SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 22, 1997
NATIONSBANK CORPORATION
(Exact name of registrant as specified in its
charter)
North Carolina
(State or other jurisdiction of incorporation or
organization)
1-6523
(Commission File Number)
56-0906609
(IRS Employer Identification No.)
NationsBank Corporate Center
Charlotte, North Carolina
(Address of principal executive offices)
28255
(Zip Code)
(704) 386-5000
(Registrant's telephone number, including area
code)
NB CAPITAL TRUST III
(Exact name of registrant as specified in its
charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
1-6523-03
(Commission File Number)
56-6490302
(IRS Employer Identification No.)
c/o NationsBank Corporate Center
Charlotte, North Carolina
(Address of principal executive offices)
28255
(Zip Code)
(704) 386-5972
(Registrant's telephone number, including area
code)
<PAGE>
ITEM 5. OTHER EVENTS.
For a transaction effective January 22, 1997, the Trustees (the
"Trustees") of NB Capital Trust III (the "Trust") approved the public offering
of 500,000 of the Trust's Floating Rate Capital Securities(liquidation amount
$1,000 per security) having an aggregate initial offering price of $500,000,000
(the "Capital Securities"), which Capital Securities represent the undivided
preferred beneficial interests in the assets of the Trust, to various
underwriters (the "Underwriters") and otherwise established the terms and
conditions of the Capital Securities. In connection with the offering of the
Capital Securities, the Trustees also approved the sale of the Trust's Common
Securities (the "Common Securities") to NationsBank Corporation ("NationsBank")
and otherwise established the terms and conditions of the Common Securities.
Also for a transaction effective January 22, 1997, the Trustees authorized the
investment of the proceeds from the sale of the Capital Securities and the
Common Securities in the Floating Rate Junior Subordinated Deferrable Interest
Notes, due 2027 of NationsBank (the "Junior Notes"). The resolutions of the
Trustees are included as Exhibit 99.1 hereto.
By written consent dated January 22, 1997, a Committee appointed by the
Board of Directors of NationsBank approved the sale to the Trust of a series of
the Junior Notes having an aggregate principal amount of up to $515,500,000 and
otherwise established the terms and conditions of the Junior Notes. Resolutions
of such Committee are included as Exhibit 99.2 hereto.
The terms of the offering, the Capital Securities, the Common
Securities and the Junior Notes are described in the Registrants' Prospectus
dated January 14, 1997, constituting a part of the Registration Statement
(hereinafter described), as supplemented by a Prospectus Supplement dated
January 22, 1997. The Underwriting Agreement is included as Exhibit 1.1 hereto.
The offering was closed on February 3, 1997.
The Capital Securities were issued pursuant to the Registrants'
Registration Statement on Form S-3, Registration Nos. 333-18273 and 333-18273-01
(the "Registration Statement"), on a delayed basis pursuant to Rule 415 under
the Securities Act of 1933, as amended. The Registration Statement registered up
to $1,031,000,000 aggregate initial price of NationsBank junior subordinated
notes and up to $1,000,000,000 aggregate initial offering price of preferred
securities of NB Capital Trust III, NB Capital Trust IV and NB Capital Trust V
together with related guarantees of such preferred securities by NationsBank.
The Registration Statement was declared effective on January 14, 1997.
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<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1.1 Underwriting Agreement dated January 22, 1997 with
respect to the offering of the Capital Securities
4.1 Form of Capital Securities
4.2 Form of Junior Note (included in Exhibit 4.3)
4.3 Third Supplemental Indenture to be used in connection
with the issuance of Junior Notes
4.4 Amended and Restated Declaration of Trust of NB
Capital Trust III
99.1 Resolutions of the Trustees of NB Capital
Trust III dated January 22, 1997 with
respect to the terms of the offering of the
Capital Securities
99.2 Resolutions of a Committee appointed by the Board of
Directors of NationsBank Corporation dated January 22,
1997 with respect to the Junior Notes
99.3 News Release disseminated on January 22, 1997
regarding the sale of the Capital Securities
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
NATIONSBANK CORPORATION
By: /s/CHARLES M. BERGER
----------------------------------
CHARLES M. BERGER
Associate General Counsel
NB CAPITAL TRUST III
By: /S/ JOHN E. MACK
-----------------------------------
JOHN E. MACK
Regular Trustee
Dated: February 3, 1997
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description Page No.
<S> <C>
1.1 Underwriting Agreement dated January 22, 1997
with respect to the offering of the Capital Securities
4.1 Form of Capital Securities
4.2 Form of Junior Note (included in Exhibit 4.3)
4.3 Third Supplemental Indenture to be used in connection
with the issuance of Junior Notes
4.4 Amended and Restated Declaration of Trust of NB
Capital Trust III
99.1 Resolutions of the Trustees of NB Capital Trust III
dated January 22, 1997 with respect to the
terms of the offering of the Capital Securities
99.2 Resolutions of a Committee appointed by the
Board of Directors of NationsBank Corporation
dated January 22, 1997 with respect to
the Junior Notes
99.3 News Release disseminated on January 22, 1997
regarding the sale of the Capital Securities
</TABLE>
5
500,000 Capital Securities
NB CAPITAL TRUST III
(a Delaware Trust)
Floating Rate Capital Securities
(Liquidation Amount of $1,000 per Capital Security)
UNDERWRITING AGREEMENT
---------------
January 22, 1997
NationsBanc Capital Markets, Inc.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
as Representatives of the several Underwriters
c/o NationsBanc Capital Markets, Inc.
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attention: Mark T. Wilson
Director
Ladies and Gentlemen:
NB Capital Trust III (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 NationsBanc Capital Markets, Inc., Bear, Stearns & Co. Inc.
and Lehman Brothers Inc. and each of the several Underwriters named in Schedule
A hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 9 hereof), for whom
NationsBanc Capital Markets, Inc., Bear, Stearns & Co. Inc. and Lehman Brothers
Inc. are acting as representatives (in such capacity, the "Representatives",
however, if the Underwriters named in Schedule A hereto include only NationsBanc
Capital Markets, Inc., Bear, Stearns & Co. Inc. and Lehman Brothers Inc., then
all references in this Agreement to the Representatives shall be deemed
references to the Underwriters), with respect to the sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of Floating Rate Capital Securities (liquidation amount of
$1,000 per Capital security) of the Trust (the "Capital Securities") set forth
in Schedule A attached hereto. The Capital 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 "Capital Securities Guarantee") pursuant to the
Capital Securities Guarantee Agreement, to be dated as of
<PAGE>
February 3, 1997, (the "Capital 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 Capital Securities). The Capital Securities and the related Capital
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. 333-18273) and a
related prospectus for the registration under the Securities Act of 1933, as
amended (the "1933 Act") of (i) the Capital Securities, (ii) the Capital
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 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
Capital 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 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 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 Capital 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 Capital
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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
Capital Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement, to be dated as of February 3, 1997, (the "Common
Securities Guarantee Agreement" and, together with the Capital Securities
Guarantee Agreement, the "Guarantee Agreements") and will be used by the Trust
to purchase $515,500,000 aggregate principal amount of Floating Rate Junior
Subordinated Deferrable Interest Notes due 2027 (the "Junior Subordinated
Notes") issued by the Company, under the Indenture (as defined herein). The
Capital Securities and the Common Securities will be issued pursuant to the
Amended and Restated Declaration of Trust of the Trust, dated as of January 22,
1997 (the "Declaration"), among the Company, as Sponsor, John E. Mack, William
L. Maxwell and Marc D. Oken, as trustees (the "Regular Trustees"), The Bank of
New York (Delaware), a Delaware banking corporation (as "Delaware Trustee"), and
The Bank of New York, a New York banking corporation, as property trustee (the
"Property Trustee" and, together with the Delaware Trustee and 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 27, 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, to be dated as of February 3,
1997 (the "Supplemental Indenture," and together with the Base Indenture, 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 Closing Time (as hereinafter defined) 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 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
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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 inclusion in the Registration
Statement and the Prospectus and actually included therein.
