-1
<PAGE>
Option. At the time of issuance of Additional Securities, the Trust and the
Sponsor shall execute an Annex I-A in the form attached hereto.
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 distributions 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 month.
(b) Distributions on the Securities will be cumulative, will
accrue from __________ __, 199_, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
_______, 199_, 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
I-2
<PAGE>
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 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 regulations 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 Prospec tus dated __________ __,
199_ (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 relevant 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 regular 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 Business
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 dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or
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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 the date of payment (such amount being the "Liquidation
Distribution"), 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 Securities, 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 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 Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
The Securities are subject to redemption at any time after __________
__, ____ 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 __________ __, ____ 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
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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.
In the event of a Tax Event prior to __________ __, ____, (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 announced 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
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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" 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 representing Securities, except for
certificates representing Preferred 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 Distributions 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 outstanding
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
distribution of the Notes.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of, or notice of distribution 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 exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or exchange thereof which,
in the case of a redemption, will be the date fixed for redemption
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<PAGE>
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 Securities 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 Preferred 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 instructions and authority to
pay the Redemption Price to the Holders 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
I-7
<PAGE>
deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of
the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. 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 Securities 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 redemption 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 respect 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 (including,
without limitation, United States federal securities 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.
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(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 proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property 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 conducting
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 Note Issuer fails to pay interest or principal on the Notes (a
"Nonpayment") on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), and such Nonpayment is
continuing, a holder of preferred securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest on the
Notes having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder (a "Direct Action") after the respective due
date specified in the Notes. In connection with
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such Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Note Issuer to such Holder of Preferred Securities in
such Direct Action.
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 Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, 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 (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 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.
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-
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<PAGE>
ties has been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of 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 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 direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the 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
conducting 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, to the extent permitted by applicable law, 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.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, 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
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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 Securities
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, affected thereby,
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 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 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
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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, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
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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
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ANNEX I-A
ADDITIONAL SECURITIES
NB CAPITAL TRUST II
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust dated as of __________ __, 199_, NB Capital Trust II has approved and
issued (i) _______________ Preferred Securities with an aggregate liquidation
amount of $_____________________; and (ii) ___________________ Common Securities
with an aggregate liquidation amount of
$____________.
Pursuant to the exercise of an Option granted in the Underwriting
Agreement, the Trust is, upon execution of this Annex I-A, issuing Additional
Securities in the amounts and with the liquidation amounts as follows:
(i) _____________________ Preferred Securities with an aggregate
liquidation amount of $________________; and
(ii) _____________________ Common Securities with an aggregate
liquidation amount of $________________.
Following the date of this Annex I-A, the terms "Preferred Securities"
and "Common Securities" as used in the Declaration shall mean the aggregate of
the Securities as originally issued and any Additional Securities issued by the
Trust through the date hereof.
Date:____________________, 199_
NB CAPITAL TRUST II
By:_____________________________
Regular Trustee
By:_____________________________
Regular Trustee
NATIONSBANK CORPORATION, as Sponsor
By:_____________________________
________________________(Title)
I-A-1
<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 BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) 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 representing 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 "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declara tion. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is enti tled 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 certificate
this ___ day of __________, 199_.
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 30-day month.
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 arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ________, 199_, the
person in whose name their Preferred Security is registered at the close of
business on the regular record date for such installment, which shall be the
close of business on the business day next preceding such payment date. [IF
PURSUANT TO THE TERMS OF THE DECLARATION, THE SECURITIES ARE NO LONGER
REPRESENTED BY A GLOBAL SECURITY --which shall be the close of business on march
15, june 15, september 15 or december 15,] 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 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 Exten sion
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 Exten sion Period, subject to the above requirements.
A1-3
<PAGE>
THE PREFERRED SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN
THE DECLARATION.
A1-4
<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.
A1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) 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 designated the Trust Originated Common Securities
(liquidation amount $__ 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, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of __________ __, 199_, as the same may be amended from time to time
(the "Declaration"), in cluding 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
A2-1
<PAGE>
Declaration permits the Sponsor to dissolve the Trust at any time. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration 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 __________, 199_.
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 distributions 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 month.
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 arrears, 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 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 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 Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity date 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.
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 participation 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
<TABLE>
<CAPTION>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Page
<S> <C> <C>
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................................................................ 9
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................................................10
SECTION 2.6 Events of Default; Waiver.......................................................................10
SECTION 2.7 Event of Default; Nonpayment Notice.............................................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 Name...........................................................................................12
SECTION 3.2 Office...................................................................................... 13
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................................................... 14
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...................................... 25
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
SECTION 4.3 Covenants of the Sponsor.......................................................................29
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............................................ 32
SECTION 5.8 Vacancies among Trustees.......................................................................34
SECTION 5.9 Effect of Vacancies............................................................................34
SECTION 5.10 Meetings.................................................................................... 34
SECTION 5.11 Delegation of Power............................................................................35
Section 5.12 Merger, Conversion, Consolidation or Succession to Business................................. 35
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions............................................................................... 35
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........................................................................ 37
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities...................................................................... 38
SECTION 9.2 Transfer of Certificates.......................................................................39
SECTION 9.3 Deemed Security Holders..................................................................... 39
SECTION 9.4 Book-Entry Interests...........................................................................40
SECTION 9.5 Notices to Clearing Agency.................................................................. 40
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>
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Page
SECTION 10.1 Liability................................................................................... 42
SECTION 10.2 Exculpation....................................................................................43
SECTION 10.3 Fiduciary Duty.............................................................................. 43
SECTION 10.4 Indemnification............................................................................. 44
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.................................................................................. 50
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.......................................... 55
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.................................................................... 58
iii
<PAGE>
Page
ANNEX I TERMS OF SECURITIES..................................................................I-1
ANNEX I-A ADDITIONAL SECURITIES..............................................................I-A-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE............................................. A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................................................ A2-1
</TABLE>
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 Business Trust Act pursuant
to a Declaration of Trust dated as of October 29, 1996 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary 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.
"Additional Securities" means any Preferred Securities
purchased by the Underwriters in connection with any Option contained in the
Underwriting Agreement and any additional Common Securities purchased by the
Sponsor in connection with the exercise of such Option.
"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.
2
<PAGE>
"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 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" and any "Option
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.
3
<PAGE>
"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 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.
4
<PAGE>
"Indenture" means the Indenture and First Supplemental
Indenture, each dated as of November __, 1996, among the Note Issuer and the
Note Trustee, and any indenture supplemental thereto pursuant to which the Notes
are to be issued.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"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 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.
"Nonpayment" has the meaning set forth in Section 2.7.
"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
5
<PAGE>
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 Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the 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.
"Option" means the option to purchase Additional Securities
granted under the terms of the Underwriting Agreement.
"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).
6
<PAGE>
"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.
"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 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.
"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 Section
2.6(a)(ii).
7
<PAGE>
"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 redemp tion, 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.
"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 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 Agreement for the
offering and sale of Preferred Securities among the Sponsor, the Trust and the
Underwriters named therein.
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.
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(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) 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
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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 Indenture 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 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
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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:
(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
Majority 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 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 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
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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.
SECTION 2.7 Event of Default; Nonpayment Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default or Nonpayment of principal, premium,
if any, or interest, when due, on the Notes ("Nonpayments") transmit by
mail, first class postage prepaid, to the Holders of the Securities,
notices of all Events of Default or Nonpayments with respect to the
Securities actually known to a Responsible Officer of the Property
Trustee, unless such Events of Default or Nonpayments have been cured
before the giving of such notice ;
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) an Event of Default under Section 5.01 of the
Indenture or a Nonpayment; or
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(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 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.
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
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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 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
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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 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;
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(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 incidental 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 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
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(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.
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
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(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.
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. Any accrued Distributions paid by the purchaser of any
Additional Securities shall be deposited in the Property
Trustee Account. Funds in the Property Trustee Account shall
be held uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an
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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 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; provided however, that if a Nonpayment has
occurred and is continuing, a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on
the Notes having a principal amount equal to the aggregate liquidation amount of
the Preferred Securities of such Holder (a "Direct Action") after the respective
due date specified in the Notes. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of Preferred Securities to the extent of any payment made by the
Note Issuer to such Holder of Preferred Securities in such Direct Action.
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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, 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.
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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 obligations 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;
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(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 Trusteeunder this Declaration;
(iv) no provision of this Declaration shall require
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, safekeeping and physical pres ervation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and 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, 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
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(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under
this Declaration, nor shall the 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) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, 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
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faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the 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;
(v) 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;
(vi) 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 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;
(vii) 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
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such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) 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;
(ix) 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;
(x) 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 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;
(xi)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
(xii) 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.
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(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 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 __________ __, 199_.
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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 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 Securi-
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ties (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 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.
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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 Commission 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 application to the
New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;
(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.
SECTION 4.3 Covenants of the Sponsor.
For so long as the Preferred Securities remain outstanding,
the Company will covenant (i) to maintain 100%
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direct or indirect ownership of the Common Securities, (ii) to use its
reasonable best efforts to cause the Trust (a) to remain a statutory business
trust, except as permitted by this Declaration in connection with the Trust's
liquidation, merger, or consolidation, and (b) to not be classified as an
association taxable as a corporation or a publicly traded partnership taxable as
a corporation for United States federal income tax purposes and (iii) to use its
reasonable best efforts to cause each Holder of Trust Securities to be treated
as owning an undivided beneficial ownership interest in the Preferred
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 Securities, 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.
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
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(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).
(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.
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(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.
As of 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
(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.
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SECTION 5.6 Appointment of Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
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 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:
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(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
(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-
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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, bankruptcy,
dissolution, liquidation, incompetence or incapacity to 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,
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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 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.
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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 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.
Additional Securities issued in connection with the exercise of the
Option shall be included in the classes of Preferred and Common
Securities hereunder.
(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
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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 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 New York, 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
dissolution 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;
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(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 of the
Notes endorsed thereon shall have been distributed 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) Subject to this Article IX and Section 4.3, the Sponsor
and any Related Party may only transfer Trust Common Securities to the
Sponsor or a Related Party of the Sponsor;
provided that, any such transfer is subject to the condition
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precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as an association or a publicly traded
partnership taxable as a corporation; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
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.
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
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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 Clearing 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;
(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 agreements 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
Distributions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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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 services 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:
(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.
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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 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 Declaration, 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.
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(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, responsible or
accountable in damages or otherwise to the Trust or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's 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 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
liabilities of such Indemnified Person.
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(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 accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or provided by
the Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the Indem-
nified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The 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, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against
expenses
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(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 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
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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 authorized in the specific
case upon a determination that indemnification of the Company
Indemnified Person is proper in the circumstances because he
has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the 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 determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the
Regular Trustees, independent legal
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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 obligations then existing.
(vii) The Note Issuer or the Trust may purchase
and maintain insurance on behalf of any person who is or was a
Company Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the 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 serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall
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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 acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligation to indemnify as
set forth in this Section 10.4(b) shall survive the satisfaction and
discharge of this Declaration.
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, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
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
investment 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.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees;
(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 prepared 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 required 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 required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited 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 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 Declaration 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);
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(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 Delaware 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 amendment,
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 amendment
which affects the rights, powers, duties, obligations 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 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 affect
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;
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(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 10.1(b) 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 Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any
other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 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, preferences 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.
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(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of
this 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 meeting of the
Holders of such class if directed to do so by the Holders of at least
10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders 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 Securities 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 specified shall be counted for purposes of
determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(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 necessary 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 Holder for the purpose of
taking any action without a meeting shall be returned to the
Trust within the time specified by the Regular Trustees;
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(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, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the
Holder 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 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 establishment of a
record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such
right to vote.
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:
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(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, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this 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 perform 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 Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, morato-
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rium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this
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 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 Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
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(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
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
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.
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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 application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts; 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.
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
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----------------------------------
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 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 Securities 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 Preferred Security Certificates
evidencing the Preferred Securities shall be substantially in the form of
Exhibit A-1 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange on which the Preferred Securi ties
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 liquidation 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 evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
(c) Additional Securities. The Trust shall be authorized to
issue up to an additional __________ Preferred Securities and __________ Common
Securities to comply with the
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Option. At the time of issuance of Additional Securities, the Trust and the
Sponsor shall execute an Annex I-A in the form attached hereto.
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 distributions 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 month.
(b) Distributions on the Securities will be cumulative, will
accrue from __________ __, 199_, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
_______, 199_, 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 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 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
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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 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 Sponsor, 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 Securities shall
not continue to remain in book-entry only form, the regular 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 Business
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 dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or
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<PAGE>
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 the date of payment (such amount being the "Liquidation
Distribution"), 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 Securities, 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 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 Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
The Securities are subject to redemption at any time after __________
__, ____ 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 __________ __, ____ 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
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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.
In the event of a Tax Event prior to __________ __, ____, (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 announced 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
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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"
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 representing Securities, except for
certificates representing Preferred 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 Distributions 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 outstanding
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
distribution of the Notes.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of, or notice of distribution 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 exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or exchange thereof which,
in the case of a redemption, will be the date fixed for redemption
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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/Distribution
Notice shall be addressed to the Holders of Securities 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 Preferred 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 instructions and authority to
pay the Redemption Price to the Holders 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
Redemption/Distribution Notice shall have been given and funds
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deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the
transfer of any Securities that have been so called for redemption. If
any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities 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 redemption 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 respect 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 (including,
without limitation, United States federal securities 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.
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(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 proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property 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 conducting
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 Note Issuer fails to pay interest or principal on the Notes (a
"Nonpayment") on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), and such Nonpayment is
continuing, a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest on the
Notes having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder (a "Direct Action") after the respective due
date specified in the Notes. In connection with
I-9
<PAGE>
such Direct Action, the rights of the holders of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Note Issuer to such Holder of Preferred Securities in
such Direct Action.
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 Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, 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 (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 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 entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c), 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-
I-10
<PAGE>
ties has been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of 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 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 direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the 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
conducting 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, to the extent permitted by applicable law, 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.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, 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
I-11
<PAGE>
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 Securities
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, affected thereby,
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 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 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
I-12
<PAGE>
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
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder 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, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
I-13
<PAGE>
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>
ANNEX I-A
ADDITIONAL SECURITIES
NB CAPITAL TRUST III
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust dated as of __________ __, 199_, NB Capital Trust III has approved and
issued (i) _______________ Preferred Securities with an aggregate liquidation
amount of $_____________________; and (ii) ___________________ Common Securities
with an aggregate liquidation amount of
$------------------.