(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 Capital
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 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
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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 Capital Securities Guarantee
Agreement, assuming due authorization, execution and delivery of the
Capital 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 Capital Securities Guarantee Agreement will have been
duly qualified under the 1939 Act.
(ix) The Capital Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered
pursuant to this Agreement against 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 Capital
Securities is not subject to preemptive or other similar rights; and,
subject to the terms of the Declaration, holders of Capital 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 Capital 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
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"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 Capital 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 Capital 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 follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, 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
Declaration, as Sponsor, the Indenture and each of the Guarantee
Agreements 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.
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(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 Guarantee Agreements
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.
(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.
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(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) 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, 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 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 and the Guarantee Agreements, the issuance
and sale of the Capital 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
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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 Underwriters 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.
(f) No action has been taken or will be taken in any
jurisdiction by the Underwriters that would permit a public offering of the
Securities in any country or jurisdiction where action for that purpose is
required. Each Underwriter severally agrees with the Offerors that it will
observe all applicable laws and regulations in each jurisdiction in which it
may offer, sell or deliver the Securities. Each Underwriter severally agrees
that it will not, directly or indirectly, offer, sell or deliver Securities or
distribute the Prospectus or any other offering materials in relation to the
Securities except under circumstances that will to the best of its knowledge
and belief result in compliance with any applicable laws and regulations.
(g) Each Underwriter represents and agrees that (a) it has not
offered or sold and, prior to the expiry of six months from the Closing Time,
will not offer or sell in the United Kingdom any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (whether as principal
or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulation 1995 or the Financial Services Act 1986 (the "1986 Act"), (b) it
has complied and will comply with all applicable provisions of the 1986 Act
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (c) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom any document
received by it in connection with the issue of the Securities, other than any
document which consists of or any part of listing particulars, supplementary
listing particulars or any other document required or permitted to be
published by listing rules under Part IV of the 1986 Act, to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom the
document may otherwise lawfully be issued or passed on.
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
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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 Capital Securities set forth in Schedule A opposite the name of such
Underwriter (except as otherwise provided in Schedule B), plus any additional
number of Capital Securities that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 9 hereof.
The purchase price per security to be paid by the several Underwriters
for the Capital Securities shall be an amount equal to the initial public
offering price. The initial public offering price per Capital Security shall be
a fixed price to be determined by agreement between the Underwriter 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 Capital
Securities will be used to purchase the Junior Subordinated Notes of the
Company, the Company hereby agrees to pay at Closing Time directly to the
Underwriters, a commission per Capital Security determined by agreement between
the Representatives and the Company for the Capital 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 Capital 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 fourth business
day (unless postponed in accordance with the provisions of Section 9) after the
date hereof, or such other time not later than ten business days after such date
as shall be agreed upon by the 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 Capital
Securities to be purchased by them. Unless otherwise agreed, certificates for
the Capital 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 this Section 2 hereof
by wire transfer or certified or official bank check or checks payable to the
Representatives in same day funds.
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
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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 Capital
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 Underwriters or counsel for the Underwriters shall 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 1933 Act Regulations.
(e) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Capital 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
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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 Capital Securities (and the Capital 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
Underwriters 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 1933 Act) of
the Registration Statement, which will satisfy the provisions of Section 11(a)
of the 1933 Act.
(h) The Offerors will use best efforts to effect the listing of the
Capital Securities on the Luxembourg Stock Exchange; if the Capital 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 Capital Securities are then listed.
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 Capital Securities, (iii) the fees and
disbursements of the Company's and the Trust's counsel and accountants, (iv) the
qualification of the Capital Securities, the Capital 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. (the "NASD"), 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, the
Delaware Trustee and the Guarantee Trustee, including the fees and disbursements
of counsel for the Delaware Trustee in connection with the Declaration and the
Certificate of Trust; (x) any fees payable in connection with the rating of the
Capital Securities and Junior Subordinated Notes; (xi) the cost and charges of
any transfer agent or registrar
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(xii) the cost of qualifying the Capital Securities with DTC, and (xiii) the
fees and expenses incurred in connection with the listing of the Capital
Securities and, if applicable, the Junior Subordinated Notes on the Luxembourg
Stock Exchange.
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 or trustees of the Trust, to the performance by the Offerors of
their obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective prior to 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 (xvii) 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.
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(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 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 or 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) 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.
(vi) 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).
(vii) 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 Capital Securities, the
Capital Securities Guarantee and the Junior Subordinated Notes by the
Offerors, except (A) such as may be required under the 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 Capital Securities Guarantee Agreement and the
Indenture under the 1939 Act.
(viii) 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.
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(ix) Each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Company; the Capital
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 Capital
Securities Guarantee Agreement has been duly qualified under the 1939
Act. The Common Securities Guarantee Agreement 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.
(x) 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.
(xi) 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.
(xii) 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.
(xiii) The Common Securities, the Capital Securities and the
Declaration conform in all material respects to all statements relating
thereto contained in the Prospectus.
(xiv) 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.
(xv) The Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
(xvi) This Agreement has been duly executed and delivered by
the Trust.
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(xvii) If the Capital Securities are to be listed on the
Luxembourg Stock Exchange, authorization therefor has been given, or
the Company, its agent, the Trust or its agent has filed a listing
application with respect to the Capital Securities with the Luxembourg
Stock Exchange and such counsel has no reason to believe that the
Capital Securities will not be authorized for listing.
In rendering such opinions, such counsels 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 Guarantee Agreements, that certain subscription agreement, of
even date herewith, between the Company and the Trust covering the Common
Securities and that certain note purchase agreement, of even date herewith,
between the 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 Capital Securities and the Common
Securities.
(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 represent undivided beneficial
interests in the assets of the Trust.
(iv) The Capital 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 Capital 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
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corporations for profit; and the issuance of the Capital Securities is
not subject to preemptive or other similar rights.
(v) This Agreement has been duly authorized by the Trust.
(vi) The issuance and sale by the Trust of the Capital
Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, the consummation by the
Trust of the transactions contemplated hereby and the compliance by the
Trust with its obligations hereunder will not violate (A) any of the
provisions of the Certificate of Trust or the Declaration or (B) any
applicable Delaware law or administrative regulation.
(3) The favorable opinion of Richards, Layton & Finger,
Special Delaware counsel to The Bank of New York (Delaware), 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 Delaware
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of, the Delaware Trustee. The Declaration
has been duly executed and delivered by the Delaware Trustee, and
constitutes the legal, valid and binding obligation of the Delaware
Trustee, enforceable against the Delaware Trustee in accordance with
its terms, except as enforcement thereof may be limited by the
Permitted Exceptions.
(iii) The execution, delivery and performance of the
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of the articles of organization or bylaws of the
Delaware Trustee.
(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 Delaware
Trustee of the Declaration.
(4) The favorable opinion, dated as of Closing Time, of
Emmett, Marvin & Martin, LLP, counsel of The Bank of New York, as Debt Trustee
under the Indenture, as Guarantee Trustee under the Capital Securities Guarantee
Agreement, and as Property Trustee under the Declaration, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
17
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(i) The Bank of New York is a New York banking corporation
with trust powers, duly organized, validly existing and in good
standing under the laws of the State of New York with all necessary
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of the Declaration, the
Indenture and the Capital Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the Debt
Trustee of the Indenture, the execution, delivery and performance by
the Property Trustee of the Declaration, and the execution, delivery
and performance by the Guarantee Trustee of the Capital 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 has been duly
executed and delivered by the Debt Trustee, and constitutes the legal,
valid and binding obligations of the Debt Trustee, enforceable against
the Debt Trustee in accordance with its terms, except as enforcement
thereof may be limited by the Permitted Exceptions. The Declaration has
been duly executed and delivered by the Property Trustee, and
constitutes the legal, valid and binding obligations of the Property
Trustee, enforceable against the Property Trustee in accordance with
its terms, except as enforcement thereof may be limited by the
Permitted Exceptions. The Capital Securities Guarantee Agreement has
been duly executed and delivered by the Guarantee Trustee, and
constitutes the legal, valid and binding obligations of the Guarantee
Trustee, enforceable against the Guarantee Trustee in accordance with
its terms, except as enforcement thereof may be limited by the
Permitted Exceptions.
(iii) The execution, delivery and performance of the Indenture
by the Debt Trustee, does not conflict with or constitute a breach of
the Articles of Organization or Bylaws of the Debt Trustee. The
execution, delivery and performance of the Declaration by the Property
Trustee does not conflict with or constitute a breach of the Articles
of Organization or Bylaws of the Property Trustee. The execution,
delivery and performance of the Capital Securities Guarantee Agreement
by the Guarantee Trustee does not conflict with or constitute a breach
of the Articles of Organization or Bylaws of the Guarantee Trustee.
(iv) No consent, approval or authorization of, or registration
with or notice to, any New York or federal banking authority is
required for the execution, delivery or performance by the Debt Trustee
of the Indenture. No consent, approval or authorization of, or
registration with or notice to, any New York or federal banking
authority is required for the execution, delivery or performance by the
Property Trustee of the Declaration. No consent, approval or
authorization of, or registration with or notice to, any New York or
federal banking authority is required for the execution, delivery or
performance by the Guarantee Trustee of the Capital Securities
Guarantee Agreement.
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(5) 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 Capital Securities, the Indenture, the Capital
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.
(6) 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 Federal Income
Taxation."
(7) 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.
(8) 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 Vice President of the Company and of the chief
financial or chief accounting officer of the Company and a certificate of a
Regular 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 or
the Company, as the case may be, 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.
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(9) 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 the 1933 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 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
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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
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 9.
(10) 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 Capital
Securities as herein
21
<PAGE>
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 Capital Securities as herein
contemplated shall be satisfactory in form and substance to the Representatives
and Stroock & Stroock & Lavan, counsel for the Underwriters.
(11) 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 Capital 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 Capital 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 Capital Securities for a
possible downgrade.
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, 6, and 7 shall survive any such termination and will remain in full
force and effect.
SECTION 6. 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 Capital 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 Capital 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
22
<PAGE>
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 Capital 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 Capital 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.
(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 last paragraph of the cover page (p. S-4) 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 6 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 6, 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 6 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 6 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
6, 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
23
<PAGE>
indemnifying party to such 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 6 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 6(a)
hereof.
(e) If the indemnification provided for in the preceding
paragraphs of this Section 6 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 Capital 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 Capital Securities) be responsible
for any amount in excess of the total discounts and/or commissions received by
it with respect to the Capital 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 6, each person who controls an Underwriter within the
meaning of the 1933 Act shall have the same rights to
24
<PAGE>
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 (e).
SECTION 7. 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 or on behalf of any Underwriter or
controlling person, or by or on behalf of the Offerors and shall survive
delivery of the Capital Securities to the Underwriters.
SECTION 8. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by
notice to the Offerors, at any time at or prior to 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, (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 Capital Securities or to enforce
contracts for the sale of the Capital Securities, (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, (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 Capital Securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the 1933 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 Capital Securities for possible downgrade.
(b) If this Agreement is terminated pursuant to this Section
8, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof,
25
<PAGE>
and except that Sections 1, 6, and 7 shall survive any such termination and will
remain in full force and effect.
SECTION 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at Closing Time to purchase the Capital
Securities 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:
(a) if the number of Defaulted Securities does not exceed 10%
of the Capital Securities 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
Capital Securities 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 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 10. 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 them at NationsBanc Capital Markets, Inc., 100
North Tryon Street, 7th Floor, Charlotte, North Carolina 28255, attention of
Mark T. Wilson, 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 11. 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
26
<PAGE>
in Section 6 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 Capital Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 12. 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 13. 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.
27
<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:/s/ SUSAN Y. CALTON
------------------------------
Name: Susan Y. Calton
Title: Vice President
NB CAPITAL TRUST III
By:/s/ JOHN E. MACK
------------------------------
Name: John E. Mack
Title: Regular Trustee
CONFIRMED AND ACCEPTED, as of the date first above written:
NATIONSBANC CAPITAL MARKETS, INC.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
For themselves and as Representatives
of the several Underwriters named in
Schedule A hereto.
By: NationsBanc Capital Markets, Inc.
By: /S/ MARK T. WILSON
----------------------------
Name: Mark T. Wilson
Title: Managing Director
28
<PAGE>
===============================================================================
SCHEDULE A
===============================================================================
NUMBER OF CAPITAL
NAME OF UNDERWRITER SECURITIES
NationsBanc Capital Markets, Inc..................... 134,000
Bear, Stearns & Co. Inc.............................. 133,000
Lehman Brothers Inc.................................. 133,000
Credit Suisse First Boston Corporation............... 20,000
J.P. Morgan Securities Inc........................... 20,000
Prudential Securities Incorporated................... 20,000
Salomon Brothers Inc................................. 20,000
UBS Securities LLC................................... 20,000
500,000,000
29
<PAGE>
===============================================================================
SCHEDULE B
===============================================================================
Underwriting Agreement dated January 22, 1997
Registration Statement No. 333-18273
Underwriters: NationsBanc Capital Markets, Inc.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Address of Underwriters: c/o NationsBanc Capital Markets, Inc.
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attention: Mark T. Wilson, Director
Title, Purchase Price and Description of Securities:
Title: Floating Rate Capital Securities due 2027
1. The initial public offering price per security for the
Capital Securities, determined as provided in said Section 2, shall be
$984.90.
2. The purchase price per security for the Capital Securities
to be paid by the several Underwriters shall be $984.90, being an
amount equal to the initial public offering price set forth above.
3. The compensation per Capital Securities to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be $10.00.
30
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Security within the meaning
of the Declaration hereinafter referred to and is regis tered in the name of The
Depository Trust Company (the "Deposi tary") or a nominee of the Depositary.
This Capital Security is exchangeable for Capital 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 Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Capital 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 Capital 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 AFFILIATE OF NATIONSBANK CORPORATION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Certificate Number
__-R-_____________ CUSIP No. _______________
ISIN No. ________________
Common Code No.__________
Certificate Evidencing __________ Floating Rate Capital
Securities
of
NB CAPITAL TRUST III
Floating Rate Capital Securities
(liquidation amount $1,000 per Capital Security)
NB CAPITAL TRUST III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby
<PAGE>
certifies that CEDE & CO. (the "Holder") is the registered owner of
________________ Capital Securities of the Trust representing undivided
preferred beneficial interests in the assets of the Trust designated the
Floating Rate Capital Securities (liquida tion amount $1,000 per Capital
Security) (the "Capital Securities"). The Capital 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 Capital 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 January __, 1997, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Capital 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 Capital 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 Capital Securities Guarantee and the Indenture to
a Holder with out charge upon written request to the Sponsor 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 Capital
Securities as evidence of indirect beneficial ownership of the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate as
of ____________, 1997.