Pursuant to the exercise of an Option granted in the Underwriting
Agreement, the Trust is, upon execution of this Annex I-A, issuing Additional
Securities in the amounts and with the liquidation amounts as follows:
(i) _____________________ Preferred Securities with an aggregate
liquidation amount of $________________; and
(ii) _____________________ Common Securities with an aggregate
liquidation amount of $________________.
Following the date of this Annex I-A, the terms "Preferred Securities"
and "Common Securities" as used in the Declaration shall mean the aggregate of
the Securities as originally issued and any Additional Securities issued by the
Trust through the date hereof.
Date:____________________, 199_
NB CAPITAL TRUST III
By:_____________________________
Regular Trustee
By:_____________________________
Regular Trustee
NATIONSBANK CORPORATION, as Sponsor
By:_____________________________
________________________(Title)
I-A-1
<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 BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) 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 representing 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 "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declara tion. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is enti tled 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 certificate
this ___ day of __________, 199_.
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 distributions 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 month.
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 arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on ________, 199_, the
person in whose name their Preferred Security is registered at the close of
business on the regular record date for such installment, which shall be the
close of business on the business day next preceding such payment date. [IF
PURSUANT TO THE TERMS OF THE DECLARATION, THE SECURITIES ARE NO LONGER
REPRESENTED BY A GLOBAL SECURITY --which shall be the close of business on
March 15, June 15, September 15 or December 15,] 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 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 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.
A1-3
<PAGE>
THE PREFERRED SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN
THE DECLARATION.
A1-4
<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.
A1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) 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 designated the Trust Originated Common Securities
(liquidation amount $__ per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, 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"), in cluding 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
A2-1
<PAGE>
Declaration permits the Sponsor to dissolve the
Trust at any
time. The Sponsor will provide a copy of the Declaration, the Common Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration 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 __________, 199_.
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 distributions 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 month.
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 arrears, 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 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 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 Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity date 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 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 participation 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
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A2-4
<PAGE>
EXHIBIT 4.10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NATIONSBANK CORPORATION
------------------------------
------------------------------
INDENTURE
Dated as of November 27, 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 27, 1996 between NationsBank Corporation and The Bank of New York, as
Trustee:
ACT SECTION INDENTURE SECTION
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
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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
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Principal Office of the Trustee............................................................................6
Property Trustee...........................................................................................6
Responsible Officer........................................................................................7
Security ................................................................................................7
Securities ................................................................................................7
Securityholder.............................................................................................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...................................................13
SECTION 2.06. Execution of Securities...............................................................15
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........................................22
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office...........................23
SECTION 3.04. Provision as to Paying Agent.................................................23
SECTION 3.05. Certificate to Trustee.......................................................24
SECTION 3.06. Compliance with Consolidation Provisions.....................................24
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
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ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.......................................................26
SECTION 4.02. Preservation and Disclosure of Lists.........................................27
SECTION 4.03. Reports by Company...........................................................28
SECTION 4.04. Reports by the Trustee.......................................................29
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
SECTION 5.01. Events of Default............................................................29
SECTION 5.02. Payment of Securities on Default; Suit Therefor..............................32
SECTION 5.03. Application of Moneys Collected by
Trustee......................................................................34
SECTION 5.04. Proceedings by Securityholders...............................................35
SECTION 5.05. Proceedings by Trustee.......................................................36
SECTION 5.06. Remedies Cumulative and Continuing...........................................36
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority of Securityholders37
SECTION 5.08. Notice of Defaults and Nonpayments...........................................38
SECTION 5.09. Undertaking to Pay Costs.....................................................38
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.......................................39
SECTION 6.02. Reliance on Documents, Opinions, etc.........................................40
SECTION 6.03. No Responsibility for Recitals, etc..........................................42
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own
Securities...................................................................42
SECTION 6.05. Moneys to be Held in Trust...................................................42
SECTION 6.06. Compensation and Expenses of Trustee.........................................42
SECTION 6.07. Officers' Certificate as Evidence............................................43
SECTION 6.08. Conflicting Interest of Trustee..............................................44
SECTION 6.09. Eligibility of Trustee.......................................................44
SECTION 6.10. Resignation or Removal of Trustee............................................44
SECTION 6.11. Acceptance by Successor Trustee..............................................46
SECTION 6.12. Succession by Merger, etc....................................................47
SECTION 6.13. Limitation on Rights of Trustee as a
Creditor.....................................................................48
SECTION 6.14. Authenticating Agents........................................................48
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ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders....................................................49
SECTION 7.02. Proof of Execution by Securityholders........................................50
SECTION 7.03. Who Are Deemed Absolute Owners...............................................50
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding...........................51
SECTION 7.05. Revocation of Consents; Future Holders
Bound........................................................................51
ARTICLE EIGHT
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.........................................................52
SECTION 8.02. Call of Meetings by Trustee..................................................52
SECTION 8.03. Call of Meetings by Company or Securityholders...............................52
SECTION 8.04. Qualifications for Voting....................................................53
SECTION 8.05. Regulations..................................................................53
SECTION 8.06. Voting.......................................................................54
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of Securityholders...................54
SECTION 9.02. Supplemental Indentures with Consent of Securityholders......................56
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures.......58
SECTION 9.04. Notation on Securities.......................................................58
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be Furnished Trustee.....59
ARTICLE TEN
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms..............................59
SECTION 10.02. Successor Corporation to be Substituted for Company..........................59
SECTION 10.03. Opinion of Counsel to be Given Trustee.......................................60
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ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.......................................................60
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to be Held in Trust by
Trustee......................................................................61
SECTION 11.03. Paying Agent to Repay Moneys Held............................................61
SECTION 11.04. Return of Unclaimed Moneys...................................................62
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government Obligations.............62
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligations........................64
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors...................................................................64
SECTION 13.02. Official Acts by Successor Corporation.......................................65
SECTION 13.03. Surrender of Company Powers..................................................65
SECTION 13.04. Addresses for Notices, etc...................................................65
SECTION 13.05. Governing Law................................................................65
SECTION 13.06. Evidence of Compliance with Conditions Precedent.............................65
SECTION 13.07. Legal Holidays...............................................................66
SECTION 13.08. Trust Indenture Act to Control...............................................66
SECTION 13.09. Table of Contents, Headings, etc.............................................66
SECTION 13.10. Execution in Counterparts....................................................66
SECTION 13.11. Separability.................................................................67
SECTION 13.12. Assignment...................................................................67
SECTION 13.13. Acknowledgment of Rights.....................................................67
ARTICLE FOURTEEN
REDEMPTION OF SECURITIES
SECTION 14.01. Applicability of Article.....................................................67
SECTION 14.02. Notice of Redemption; Selection of
Securities...................................................................68
SECTION 14.03. Payment of Securities Called for
Redemption...................................................................69
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ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.....................................................69
SECTION 15.02. Default on Senior Obligations................................................70
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.........................................70
SECTION 15.04. Subrogation..................................................................72
SECTION 15.05. Trustee to Effectuate Subordination..........................................73
SECTION 15.06. Notice by the Company........................................................73
SECTION 15.07. Rights of the Trustee; Holders of Senior Obligations.........................74
SECTION 15.08. Subordination May Not Be Impaired............................................75
Testimonium......................................................................................................77
Signatures.......................................................................................................77
Acknowledgments..................................................................................................78
</TABLE>
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THIS INDENTURE, dated as of November 27, 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 subordinated unsecured
debentures, notes or other evidence of indebtedness 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 otherwise 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
<PAGE>
accounting principles as are generally accepted at the time of 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 subdivision.
"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 partnership 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 specified 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 designated 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.
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<PAGE>
"Common Securities" shall mean undivided beneficial
interests in the assets of a NB Trust which rank pari passu with 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 distributions 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 distribution 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.
3
<PAGE>
"Deferred Interest" shall have the meaning set forth in
Section 2.13.
"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 business trust or any other
similar trust created for the purpose of
4
<PAGE>
issuing Preferred Securities in connection with the issuance of Securities under
this Indenture.
"Nonpayment" shall have the meaning set forth in
Section 5.08.
"Officers' Certificate" shall mean a certificate signed by the
Chief Executive Officer, the President or any Vice President, by the Treasurer,
an Assistant Treasurer or Associate General Counsel and delivered to the
Trustee. Each such certificate 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 segregated 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
5
<PAGE>
Article Fourteen or provision satisfactory to the
Trustee shall have been made for giving such notice;
and
(c) Securities paid pursuant to Section 2.08 or in lieu
of or in substitution for which other Securities
shall have been authenticated and delivered 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 distributions 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 administered.
6
<PAGE>
"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 committee of the board of directors,
the president, any vice president, any assistant vice president, the cashier,
any assistant cashier, the secretary, any assistant secretary, the treasurer,
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 particularly means any security or
securities, as the case may be, authenticated and delivered under this
Indenture.
"Securityholder", "holder 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 responsible or liable as obligor, guarantor or otherwise; and (vii) all
obligations of the type referred to in clauses (i) through (vi) of
7
<PAGE>
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 terms subordinated to or pari passu with the
Securities, and (2) any indebtedness between or among such obligor and its
Affiliates, 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, partnership 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 preferred
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 partnership, 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 Subsidiaries, 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
equivalent) 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
8
<PAGE>
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
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 depository
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
9
<PAGE>
by the officers executing such Securities, as evidenced by their execution of
such Securities.
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' Certificate 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 authenticated
and delivered under this Indenture (except for
Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or
in lieu of, other Securities of the series pursuant
to Section 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;
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(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, 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 periods
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 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 Securities
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;
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(13) any trustee, authenticating or paying agents, warrant
agents, transfer agents or registrars with respect to
the Securities of such series;
(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 Securities 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:
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(1) a copy of any Board Resolution or Resolutions
relating thereto and, if applicable, an appropriate
record of any action taken pursuant to such
resolution, in each case certified by the Secretary
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
Counsel, will constitute valid and legally
binding 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 authenticate
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.
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SECTION 2.05. Date and Denomination of Securities.
The Securities shall be issuable as registered Securities
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
denominations 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 authentication,
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 3.02.
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 hereinafter 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 exchange 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
authenticated 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 Securities 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 connection 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 authenticate and deliver, a new Security of the
same series bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Security, or in lieu of and in substitution 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 authorization 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 harmless
and, in case of destruction, loss or theft, evidence satisfactory 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 pursuant to
the provisions of this Section 2.08 by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute 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 Securities 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 preclude 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 definitive
registered form without coupons, in authorized 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. 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' Certificate evidencing such determination by the Company, will
authenticate and make available for delivery the Securities of such series in
definitive registered form without coupons, in authorized 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 pursuant 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 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.
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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 series) 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
obligor on 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 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 principal of and premium, if any, or interest,
if any, on the Securities of any series, set aside, segregate 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 interest 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 discharge 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.
(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.
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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 Certificate 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 Provisions.
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 and be continuing any event that would
constitute an Event of Default or Nonpayment, (ii) the Company shall be in
default with respect to its payment of any obligations under the Preferred
Securities Guarantee or Common Securities 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
(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.
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(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 or indirect 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.
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE.
SECTION 4.01. Securityholders' Lists.
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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 series 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 holders of Securities of such series or with holders of
all Securities with respect to their rights under this Indenture or under such
Securities and 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
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(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
applicants, 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 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 respecting
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
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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 derived, 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 required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
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 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 documents 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
compliance 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,
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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 Commission 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
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 applicable
bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or
for any substantial part of its property, 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 consecutive 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 official) 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 generally 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
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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 redemption 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 declaration 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 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 sufficient 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 acceleration (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
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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 rescission 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 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 certified 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;
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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 liabilities 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 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 Securities 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
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(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 and each predecessor Trustee except as a result of negligence or
bad faith.
Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, 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.
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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 collected, 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;
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 principal (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)
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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 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.
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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
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained 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.
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 determine 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 3.07; provided, however, that if
the Securities of such series are held by a NB
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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
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 and Nonpayments.
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 or nonpayment of principal, premium, if any, or interest, when due on the
Securities of such series ("Nonpayments") known to the Trustee, unless such
defaults or Nonpayments 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.
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
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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.
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, undertakes 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
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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
specifically required to be furnished to
the Trustee, the Trustee shall be under a
duty to examine the same to determine
whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer
or Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining 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 conducting 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 resolution,
certificate, statement, instrument, opinion,
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report, notice, request, consent, order, bond, note,
debenture or other paper or document believed by it
to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, 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 specifically
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 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 Indenture; 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 Securities of that series such of the
rights and powers 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
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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 powers
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 misconduct 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
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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 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
premises. 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.
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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 Indenture 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' Certificate 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.
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 Indenture Act.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia or a corporation
or other Person permitted 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
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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.
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 addresses as they shall appear on the Security register. 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, executed under the authority of a Board Resolution,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor 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 resignation to the affected
Securityholders, the resigning 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
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(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 property shall be appointed, or any
public officer shall take charge or control
of the Trustee or of its property or affairs
for the purpose of rehabilitation,
conservation or liquidation, then, in any
such case, 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 successor 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 otherwise 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 become effective upon acceptance of appointment by the successor trustee
as provided in Section 6.11.
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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 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 predecessor
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 acceptance such successor trustee
shall be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.
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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 appointment 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 corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor 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 described 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
therein.
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
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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 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 combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, 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 Authenticating 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 Authenticating Agent with respect to one or more or
all series of Securities by giving written notice of termination to such
Authenticating 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
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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 Authenticating Agent
shall have no responsibility or liability for any action taken by it as such in
accordance with the directions 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, authorization, 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 Outstanding 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
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pursuant to the provisions of this Indenture not later than six months after the
record date.
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 disregarded 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
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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 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 indirectly
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 included 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 notation 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 purposes:
(a) to give any notice to the Company or to the Trustee,
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;
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(b) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article Six;
(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 aggregate
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 New York, 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 resolution 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 requested 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
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Securityholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee 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 permanent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 7.04 and unless otherwise
provided in an indenture supplemental hereto, 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 $25 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 challenged 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 subscribed the signatures of such holders
or of their representatives by proxy and the serial number or numbers of the
Securities held or represented by them. The permanent chairman of the
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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 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 knowledge 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 Company
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
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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;
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 supplemental
indenture which may be defective or inconsistent
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 interests 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, registration or
transfer of Securities issued in whole or in part in
the form of one or more global Securities 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;
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(h) to make any change that does not adversely affect the
rights of any Securityholder in any material
respect; or
(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 certifications
required to be furnished pursuant to the terms of
this Indenture or any series of Securities, 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 Securities at the time outstanding,
notwithstanding any of the provisions 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 thereon, or reduce
the principal amount thereof or any premium thereon, 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
Securities, or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof pursuant to Section 5.01 or the
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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 each Security so affected, or (ii) reduce the aforesaid
percentage 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 Indenture 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.