NB CAPITAL TRUST III
By:________________________________
Name: John E. Mack
Title: Regular Trustee
2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable
in respect of the liquidation amount of $1,000 per capital security at a rate
per annum equal to LIBOR plus ___%, such rate being the rate of interest payable
on the Notes to be held by the Property Trustee on behalf of the Trust.
Distributions in arrears will continue to accumulate at the same rate,
compounded quarterly. 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 on the basis of a 360-day year of twelve
30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including ___________, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one- millionths
of a percentage point rounded upward (e.g., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
Except as otherwise described below, Distributions on the
Capital Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in ar rears on January 15, April 15, July
15 and October 15 of each year, commencing on April 15, 1997 to the person in
whose name the Capital 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 January 1, April 1, July 1
or October 1. The Note Issuer has the right under the Inden ture to defer
payments of interest by extending the interest pay ment period from time to time
on the Notes for a period not exceeding 20 consecutive quarterly periods (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 to which Holders of such Capital Securities
are entitled will con tinue to accumulate additional Distributions thereon at a
rate per annum equal to LIBOR plus ___%, compounded quarterly from the relevant
payment date for such Distributions. Prior to the termination of any such
Extension Period, the Note Issuer may
3
<PAGE>
further extend such Extension Period; provided that such Exten sion Period
together with all such previous and further exten sions thereof may not exceed
20 consecutive quarterly periods 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 CAPITAL SECURITIES SHALL BE REDEEMABLE AS PROVIDED
IN THE DECLARATION.
4
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital 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 Capital 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 Capital Security
Certificate)
Signature Guarantee*:
-----------------------------------------------------------
- --------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stock broker, 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.
5
====================================
THIRD SUPPLEMENTAL INDENTURE
between
NATIONSBANK CORPORATION
and
THE BANK OF NEW YORK
Dated as of February 3, 1997
=====================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Definition of Terms....................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1 Designation and Principal Amount.......................5
SECTION 2.2 Maturity...............................................5
SECTION 2.3 Form and Payment.......................................6
SECTION 2.4 Global Form............................................6
SECTION 2.5 Interest...............................................8
SECTION 2.6 Notice of Interest Rate...............................11
ARTICLE III
PREPAYMENT OF THE NOTES
SECTION 3.1 Special Event Prepayment..............................11
SECTION 3.2 Optional Prepayment by Company........................11
SECTION 3.3 No Sinking Fund.......................................12
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period..................12
SECTION 4.2 Notice of Extension...................................13
SECTION 4.3 Limitation of Transactions............................13
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses...................................14
SECTION 5.2 Payment Upon Resignation or Removal...................15
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1 Listing on an Exchange................................15
ARTICLE VII
FORM OF NOTE
SECTION 7.1 Form of Note..........................................15
<PAGE>
i
TABLE OF CONTENTS
PAGE
ARTICLE VIII
ORIGINAL ISSUE OF NOTES
SECTION 8.1 Original Issue of Notes..................................25
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture................................25
SECTION 9.2 Trustee Not Responsible for Recitals.....................25
SECTION 9.3 Governing Law............................................25
SECTION 9.4 Separability.............................................26
SECTION 9.5 Counterparts.............................................26
ii
<PAGE>
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of February 3,
1997 (the "Third Supplemental Indenture"), between NATIONSBANK CORPORATION, a
North Carolina corporation (the "Company"), and THE BANK OF NEW YORK, as trustee
(the "Trustee") under the Indenture dated as of November 27, 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 Floating Rate Junior Subordinated Deferrable Interest Notes due
2027 (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 Third Supplemental Indenture;
WHEREAS, under the terms of an Underwriting Agreement dated as
of January 22, 1997 (the "Underwriting Agreement"), among the Company, NB
Capital Trust III (the "Trust") and NationsBank Capital Markets, Inc., Bear,
Stearns & Co. Inc. and Lehman Brothers, Inc., as representatives of the several
Underwriters named therein (the "Underwriters"), the Trust has agreed to sell to
the Underwriters 500,000 Floating Rate Capital Securities, having an aggregate
liquidation amount of $500,000,000, of its Floating Rate Capital Securities (the
"Capital Securities");
WHEREAS, under the terms of a Subscription Agreement dated as
of January 22, 1997 between the Trust and the Company (the "Subscription
Agreement"), the Company has committed to purchase all of the Floating Rate
Common Securities of the Trust (the "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 gross proceeds from
such offering of Capital Securities, together with the gross proceeds from the
issuance and sale by the Trust to the Company of the Common Securities, in the
purchase of Notes, as a result of which the Trust will initially purchase
$515,500,000 aggregate principal amount of the Notes; and
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WHEREAS, the Company has requested that the Trustee execute
and deliver this Third Supplemental Indenture, and all requirements necessary to
make this Third 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 Third 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 Third Supplemental Indenture;
(b) a term defined anywhere in this Third 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 Third 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) Clearing Agency; (ii) Delaware
Trustee; (iii) Depositary; (iv) No Recognition Opinion; (v)
Capital Security Certificate; (vi) Property Trustee; and (vii)
Regular Trustee;
(g) the following terms have the meanings given to
them in this Section 1.1(g):
"Additional Interest" shall have the meaning set forth
in Section 2.5.
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"Business Day" with respect to any Note means any day other
than a Saturday or Sunday that (i) is not a day on which banking institutions in
New York, New York, or Charlotte, North Carolina are authorized or required by
law or regulation to be closed and (ii) is a London Banking Day.
"Calculation Agent" means The Bank of New York or any
successor calculation agent under the Calculation Agency Agreement dated as of
January 22, 1997 among the Company, the Trust and The Bank of New York.
"Capital Treatment Event" means the reasonable determination
by the Company that, as a result of the occurrence of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, and there is more than an insubstantial risk that the Company will
not be entitled to treat an amount equal to the aggregate liquidation amount of
the Capital Securities as Tier 1 capital (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve Board, as
then in effect and applicable to the Company.
"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 III, a Delaware statutory business trust, dated as of
January 22, 1997.
"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 or other manner
specified in 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.
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"Interest Determination Date" for an Interest Payment Period
means that date that is two London Banking Days (as defined herein) preceding
the first day of such Interest Payment Period. The interest rate on the Notes
for each Interest Payment Period will be effective as of the first day of such
Interest Payment Period.
"Interest Payment Period" with respect to a Note means each
successive period from and including an Interest Payment Date with respect to
such Note (or February 3, 1997 in the case of the initial Interest Payment
Period) to, but excluding, the next Interest Payment Date or the Maturity Date,
as the case may be.
"Investment Company Event" means the receipt by the Trust of
an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
the Trust is or will be considered an investment company that is required to be
registered under the Investment Company Act of 1940, as amended, which Change in
1940 Act Law becomes effective on or after the date of original issuance of the
Capital Securities.
"LIBOR" shall have the meaning set forth in Section 2.5
"London Banking Day" means a day on which dealings in
deposits in U.S. dollars are transacted in the London interbank
market.
"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.
"Maturity Repayment Price" means the price, at the Maturity
Date, equal to the principal amount of, plus accrued interest, if any, on the
Notes.
"Non-Book-Entry Capital Securities" shall have the
meaning set forth in Section 2.4.
"Prepayment Price" shall have the meaning set forth in
Section 3.1.
"Special Event" means a Tax Event, a Capital Treatment
Event or an Investment Company Event.
"Tax Event" means that (i) the Company shall have
received an opinion of a nationally recognized independent tax
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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 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 Capital Securities, there is more than an insubstantial risk that
interest payable on the Notes is not, or within 90 days of the date thereof,
will not be deductible, in whole or in part, by the Company 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
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 Capital Securities and Common 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 Notes.
"Telerate Page 3750" means the display designated as Page 3750
on the Dow Jones Telerate Service (or such other page as may replace Page 3750
on that service or such other service or services as may be nominated by the
British Bankers Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits).
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 "Floating Rate Junior Subordinated Deferrable Interest Notes due 2027",
limited in aggregate principal amount to $515,500,000, which amount shall be as
set forth in any written order of the Company for the authentication and
delivery of Notes pursuant to Section 2.04 of the Indenture as well as in any
subsequent or supplemental written order of the Company.
SECTION 2.2 Maturity.
The Maturity Date of the Notes is January 15, 2027.
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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 one or more
fully registered securities representing 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 Third Supplemental Indenture. Payments on the Notes issued as a Global Note
will be made to the Depositary; and
(ii) if any Capital 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 Capital Security Certificate which
represents Capital Securities other than Capital Securities held by the Clearing
Agency or its nominee ("Non-Book-Entry Capital Securities") will be deemed to
represent beneficial interests in Notes presented to the Trustee by the Property
Trustee having an aggregate principal amount equal to the aggregate liquidation
amount of the Non-Book-Entry Capital Securities until such Capital Security
Certificates are presented to the Security Registrar for transfer or reissuance
at which time such Capital Security Certificates will be canceled and a Note,
registered in the name of the holder of the Capital Security Certificate or the
transferee of the holder of such Capital Security Certificate, as the case may
be, with an
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aggregate principal amount equal to the aggregate liquidation amount of the
Capital 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 Third 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 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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SECTION 2.5 Interest.
(a) Each Note will bear interest at a rate per annum equal to
(i) LIBOR plus (ii) 0.55% until the principal hereof is paid or duly made
available for payment. The initial interest rate on the Notes will be (i) LIBOR
in effect on January 30, 1997 plus (ii) 0.55%. The Company will pay interest on
the Notes quarterly in arrears on each January 15, April 15, July 15 and October
15 (each an "Interest Payment Date") commencing on April 15, 1997. Interest on
the Notes will accrue from February 3, 1997 until the principal amount is paid
and will be computed as hereinafter described. Interest payable on the Notes on
any Interest Payment Date or the Maturity Date will include interest accrued
from and including the next preceding Interest Payment Date in respect of which
interest has been paid or duly provided for or, if no interest has been paid,
from February 3, 1997, to but excluding such Interest Payment Date or Maturity
Date, as the case may be. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will be paid to the person in whose
name the Notes are registered at the close of business one Business Day prior to
such Interest Payment Date; provided, that interest payable on the Maturity Date
will be payable to the owner of the Notes at such date and provided further that
if the Notes are not in Book-Entry only form, the record date shall be the
January 1, April 1, July 1 and October 1 prior to the relevant Interest Payment
Date. Any such interest not punctually paid or duly provided for shall be
payable as provided in the Indenture.
The interest rate on the Notes will be reset quarterly. The interest
rate on the Notes for each Interest Payment Period will be determined on the
Interest Determination Date for such Interest Payment Period. The interest rate
on the Notes for each Interest Payment Period will be effective as of the first
day of such Interest Payment Period.
LIBOR and the resulting interest rate for each Interest Payment Period
will be determined by the Calculation Agent in accordance with the following
provisions:
LIBOR means a rate of interest calculated in the following order of
priority:
(1) the rate (expressed as a percentage per annum) for
Eurodollar deposits having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Interest Determination Date;
(2) if such rate does not appear on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Interest
Determination Date, LIBOR will be the arithmetic mean (if
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necessary rounded upwards to the nearest whole multiple of 0.00001%) of
the rates (expressed as percentages per annum) for Eurodollar deposits
having a three-month maturity that appear on Reuters Monitor Money
Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m. (London time) on
such Interest Determination Date;
(3) if such rate does not appear on Reuters Page LIBO as of
11:00 a.m. (London time) on the related Interest Determination Date,
the Calculation Agent will request the principal London offices of four
leading banks in the London interbank market to provide such banks'
offered quotations (expressed as percentages per annum) to prime banks
in the London interbank market for Eurodollar deposits having a
three-month maturity as of 11:00 a.m. (London time) on such Interest
Determination Date. If at least two quotations are provided, LIBOR will
be the arithmetic mean (if necessary rounded upwards to the nearest
whole multiple of 0.00001%) of such quotations;
(4) if fewer than two such quotations are provided as
requested in clause (3) above, the Calculation Agent will request four
major New York City banks to provide such banks' offered quotations
(expressed as percentages per annum) to leading European banks for
loans in Eurodollars having a three-month maturity as of 11:00 a.m.
(London time) on such Determination Date. If at least two such
quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of 0.00001%) of
such quotations; and
(5) if fewer than two such quotations are provided as
requested in clause (4) above, LIBOR will be LIBOR as determined on the
previous Interest Determination Date.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related Interest Determination Date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a
corrected rate before 12:00 noon (London time) on such Interest Determination
Date, the corrected rate as so substituted on the applicable page will be the
applicable LIBOR for such Interest Determination Date.
Absent manifest error, the Calculation Agent's determination of LIBOR
and its calculation of the applicable dividend rate for each interest period
will be final and binding.
If any Interest Payment Date for a Note falls on a day that is not a
Business Day, the Interest Payment Date will be the
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following day that is a Business Day unless such Interest Payment Date is in the
next succeeding calendar month, in which case the Interest Payment Date will be
the immediately preceding day that is a Business Day. If the Maturity Date falls
on a day that is not a Business Day, the payment of principal and interest will
be made on the next Business Day as if it were made on the date such payment was
due and no additional interest will accrue on the amount so payable for the
period from and after the Maturity Date.
The Company has appointed The Bank of New York, as Calculation Agent.
Upon the request of any holder or beneficial holder of the Notes, the
Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate that will become effective at the next Interest
Reset Date. In the absence of manifest error, such determination is binding on
all parties.
Accrued interest on any Junior Subordinated Note will be calculated by
multiplying the principal amount of such Junior Subordinated Note by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factor calculated for each day from and including February 3, 1997, or
from but excluding the last date to which interest has been paid, as the case
may be, to and including the date for which accrued interest is being
calculated. The interest factor (expressed as a decimal) for each such day is
computed by dividing the rate in effect on such day by 360. All percentages
resulting from any calculation of interest on the Junior Subordinated Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward (E.G., 5.687665% (or
.05687665) would be rounded to 5.68767% (or .0568767)), and all dollar amounts
used or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upward).
The interest rate on the Notes will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general application.
(b) If, at any time while the Property Trustee is the Holder
of any Notes, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other domestic taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Notes held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and
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the Property Trustee would have received had no such taxes, duties, assessments
or other government charges been imposed.
SECTION 2.6 Notice of Interest Rate.
Upon receipt from the Calculation Agent of a determination of
an interest rate on the Notes, the Company will promptly deliver a copy of such
determination to the Regular Trustees, the Property Trustee and the Trustee.
ARTICLE III
PREPAYMENT OF THE NOTES
SECTION 3.1 Special Event Prepayment.
If a Special Event has occurred and is continuing prior to
January 15, 2007 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 prepay the Notes, in
whole but not in part, for cash within 90 days following the occurrence of such
Special Event (the "90 Day Period") at a prepayment price equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest thereon
(including Additional Interest and Compound Interest, if any) to the Redemption
Date (the "Prepayment Price"). The Prepayment Price shall be paid prior to 12:00
noon, New York time, on the date of such repayment or such earlier time as the
Company determines, provided that the Company shall deposit with the Trustee an
amount sufficient to pay the Prepayment Price by 10:00 a.m., New York time, on
the date such Prepayment Price is to be paid.