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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.
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 provided 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 contained 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.
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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), 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 substantially 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 interest 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)
satisfactory 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
Indenture 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
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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
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 evidence 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 redemption 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
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(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. Thereafter, 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
satisfaction of and discharging this Indenture, the Company, however, hereby
agreeing to reimburse the Trustee for any costs or expenses 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
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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.
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 conditions 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 holders of
the Securities of such series (i) money in an amount,
or (ii) U.S. Government Obligations which through the
payment of interest and principal 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), sufficient, in the opinion (with
respect to (ii) and (iii)) of a nationally recognized
firm of independent 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 mandatory 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 Defeasance
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
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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 Securities 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 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 ruling
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;
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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.
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 constitution,
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 agreements 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
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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.
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
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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.
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 Indenture
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 counterparts,
each of which shall be an original, but such counterparts 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 construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.
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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. 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. Notwithstanding the foregoing, if a Nonpayment has
occurred and is continuing, the Company acknowledges that a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the applicable series of
Securities having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder on or after the respective due date
specified in the applicable series of Securities.
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
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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 redemption 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 payment will be made upon presentation and surrender of such
Securities, that interest accrued to the date fixed for redemption 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
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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.
Upon presentation of any Security of any series redeemed 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 Securities of such series of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
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
assignment 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
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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 principal
(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 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 Securities;
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 distribution, 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 representative 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 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
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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 subordinated 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 dissolution 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.
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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 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
holders 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
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making such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purposes of ascertaining the Persons 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.
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 provisions 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 (including, 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 himself 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
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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.
SECTION 15.07. Rights of the Trustee; Holders of Senior
Obligations.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article Fifteen in respect 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 deprive 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
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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 evidencing 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 a Senior Vice President of NationsBank
Corporation, one of the parties described in and which executed the above
instrument; and that he signed his name thereto by authority of the board of
directors of such corporation.
----------------------------
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.
----------------------------
Notary Public
[NOTARIAL SEAL]
78
<PAGE>
Exhibit 4.11
====================================
FIRST SUPPLEMENTAL INDENTURE
between
NATIONSBANK CORPORATION
and
THE BANK OF NEW YORK
Dated as of December __, 1996
=====================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS
<S> <C> <C>
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.........................................................7
SECTION 3.3 No Sinking Fund........................................................................8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period...................................................8
SECTION 4.2 Notice of Extension....................................................................9
Section 4.3 Limitation of Transactions.............................................................9
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses...................................................................10
Section 5.2 Payment Upon Resignation or Removal...................................................10
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1 Listing on an Exchange................................................................11
ARTICLE VII
FORM OF NOTE
SECTION 7.1 Form of Note..........................................................................11
ARTICLE VIII
ORIGINAL ISSUE OF NOTES
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SECTION 8.1 Original Issue of Notes...............................................................18
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture.............................................................19
SECTION 9.2 Trustee Not Responsible for Recitals..................................................19
SECTION 9.3 Governing Law.........................................................................19
SECTION 9.4 Separability..........................................................................19
SECTION 9.5 Counterparts..........................................................................19
</TABLE>
ii
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
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 December __, 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, under the terms of an Underwriting Agreement dated as
of __________, 1996 (the "Underwriting Agreement"), among the Company and NB
Capital Trust I (the "Trust") and the Underwriters named therein (the
"Underwriters"), the Trust has agreed to sell to the Underwriters $__________
aggregate liquidation amount of its __% Trust Originated Preferred Securities
(the "Preferred Securities") and has granted the Underwriters an option to
purchase up to an additional $__________ aggregate liquidation amount of
Preferred Securities (the "Option");
WHEREAS, under the terms of a Subscription Agreement dated as
of __________, 1996 between the Trust and the Company (the "Subscription
Agreement"), the Company has committed to purchase all of the Trust Originated
Common Securities ("Common Securities") from the Trust which Common Securities
represent at least 3% of the capital of the Trust;
WHEREAS, the Trust proposes to invest the proceeds from such
offering, together with the proceeds of the issuance and sale by the Trust to
the Company of Common Securities, in
<PAGE>
Notes, as a result of which the Trust will initially purchase $__________ of
Notes, and may, upon exercise of the Option purchase up to an additional
$__________ of Notes (the "Additional Notes"); 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:
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;
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(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.
"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, as Sponsor, 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 $___________, which amount shall be as set forth
in any written order of the Company for the authentication and delivery of Notes
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pursuant to Section 2.04 of the Indenture as well as in any subsequent or
supplemental written order of the Company upon the exercise of the Option.
SECTION 2.2 Maturity.
The Maturity Date is December __, 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 then 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
(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
4
<PAGE>
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 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
5
<PAGE>
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 December __, 1996 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 regular Interest Payment Date.
(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
6
<PAGE>
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
December __, 2001 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 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 December __, 2001, 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
7
<PAGE>
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 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
8
<PAGE>
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.
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 and be
continuing any Event of Default or Nonpayment, as defined in the Indenture, 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
9
<PAGE>
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, maintenance and
dissolution of the Trust, the offering, sale and issuance of the Trust
Securities (including commissions to the underwriters in connection therewith),
the fees and expenses 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), 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.
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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.
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.
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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 BANK 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. ___________
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 December __, 2026(the "Maturity Date"), and to pay interest on
said principal sum from December __, 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
12
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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 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
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<PAGE>
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.
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:_____________________
[Seal] Title:____________________
Attest:
By: ______________________
Name: _____________________
Title: ____________________
14
<PAGE>
(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 27, 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 December __, 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, 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 December __, 2001 (an "Optional Redemption"), or at any time
15
<PAGE>
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 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
16
<PAGE>
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 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.
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<PAGE>
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 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 $25 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.
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
18
<PAGE>
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.
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;
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<PAGE>
but such counterparts shall together constitute but one and the same instrument.
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:
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EXHIBIT 4.14
<PAGE>
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NB Capital Trust I
Dated as of December __, 1996
====================================
<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..................................... 7
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................................. 8
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........................................................... 15
SECTION 5.4 Rights of Holders.....................................................................16
<PAGE>
SECTION 5.5 Guarantee of Payment............................................................... 16
SECTION 5.6 Subrogation........................................................................ 16
SECTION 5.7 Independent Obligations...............................................................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions......................................................... 17
SECTION 6.2 Ranking............................................................................ 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...........................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation........................................................................ 18
SECTION 8.2 Indemnification.......................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................................. 19
SECTION 9.2 Amendments......................................................................... 19
SECTION 9.3 Notices............................................................................ 19
SECTION 9.4 Benefit............................................................................ 20
SECTION 9.5 Governing Law...................................................................... 20
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of December __, 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 "Original Preferred Securities") and
pursuant to the terms of an Underwriting Agreement dated as of __________, by
and among the Guarantor, as Sponsor, the Issuer and the Underwriters named
therein, the Issuer has agreed to issue up to an additional __________ Preferred
Securities, with an aggregate liquidation amount of $__________ (the "Additional
Preferred Securities") upon the exercise of the option granted thereunder to the
Underwriters;
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
<PAGE>
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) 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.
2
<PAGE>
"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.
"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.
3
<PAGE>
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of November 27, 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.
4
<PAGE>
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, a
New York banking corporation, until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.
"Preferred Securities" means the total number of __% Trust
Originated Preferred Securities issued pursuant to the Declaration, including
the Original Preferred Securities and any
Additional Preferred Securities.
"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
5
<PAGE>
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.
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.
6
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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.
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.
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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 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:
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(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Preferred Guarantee Trustee,
the 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
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or in the exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it 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
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Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall 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.
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(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 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
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(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the 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 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
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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
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.
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SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the 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
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(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.
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.
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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.
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SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall have
occurred and be continuing an Event of Default under this Preferred Securities
Guarantee, an Event of Default or a Nonpayment 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
18
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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 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.
19
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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. 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):
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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 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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</TABLE>
EXHIBIT 4.15
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
NB Capital Trust II
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..................................... 7
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................................. 8
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........................................................... 15
SECTION 5.4 Rights of Holders.....................................................................16
<PAGE>
SECTION 5.5 Guarantee of Payment............................................................... 16
SECTION 5.6 Subrogation........................................................................ 16
SECTION 5.7 Independent Obligations...............................................................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions......................................................... 17
SECTION 6.2 Ranking............................................................................ 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...........................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation........................................................................ 18
SECTION 8.2 Indemnification.......................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................................. 19
SECTION 9.2 Amendments......................................................................... 19
SECTION 9.3 Notices............................................................................ 19
SECTION 9.4 Benefit............................................................................ 20
SECTION 9.5 Governing Law...................................................................... 20
</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
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 "Original Preferred Securities") and
pursuant to the Terms of an Underwriting Agreement dated as of __________, by
and among the Guarantor, as sponsor, the Issuer and the Underwriters named
therein, the Issuer has agreed to issue up to an additional __________ Preferred
Securities, with an aggregate liquidation amount of $__________ (the "Additional
Preferred Securities") upon the exercise of the option granted thereunder to the
Underwriters;
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
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hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) 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.
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"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.
"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.
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"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of November 27, 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 ____ 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.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, a
New York banking corporation, until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.
"Preferred Securities" means the total number of __% Trust
Originated Preferred Securities issued pursuant to the Declaration, including
the Original Preferred Securities and any
Additional Preferred Securities.
"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
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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.
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.
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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.
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.
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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 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:
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(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Preferred Guarantee Trustee,
the 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
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or in the exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it 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
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Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall 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.
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(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 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
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(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the 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 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
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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
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.
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SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the 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
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(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.
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.
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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.
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SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred and be continuing an Event of Default under this
Preferred Securities Guarantee, an Event of Default or a Nonpayment 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
18
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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 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.
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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. 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):
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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 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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EXHIBIT 4.16
<PAGE>
====================================
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..................................... 7
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................................. 8
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........................................................... 15
SECTION 5.4 Rights of Holders.....................................................................16
SECTION 5.5 Guarantee of Payment............................................................... 16
SECTION 5.6 Subrogation........................................................................ 16
SECTION 5.7 Independent Obligations...............................................................17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions......................................................... 17
SECTION 6.2 Ranking............................................................................ 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...........................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation........................................................................ 18
SECTION 8.2 Indemnification.......................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................................. 19
SECTION 9.2 Amendments......................................................................... 19
SECTION 9.3 Notices............................................................................ 19
SECTION 9.4 Benefit............................................................................ 20
SECTION 9.5 Governing Law...................................................................... 20
</TABLE>
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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 "Original Preferred Securities") and
pursuant to the terms of an Underwriting Agreement dated as of __________, by
and among the Guarantor, as Sponsor, the Issuer and the Underwriters named
therein, the Issuer has agreed to issue up to an additional __________ Preferred
Securities, with an aggregate liquidation amount of $__________ (the "Additional
Preferred Securities") upon the exercise of the option granted thereunder to the
Underwriters;
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
<PAGE>
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) 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.
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"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.
"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.
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"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of November 27, 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 ____ 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.
4
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, a
New York banking corporation, until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.
"Preferred Securities" means the total number of __% Trust
Originated Preferred Securities issued pursuant to the Declaration, including
the original preferred securities and any
Additional Preferred Securities.
"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
5
<PAGE>
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.
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.
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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.
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.
7
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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 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:
8
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(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Preferred Guarantee Trustee,
the 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
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or in the exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it 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
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Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(vi) shall 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.
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(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 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
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(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the 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 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
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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
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.
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SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment period
on the 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
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(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.
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.
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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.
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SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall have
occurred and be continuing an Event of Default under this Preferred Securities
Guarantee, an Event of Default or a Nonpayment 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
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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 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.
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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. 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):
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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 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:
22
SMITH HELMS MULLISS & MOORE, L.L.P.
ATTORNEYS AT LAW
CHARLOTTE, NORTH CAROLINA
November 25, 1996
NationsBank Corporation
NationsBank Corporate Center
Charlotte, North Carolina 28255
Re: Registration Statement on Form S-3 (Reg. No. 333-15375) with
respect to an Aggregate of $1,000,000,000 of Junior Subordinated
Debt Securities and Guarantees
Ladies and Gentlemen:
We have acted as counsel to NationsBank Corporation (the "Corporation")
in connection with the registration by the Corporation of up to an aggregate
of $1,000,000,000 of its junior subordinated debt securities (the "Debt
Securities") and guarantees of preferred securities of certain trusts (the
"Guarantees", and, together with the Debt Securities, the "Securities")
as set forth in the Registration Statement on Form S-3, File No. 333-15375
(the "Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") by the Corporation pursuant to the Securities Act of 1933,
as amended. This opinion letter is Exhibit 5.1 to the Registration Statement.
The Securities are to be issued, separately or together, in one or more
series and are to be sold from time to time as set forth in the Registration
Statement, the Prospectuses contained therein (each, a "Prospectus") and
any amendments or supplements thereto.
We have relied upon an officer's certificate as to corporate action
heretofore taken with respect to the Securities.
Based on the foregoing, we are of the opinion that when (1) the Registration
Statement shall have been declared effective by order of the Commission, (2)
the terms of any class or series of such Securities have been authorized by
appropriate corporate action of the Corporation and (3) such Securities
have been issued, sold and delivered upon the terms and conditions set forth
in the Registration Statement, the applicable Prospectus and the applicable
supplement(s) to such Prospectus (including, in the case of the Debt
Securities, due authentication thereof by the Trustee or by the authenticating
agent, in accordance with the provisions of the Indenture under which the
Debt Securities are to be issued), then (a) the Securities will be validly
authorized and issued and binding obligations of the Corporation.
<PAGE>
NationsBank Corporation
November 25, 1996
Page 2
In rendering this opinion, we are not expressing an opinion as to the
laws of any jurisdiction other than the State of North Carolina and the
United States of America, and we assume no responsibility as to the
applicability of the laws of any other jurisdiction to the subject matter
hereof or to the effects of such laws thereon.
This opinion is rendered to you and for your benefit solely in connection
with the registration of the Securities. This opinion may not be relied on
by you for any other purpose and may not be relied upon by, nor may copies
thereof be provided to, any other person, firm, corporation or entity for any
purposes whatsoever without our prior written consent. We hereby consent to
be named in the Registration Statement and in each of the Prospectuses as
attorneys who passed upon the legality of the Securities and to the filing
of a copy of this opinion as Exhibit 5.1 to the Registration Statement.