SECTION 3.2 Optional Prepayment 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 prepay the Notes, in whole or in part, at any time and from time to
time, on or after January 15, 2007, at a redemption price equal to Prepayment
Price. Any prepayment 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
Prepayment Price. If the Notes are only partially prepaid pursuant to this
Section 3.2, the Notes will be prepaid pro rata or by lot or by any other method
utilized by the Trustee; provided, that if at the time of prepayment the Notes
are registered as a Global Note, the Depositary shall determine, in accordance
with its procedures, the principal amount of such Notes held by each Holder of
Note to be prepaid. The Prepayment Price shall be paid prior to 12:00 noon, New
York time, on the date of such prepayment or at such earlier time as the Company
determines provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Prepayment Price by 10:00
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a.m., New York time, on the date such Prepayment Price is to be
paid.
(b) If a partial prepayment of the Notes would result in the
delisting of the Capital Securities issued by the Trust from any national
securities exchange or other organization on which the Capital Securities are
then listed, the Company shall not be permitted to effect such partial
prepayment and may only prepay 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 quarterly periods (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 a rate per annum
equal to LIBOR plus 0.55% compounded quarterly for 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 quarterly periods, 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
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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 at least 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 on which the Trust is required to give notice of the
record date, or the date on which such Distributions are payable, to any
applicable self-regulatory organization or to holders of the Capital 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 any applicable self-regulatory organization or to
Holders of the Notes.
(c) The quarterly period in which any notice is given pursuant
to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarterly periods permitted in the maximum 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 and such Extended Interest Payment Period
is continuing 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 (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
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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 (including guarantees)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 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 Securities
(including commissions to the underwriters payable pursuant to the Underwriting
Agreement), 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 Third 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 Capital Securities upon
a Dissolution Election, the Company will use its best efforts to list such Notes
on any stock exchanges on which the Capital 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 The Bank of New York, as Property Trustee of NB
Capital Trust III (the "Trust"). This Note is exchangeable for Notes registered
in the name of a person other than The Bank of New York, as Property Trustee of
NB Capital Trust III or its nominee only in the limited circumstances described
in the Indenture, and no transfer of this Note may be registered except in
limited circumstances.
Unless this Note is presented by an authorized representative
of The Bank of New York, 101 Barclay 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 The Bank of New York, as Property Trustee of NB
Capital Trust III or such other name as requested by an
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authorized representative of The Bank of New York and any payment hereon is made
to The Bank of New York, as Property Trustee of NB Capital Trust III, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, The Bank of New York, as Property
Trustee of NB Capital Trust III, 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 AFFILIATE OF NATIONSBANK CORPORATION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
$_______________ CUSIP No. 638585 AX 7
No._____________ ISIN No. US 638585 AX 76
Common Code No.: 7346972
NATIONSBANK CORPORATION
FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST NOTES
DUE 2027
NATIONSBANK CORPORATION, a North Carolina corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________ or registered assigns, the principal sum of _____________ Dollars
($___________) on January 15, 2027 (the "Maturity Date"), and to pay interest on
said principal sum at a rate per annum equal to (i) LIBOR (as determined on the
reverse hereof) plus (ii) 0.55% until the principal hereof is paid or duly made
available for payment. The initial interest rate on this Note will be (i) LIBOR
in effect on January 30, 1997 plus (ii) 0.55%. The Company will pay interest on
this Note quarterly in arrears on each January 15, April 15, July 15 and October
15 (each an "Interest Payment Date") commencing on April 15, 1997. Interest on
this Note will accrue from February 3, 1997 until the principal amount is paid
and will be computed as hereinafter described. Interest payable on this Note on
any Interest Payment Date or the Maturity Date will include interest accrued
from and including the next preceding Interest Payment Date in respect of which
interest has been paid or duly provided for or, if no interest has been paid,
from February 3, 1997, to but excluding such Interest Payment Date or Maturity
Date, as the case may be. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will be paid to the person in which
name this Note (or one or more predecessor Notes evidencing all or a portion of
the same debt as this Note) is registered at the close of business on the
preceding January 1, April 1, July 1, or October 1, as the case
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may be, prior to such Interest Payment Date, whether or not a Business Day (as
defined herein) (the "Regular Record Date"); provided, that interest payable on
the Maturity Date will be payable to the owner of this Note at such date. Any
such interest not punctually paid or duly provided for shall be payable as
provided in the Indenture. In the event that any date on which interest is
payable on this Note is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or dully provided for, on any Interest Payment date
will, as provided in the Indenture, be paid to the person in whose name this
Note 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 __________ or __________]. 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
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(as defined in the Indenture) and this Note is issued subject to the provisions
of the Indenture with respect thereto. Each Holder of this Note, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Obligations, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
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: ____________________
18
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated ______________________
The Bank of New York,
as Trustee
By ______________________
Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of November 27, 1996, duly executed and delivered
between the Company and The Bank of New York, as Trustee (the "Trustee"), as
supplemented by the Third Supplemental Indenture dated as of February 3, 1997
(the "Third Supplemental Indenture"), 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
the Third Supplemental Indenture.
Upon the election of the Company at any time after January 15,
2007 or upon the occurrence and continuation of a Special Event, as defined in
the Indenture, this Note may become due and payable at a prepayment price equal
to 100% of the principal amount of this Note plus accrued and unpaid interest
thereon (including Additional Interest and Compound Interest, if any) to the
Redemption Date (the "Prepayment Price"). Any prepayment pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice,
at the Prepayment Price. If the Notes are only partially prepaid by the Company,
the Notes will be prepaid pro rata or by lot or by any other method utilized by
the Trustee; provided that if, at the time of
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prepayment, the Notes are registered as a Global Note, the Depositary shall
determine the principal amount of such Notes held by each Note holder to be
prepaid in accordance with its procedures.
The "Interest Payment Period" with respect to this Note is
each successive period from and including an Interest Payment Date with respect
to such Note (or February 3, 1997 in the case of the Initial Interest Payment
Period) to, but excluding, the next Interest Payment Date or the Maturity Date,
as the case may be. The interest rate on this Note will be reset quarterly. The
interest rate on this Note for each Interest Payment Period will be determined
on the Interest Determination Date for such Interest Payment Period. The
"Interest Determination Date" for an Interest Payment Period is two London
Banking Days (as defined below) preceding the first day of such Interest Payment
Period. The interest rate on this Note for each Interest Payment Period will be
effective as of the first day of such Interest Payment Period.
LIBOR and the resulting interest rate for each Interest
Payment Period will be determined by the Calculation Agent (described below) in
accordance with the following provisions:
LIBOR, with respect to an Interest Determination Date, means a
rate of interest calculated in the following order of priority:
(1) the rate (expressed as a percentage per annum) for
Eurodollar deposits having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Interest Determination Date;
(2) if such rate does not appear on Telerate Page 3750 as of
11:00 a.m. (London time) on the related Interest Determination Date,
LIBOR will be the arithmetic mean (if necessary rounded upwards to the
nearest whole multiple of 0.00001%) of the rates (expressed as
percentages per annum) for Eurodollar deposits having a three-month
maturity that appear on Reuters Monitor Money Rates Page LIBO ("Reuters
Page LIBO") as of 11:00 a.m. (London time) on such Interest
Determination Date;
(3) if such rate does not appear on Reuters Page LIBO as of
11:00 a.m. (London time) on the related Interest Determination Date,
the Calculation Agent will request the principal London offices of four
leading banks in the London interbank market to provide such banks'
offered quotations (expressed as percentages per annum) to prime banks
in the London interbank market for Eurodollar deposits having a
three-month maturity as of 11:00 a.m. (London time) on such
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Interest Determination Date. If at least two quotations are
provided, LIBOR will be the arithmetic mean (if necessary
rounded upwards to the nearest whole multiple of 0.00001%)
of such quotations;
(4) if fewer than two such quotations are provided as
requested in clause (3) above, the Calculation Agent will request four
major New York City banks to provide such banks' offered quotations
(expressed as percentages per annum) to leading European banks for
loans in Eurodollars having a three-month maturity as of 11:00 a.m.