Unless the prior written consent of our firm is obtained, this opinion
is not to be quoted or otherwise referred to in any written report, proxy
statement or other registration statement, nor is it to be filed with or
furnished to any other governmental agency or other person, except as
otherwise required by law.
Very truly yours,
/s/ SMITH HELMS MULLISS & MOORE, L.L.P.
Smith Helms Mulliss & Moore, L.L.P.
<PAGE>
RICHARDS, LAYTON & FINGER
One Rodney Square
P.O. Box 551
WILMINGTON, DELAWARE 1 9899
TELEPHONE (302) 658-6541
TELECOPIER (302) 658-6548
WRITER'S DIRECT DIAL NUMBER
November 25, 1996
NB Capital Trust I
NB Capital Trust II
NB Capital Trust III
c/o NationsBank Corporation
NationsBank Corporate Center
Charlotte, North Carolina 28255
Re: NB Capital Trust I, NB Capital II and NB Capital Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for NationsBank Corporation, a
North Carolina corporation (the "Company"), NB Capital Trust I, a Delaware
business trust ("Trust I"), NB Capital Trust II, a Delaware business
trust ("Trust II"), and NB Capital Trust III, a Delaware business
trust ("Trust III") (Trust I, Trust II and Trust III are hereinafter
collectively referred to as the "Trusts" and sometimes hereinafter individually
referred to as a "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals
or copies of the following:
(a) The Certificate of Trust of Trust I, dated October 29, 1996 as filed
with the office of the Secretary of State of the State of Delaware, (the
"Secretary of State") on November 1, 1996;
(b) The Certificate of Trust of Trust II, dated October 29, 1996, as filed
with the Secretary of State on November 1, 1996;
<PAGE>
NB Capital Trust I
NB Capital Trust II
NB Capital Trust III
November 25, 1996
Page 2
(c) The Certificate of Trust of Trust III, dated October 29, 1996, as
filed with the Secretary of State on November 1, 1996;
(d) The Declaration of Trust of Trust I, dated as of October 29, 1996
among the Company and the trustees of Trust I named therein;
(e) The Declaration of Trust of Trust II, dated as of October 29, 1996
among the Company and the trustees of Trust II named therein;
(f) The Declaration of Trust of Trust III, dated as of October 29, 1996
among the Company and the trustees of Trust III named therein;
(g) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus and a prospectus supplement with
respect to Trust I (the "Prospectus"), relating to the Preferred Securities of
the Trusts representing preferred undivided beneficial interests in the assets
of the Trusts (each, a "Preferred Security" and collectively, the "Preferred
Securities"), filed by the Company and the Trusts with the Securities and
Exchange Commission on November 1, 1996;
(h) A form of Amended and Restated Declaration of Trust for each of the
Trusts, to be entered into between the Company, the trustees of the Trust
named therein, and the holders, from time to time, of the undivided beneficial
interests in the assets of such Trust (including the exhibits and Annex I
thereto) (collectively, the "Declarations" and individually, a "Declaration"),
attached as an exhibit to the Registration Statement; and
(i) A Certificate of Good Standing for each of the Trusts, dated
November 22, 1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declarations.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (i) above. In particular,
we have not reviewed any document (other than the documents listed in
paragraphs (a) through (i) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there
exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth
<PAGE>
NB Capital Trust I
NB Capital Trust II
NB Capital Trust III
November 25, 1996
Page 3
therein and the additional matters recited or assumed herein, all of which
we have assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each of the
Declarations constitutes the entire agreement among the parties thereto
with respect to the subject matter thereof, including with respect to the
creation, operation and termination of the applicable Trust, and that the
Declarations and the Certificates of Trust are in full force and effect and
have not been amended, (ii) except to the extent provided in paragraph 1
below, the due organization or due formation, as the case may be, and
valid existence in good standing of each party to the documents examined
by us under the laws of the jurisdiction governing its organization or
formation, (iii) the legal capacity of natural persons who are parties to the
documents examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents examined
by us, (vi) the receipt by each Person to whom a Preferred Security is to
be issued by the Trusts (collectively, the "Preferred Security Holders") of
a Preferred Security Certificate for such Preferred Security and the payment
for such Preferred Security, in accordance with the Declarations and the
Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the
Declarations and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders
thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary
or appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that:
<PAGE>
NB Capital Trust I
NB Capital Trust II
NB Capital Trust III
November 25, 1996
Page 4
1. Each of the Trusts has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act.
2. The Preferred Securities of each Trust will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the applicable
Trust.
3. The Preferred Security Holders, as beneficial owners of the
applicable Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware. We note that the
Preferred Security Holders may be obligated to make payments as set forth
in the Declaration.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. We hereby consent
to the use of our name under the heading "Legal Matters" in the Prospectus.
In giving the foregoing consents, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above,
without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other person for any purpose.
Very truly yours,
/s/ RICHARDS, LAYTON & FINGER
Richards, Layton & Finger
[Letterhead]
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004-2696
212 806 5400 Direct Dial:
Fax: 212 806 6006
Telex: 177693 STROOCK NY
November 22, 1996
NationsBank Corporation
NationsBank Corporate Center
Charlotte, NC 28255
Ladies and Gentlemen:
We have acted as special tax counsel to NationsBank Corporation
(the "Company") and to NB Capital Trust I, NB Capital Trust II and NB Capital
Trust III (the "Trusts") in connection with the proposed issuance of (i)
Preferred Securities (the "Preferred Securities") of the Trusts to be offered
in one or more underwritten public offerings; (ii) Junior Subordinated
Deferrable Interest Notes (the "Notes") of the Company to be issued
pursuant to the terms of an indenture from the Company to The Bank of
New York, as trustee (the "Indenture") to be issued and sold by the
Company to the Trusts, and (iii) Guarantee Agreements of the
Company with respect to the Preferred Securities (the "Guarantees") between
the Company and The Bank of New York, as trustee. The Preferred Securities
and the Notes are to be issued in a combined aggregate liquidation amount
of up to $1,000,000,000, as contemplated by the registration statement on
Form S-3 (file No. 333-15375), as amended (the "Registration Statement")
filed by the Company and the Trusts on November 1, 1996 for the registration
of the Preferred Securities, the Notes and the Guarantees under the Securities
Act of 1933, as amended (the "Act").
We have examined and are familiar with originals or copies, certified
or otherwise identified to our satisfaction, of (i) the Registration Statement,
(ii) the Indenture, and (iii) the Guarantees. We have also examined such other
documents and satisfied ourselves as to such other matters as we have deemed
necessary in order to render this opinion.
Based on the foregoing and subject to the qualifications hereinafter
expressed, we are of the opinion that the statements contained in the
preliminary prospectus supplement constituting part of the Registration
Statement under the caption "United States Federal Income Taxation" describing
certain federal income tax consequences to holders of the Preferred Securities
and the Notes, as qualified therein, constitute an accurate description, in
general terms, of the indicated United States federal tax consequences to
such holders.
Washington, D.C. 20036-4652 Los Angeles, CA 90067-3088
1150 Seventeenth Street N.W. 2029 Century Park East
202 452 9250 310 558 5800
Miami, FL 33131-2385 H-1088 Budapest, Hungary
200 South Biscayne Boulevard Rakoczi ut 1-3
305 358 9900 361 266 9520
<PAGE>
Stroock & Stroock & Lavan
NationsBank Corporation
November 22, 1996
Page 2
The opinion expressed above is based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury
regulations, published interpretations of the Code and such Treasury
regulations by the Internal Revenue Service, and existing court decisions, any
of which could be changed at any time. Any such changes may or may not be
retroactively applied.