(London time) on such Determination Date. If at least two such
quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of 0.00001%) of
such quotations; and
(5) if fewer than two such quotations are provided as
requested in clause (4) above, LIBOR will be LIBOR as determined on the
previous Determination Date.
If any Interest Payment Date for a Note falls on a day that is
not a Business Day, the Interest Payment Date will be the following day that is
a Business Day unless such Interest Payment Date is in the next succeeding
calendar month, in which case the Interest Payment Date will be the immediately
preceding day that is a Business Day. If the Maturity Date falls on a day that
is not a Business Day, the payment of principal and interest will be made on the
next Business Day as if it were made on the date such payment was due and no
additional interest will accrue on the amount so payable for the period form and
after the Maturity Date.
As used herein:
"Business Day" with respect to this Note means any day other
than a Saturday or Sunday that (i) is not a day on which banking institutions in
New York, New York or Charlotte, North Carolina are authorized or required by
law or regulation to be closed and (ii) is a London Banking Day.
"London Banking Day" means a day on which dealings in
deposits in U.S. dollars are transacted in the London interbank
market.
"Telerate Page 3750" means the display designated as Page 3750
on the Dow Jones Telerate Service (or such other page as may replace Page 3750
on that service or such other service or services as may be nominated by the
British Bankers Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits).
21
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The Corporation has appointed The Bank of New York as agent to
calculate interest on this Note (in such capacity, the "Calculation Agent").
Upon the request of any holder or beneficial holder of this Note, the
Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate that will become effective at the next Interest
Reset Date. In the absence of manifest error, such determination is binding on
all parties.
Accrued interest on any Junior Subordinated Note will be
calculated by multiplying the principal amount of such Junior Subordinated Note
by an accrued interest factor. Such accrued interest factor will be computed by
adding the interest factor calculated for each day from and including February
3, 1997, or from but excluding the last date to which interest has been paid, as
the case may be, to and including the date for which accrued interest is being
calculated. The interest factor (expressed as a decimal) for each such day is
computed by dividing the rate in effect on such day by 360. All percentages
resulting from any calculation of interest on the Junior Subordinated Notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward (E.G., 5.687665% (or
.05687665) would be rounded to 5.68767% (or .0568767)), and all dollar amounts
used or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upward).
The interest rate on this Note will in no event be higher than
the maximum rate permitted by New York law, as the same may be modified by
United States law of general application.
In the event of prepayment of this Note in part only, a new
Note or Notes of this series for the unrepaid 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
22
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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 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
quarterly periods (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 quarterly periods 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.
23
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As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in the
City and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any paying agent and the Security Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement 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
minimum denominations of $1,000. 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.
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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 $515,500,000 may,
upon execution of this Third Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Company,
signed by its Chief Executive Officer, Chief Financial Officer, its President,
or any Vice President or its Treasurer, without any further action by the
Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Ratification of Indenture.
The Indenture, as supplemented by this Third Supplemental
Indenture, is in all respects ratified and confirmed, and this Third
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 Third Supplemental Indenture.
SECTION 9.3 Governing Law.
This Third 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.
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SECTION 9.4 Separability.
In case any one or more of the provisions contained in this
Third 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 Third
Supplemental Indenture or of the Notes, but this Third 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 Third Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed by their authorized respective
officers as of the day and year first above written.
NATIONSBANK CORPORATION
By: /s/ Susan Y. Calton
Name: Susan Y. Calton
Title: Vice President
THE BANK OF NEW YORK
as Trustee
By /s/ Byron Merino
Name: Byron Merino
Title: Assistant Treasurer
27
AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL TRUST III
Dated as of January 22, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...........................9
SECTION 2.2 Lists of Holders of Securities............................10
SECTION 2.3 Reports by the Property Trustee...........................10
SECTION 2.4 Periodic Reports to Property Trustee......................11
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................11
SECTION 2.6 Events of Default; Waiver.................................11
SECTION 2.7 Event of Default or Nonpayment Notice.....................13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name......................................................14
SECTION 3.2 Office....................................................14
SECTION 3.3 Purpose...................................................14
SECTION 3.4 Authority.................................................14
SECTION 3.5 Title to Property of the Trust............................15
SECTION 3.6 Powers and Duties of the Regular
Trustees..................................................15
SECTION 3.7 Prohibition of Actions by the Trust
and the Trustees..........................................18
SECTION 3.8 Powers and Duties of the Property
Trustee...................................................19
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee......................................21
SECTION 3.10 Certain Rights of Property Trustee........................23
SECTION 3.11 Delaware Trustee..........................................26
SECTION 3.12 Execution of Documents....................................26
SECTION 3.13 Not Responsible for Recitals or
Issuance of Securities....................................27
SECTION 3.14 Duration of Trust.........................................27
SECTION 3.15 Mergers...................................................27
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common
Securities................................................29
SECTION 4.2 Responsibilities of the Sponsor...........................29
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Page
SECTION 4.3 Covenants of the Sponsor..................................30
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees........................................31
SECTION 5.2 Qualifications of Delaware Trustee........................31
SECTION 5.3 Property Trustee; Eligibility.............................32
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee
Generally.................................................33
SECTION 5.5 Regular Trustees..........................................33
SECTION 5.6 Appointment of Delaware Trustee...........................33
SECTION 5.7 Appointment, Removal and Resignation
of Trustees...............................................34
SECTION 5.8 Vacancies among Trustees..................................35
SECTION 5.9 Effect of Vacancies.......................................36
SECTION 5.10 Meetings..................................................36
SECTION 5.11 Delegation of Power.......................................36
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business....................................37
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.............................................37
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding
Securities................................................38
SECTION 7.2 Paying Agent..............................................39
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust......................................39
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................................40
SECTION 9.2 Transfer of Certificates..................................41
SECTION 9.3 Deemed Security Holders...................................42
SECTION 9.4 Book-Entry Interests......................................42
SECTION 9.5 Notices to Clearing Agency................................43
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Page
SECTION 9.6 Appointment of Successor Clearing
Agency....................................................43
SECTION 9.7 Definitive Capital Security
Certificates..............................................43
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................44
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................45
SECTION 10.2 Exculpation...............................................45
SECTION 10.3 Fiduciary Duty............................................46
SECTION 10.4 Indemnification...........................................47
SECTION 10.5 Outside Businesses........................................51
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year...............................................52
SECTION 11.2 Certain Accounting Matters................................52
SECTION 11.3 Banking...................................................53
SECTION 11.4 Withholding...............................................53
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................53
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent.................................56
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Property Trustee..........................................58
SECTION 13.2 Representations and Warranties of
Delaware Trustee..........................................58
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...................................................59
SECTION 14.2 Governing Law.............................................61
SECTION 14.3 Intention of the Parties..................................61
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Page
SECTION 14.4 Headings..................................................61
SECTION 14.5 Successors and Assigns....................................61
SECTION 14.6 Partial Enforceability....................................61
SECTION 14.7 Counterparts; Acceptance..................................61
ANNEX I TERMS OF SECURITIES.......................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE...........A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE............A2-1
iv
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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.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NB CAPITAL TRUST III
January 22, 1997
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of January 22, 1997 by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to this Declaration;
WHEREAS, the Trustees and the Sponsor established NB CAPITAL
TRUST III (the "Trust"), a trust under the Business Trust Act (as defined
herein) 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 gross 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 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.