Attorneys involved in the preparation of this opinion are admitted to
practice law in the State of New York and we do not purport to be experts on,
or express any opinion herein concerning any law other than the laws of the
State of New York and the federal laws of the United States of America
(excluding therefrom principles of conflicts of laws, state securities or
blue sky laws). To the extent that our opinion relates to or is dependent
upon matters governed by the laws of other states, we have assumed the legal
conclusions set forth in the opinions of Smith Helms Mulliss & Moore, L.L.P.
and of Richards, Layton & Finger which are being filed as Exhibits 5.1 and 5.2,
respectively, to the Registration Statement.
This letter is not being delivered for the benefit of, nor may it be
relied upon by, the holders of the Notes, the Guarantees or the Preferred
Securities or any other party to which it is not specifically addressed or on
which reliance is not expressly permitted hereby.
We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement and to reference to our firm under the caption "Legal
Matters" in the preliminary prospectus constituting a part of the Registration
Statement. In giving such consent, we do not admit hereby that we come within
the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Stroock & Stroock & Lavan
Stroock & Stroock & Lavan
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in Amendment No. 2 the
Registration Statement (Form S-3) and related prospectus of NationsBank
Corporation for the registration of $1,000,000,000 of junior subordinated notes
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 and Form
8-K/A-2 on November 13, 1996) as filed with the Securities and Exchange
Commission.
St. Louis, Missouri
November 22, 1996
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NATIONSBANK CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-0906609
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
JUNIOR SUBORDINATED DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS
SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE. (SEE NOTE ON PAGE 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH
CONTAINS THE AUTHORITY TO COMMENCE BUSINESS AND A GRANT OF
POWERS TO EXERCISE CORPORATE TRUST POWERS. (EXHIBIT 1 TO
AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO
FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE ACT. (EXHIBIT
6 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED PURSUANT
TO LAW OR TO THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/MARY LAGUMINA
NAME: MARY LAGUMINA
TITLE: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NB CAPITAL TRUST I
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
PREFERRED SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
==============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
affiliation.
NONE. (SEE NOTE ON PAGE 3.)
16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK (FORMERLY
IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH CONTAINS THE AUTHORITY TO
COMMENCE BUSINESS AND A GRANT OF POWERS TO EXERCISE CORPORATE TRUST POWERS.
(EXHIBIT 1 TO AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-29637.)
4 A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE ACT. (EXHIBIT
6 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED PURSUANT
TO LAW OR TO THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/WALTER N. GITLIN
NAME: WALTER N. GITLIN
TITLE: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NB CAPITAL TRUST II
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 56-6490301
(STATE OR OTHER JURISDICTION OF (I.R.S. employer
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER 28255
CHARLOTTE, NORTH CAROLINA (Zip code)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
----------------------
PREFERRED SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE. (SEE NOTE ON PAGE 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH
CONTAINS THE AUTHORITY TO COMMENCE BUSINESS AND A GRANT OF
POWERS TO EXERCISE CORPORATE TRUST POWERS. (EXHIBIT 1 TO
AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO
FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE
ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE
REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/WALTER N. GITLIN
NAME: WALTER N. GITLIN
TITLE: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NB CAPITAL TRUST III
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 56-6490302
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
PREFERRED SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE. (SEE NOTE ON PAGE 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH
CONTAINS THE AUTHORITY TO COMMENCE BUSINESS AND A GRANT OF
POWERS TO EXERCISE CORPORATE TRUST POWERS. (EXHIBIT 1 TO
AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO
FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE ACT. (EXHIBIT
6 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED PURSUANT TO
LAW OR TO THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/WALTER N. GITLIN
NAME: WALTER N. GILTIN
TITLE: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NATIONSBANK CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-0906609
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER 28255
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
GUARANTEE OF PREFERRED SECURITIES OF
NB CAPITAL TRUST I
(TITLE OF THE INDENTURE SECURITIES)
==============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE. (SEE NOTE ON PAGE 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH
CONTAINS THE AUTHORITY TO COMMENCE BUSINESS AND A GRANT OF
POWERS TO EXERCISE CORPORATE TRUST POWERS. (EXHIBIT 1 TO
AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO
FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE
ACT. (EXHIBIT 6 TO FORM T-1 WITH REGISTRATION STATEMENT NO.
33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/STEPHEN J. GIURLANDO
NAME: STEPHEN J. GIURLANDO
TITLE: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NATIONSBANK CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-0906609
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
GUARANTEE OF PREFERRED SECURITIES OF
NB CAPITAL TRUST II
(TITLE OF THE INDENTURE SECURITIES)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS
SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE. (SEE NOTE ON PAGE 3.)
16 LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH
CONTAINS THE AUTHORITY TO COMMENCE BUSINESS AND A GRANT OF
POWERS TO EXERCISE CORPORATE TRUST POWERS. (EXHIBIT 1 TO
AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO FORM T-1 FILED
WITH REGISTRATION STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE ACT. (EXHIBIT
6 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED PURSUANT
TO LAW OR TO THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/STEPHEN J. GIURLANDO
NAME: STEPHEN J. GIURLANDO
TITLE: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817z
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
NATIONSBANK CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-0906609
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
GUARANTEE OF PREFERRED SECURITIES OF
NB CAPITAL TRUST III
(TITLE OF THE INDENTURE SECURITIES)
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE. (SEE NOTE ON PAGE 3.)
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE
24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY) AS NOW IN EFFECT, WHICH
CONTAINS THE AUTHORITY TO COMMENCE BUSINESS AND A GRANT OF
POWERS TO EXERCISE CORPORATE TRUST POWERS. (EXHIBIT 1 TO
AMENDMENT NO. 1 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-6215, EXHIBITS 1A AND 1B TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-21672 AND EXHIBIT 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT 4 TO
FORM T-1 FILED WITH REGISTRATION STATEMENT NO. 33-31019.)
-2-
<PAGE>
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE
ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
NOTE
INASMUCH AS THIS FORM T-1 IS FILED PRIOR TO THE ASCERTAINMENT BY THE
TRUSTEE OF ALL FACTS ON WHICH TO BASE A RESPONSIVE ANSWER TO ITEM 2, THE ANSWER
TO SAID ITEM IS BASED ON INCOMPLETE INFORMATION.
ITEM 2 MAY, HOWEVER, BE CONSIDERED AS CORRECT UNLESS AMENDED BY AN
AMENDMENT TO THIS FORM T-1.
-3-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW
YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW
YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND
STATE OF NEW YORK, ON THE 20TH DAY OF NOVEMBER, 1996.
THE BANK OF NEW YORK
BY: /S/STEPHEN J. GIURLANDO
NAME: STEPHEN J. GIURLANDO
TITLE: ASSISTANT VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 27,820,159
LESS: Allowance for loan and
lease losses .............. 509,817
LESS: Allocated transfer risk
reserve...................... 1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
Total assets ......................... $41,558,682
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing ....... 7,102,645
Interest-bearing ......... 11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing .......... 37,855
Interest-bearing ......... 10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
Total liabilities .................... 38,015,103
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency transla-
tion adjustments .................. (5,765)
Total equity capital ................ 3,543,579
Total liabilities and equity
capital ........................... $41,558,682
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