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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) the following terms have the meanings given to them in the
Third Supplemental Indenture: (i) Calculation Agent, (ii) Capital
Treatment Event, (iii) Interest Determination Date, (iv) Investment
Company Event (v) LIBOR, (vi) London Banking Day, (vii) Prepayment
Price, (viii) Special Event, (ix) Tax Event, and (x) Telerate Page
3750.
(f) a term defined in the Trust Indenture Act (as defined
herein) has the same meaning when used in this Declaration unless
otherwise defined in this Declaration; 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 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
Security, 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 Saturday or Sunday
that (i) is not a day on which federal or state banking institutions in New
York, New York or Charlotte, North Carolina are authorized or required by law or
regulation to close and (ii)
is a London Banking Day.
"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.
"Capital Securities" shall mean the undivided preferred
beneficial interests in the assets of the Trust denominated as "Floating Rate
Capital Securities", the terms of which are further described in the Designation
of Terms attached as Annex I hereto.
"Capital 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).
"Capital Security Certificate" means a certificate
representing a Capital Security substantially in the form of Exhibit A-1.
"Capital Securities Guarantee" means the guarantee agreement
to be dated as of February 3, 1997, of the Sponsor in respect of the Capital
Securities.
"Certificate" means a Common Security Certificate or a
Capital 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 Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Security and which
shall undertake to effect Book-Entry transfers and pledges of the Capital
Securities.
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"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects Book-Entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" under the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange
commission.
"Common Securities" shall mean the undivided beneficial
interests in the assets of the Trust denominated as "Floating Rate Common
Securities", the terms of which are further described in Annex I hereto.
"Common Securities Guarantee" means the guarantee agreement to
be dated as of February 3, 1997, 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 hereto.
"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.
"Definitive Capital Security Certificates" has the
meaning set forth in Section 9.4
"Delaware Trustee" has the meaning set forth in Section
5.1.
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"Depositary" means The Depository Trust Company or any
successor Clearing Agency.
"Designation of Terms" has the meaning set forth in
Section 7.1(a).
"Direct Action" has the meaning specified in Section
3.8(e).
"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.
"ERISA Plan" means (i) an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended, (ii)
the assets of an individual retirement account or plan subject to Section 4975
of the Code, or (iii) any entity in which such plan invests whose assets are
deemed "plan assets."
"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 Security" has the meaning set forth in
Section 9.4.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means collectively the Indenture dated as of
November 27, 1996, between the Note Issuer and the Note Trustee and any board
resolution or supplemental indenture pursuant to which the Notes are to be
issued.
"Investment Company" means an investment company as
defined in the Investment Company Act.
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<PAGE>
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Capital 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 Capital Securities
or Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"Nonpayment" has the meaning set forth in Section
2.7(a).
"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 on behalf of the
Trust.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the
Certificate has read the covenant or condition and the
definitions relating thereto;
6
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(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.
"Paying Agent" has the meaning specified in
Section 7.2.
"Payment Amount" has the meaning set forth in
Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning set forth in Annex I hereto.
"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.
"Redemption/Distribution Notice" means a notice of any
redemption of, or a notice of any distribution of, Notes in
exchange for Securities.
"Redemption Price" means an amount equal to 100% of the
Prepayment Price.
"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
7
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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
Capital 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 Capital 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.
"Stated Maturity" shall mean January 15, 2027, the date on
which the Notes shall mature, unless previously prepaid or redeemed.
"Successor Delaware Trustee" has the meaning set forth
in Section 5.7(b).
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Successor Securities" has the meaning set forth in
Section 3.15(b)(i)(B).
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities
8
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voting together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 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.
"Third Supplemental Indenture" means the Third Supplemental
Indenture to be dated as of February 3, 1997 among the Note Issuer and the Note
Trustee.
"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 Capital Securities and related Capital Securities
Guarantees 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 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 10 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 T rustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 31 of each year, the Property
Trustee shall provide to the Holders of the Capital 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.
10
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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
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 Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital
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 Capital 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
Capital Securities arising therefrom shall be deemed to have
11
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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 Capital Securities or impair any right consequent thereon. Any waiver by the
Holders of the Capital Securities of an Event of Default with respect to the
Capital 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
Capital 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 Capital Securities and only the Holders of the Capital 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)
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and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
Subject to the foregoing provisions of this Section 2.6(b), upon such waiver,
any such default shall cease to exist and any Event of Default with respect to
the Common Securities arising therefrom shall be deemed to have been cured for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Capital
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 or Nonpayment Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default or a nonpayment of principal,
premium, if any, or interest, when due, on the Notes ("Nonpayment")
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 the Indenture or
a Nonpayment; or
(ii) any default as to which the Property T rustee
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 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, Attention: Treasurer, 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 Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Capital Securities and
no more than one series of Common Securities, and, provided further,
that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a
simultaneous issuance of both Capital Securities and Common Securities
on the Closing Date;
(b) in connection with the issue and sale of the
Capital 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 Capital 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
Capital Securities in any State in which the Sponsor has
determined to qualify or register such Capital Securities for
sale;
(iii) to determine whether to list Securities and
to execute and file an application, prepared by the Sponsor,
to any national or international stock exchange or the Nasdaq
Stock Market's National Market for listing upon notice of
issuance of any Capital
Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, if required,
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including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Capital Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting
Agreement providing for the sale of the Capital
Securities;
(c) to purchase the Notes with the proceeds of the
sale of the Capital Securities and the Common Securities;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
and with respect to, for the purposes of ss.316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of Capital 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");
(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;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent or calculation agent for the
Securities;
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(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 Capital Securities or to enable
the Trust to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited
to:
(i) causing the Trust not to be deemed to be
an Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified for
United States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Note Issuer to ensure
that the Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the
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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 Declaration,
(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
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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-interest-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 Capital Securities and Holders of the
Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee Account shall be
an account that is maintained with a banking institution the
rating of whose long-term unsecured indebtedness is at least
equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
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(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the redemption of the
Capital Securities and the Common Securities to the extent the
Notes are prepaid 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 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 Capital Securities may
institute directly a proceeding for enforcement of payment to such
Holder of the principal of, premium, if any, or interest on the Notes
having a principal amount equal to the aggregate liquidation amount of
the Capital 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 Capital Securities to the
extent of any payment made by the Note Issuer to such Holder of Capital
Securities in such Direct Action.
(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.
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(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 Paying
Agents 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 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.
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(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;
(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;
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(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 preservation 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 limitations on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Notes or the payment of any
taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be
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
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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 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 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 counsel
or other experts of its selection and the advice or opinion of
such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(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
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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 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
Declaration 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
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as would be entitled to direct the Property Trustee under the
terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying
on or acting in or accordance with such instructions;
(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 Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
ss. 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b),
including
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any amendments thereto, shall be signed by a majority of the Regular Trustees
holding office at the time of such signing.
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 January 1, 1997.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, 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,
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
obligations 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;
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(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 Capital Securities or any Successor
Securities which are Capital Securities are listed, or any
Successor Securities of the Capital Securities will be listed
upon notification of issuance, on any national or
international securities exchange or with another
organization, if any, on which the Capital Securities are then
listed or quoted;
(iv) such merger, consolidation or replacement does
not cause the Capital Securities (including any Successor
Securities of the Capital Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, consolidation 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 or
replacement);
(vi) such Successor Entity has a purpose
identical to that of the Trust;
(vii) prior to such merger, consolidation 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 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
or replacement, neither the Trust nor the Successor
Entity will be required to register as an
Investment Company; and
(C) following such merger,
consolidation or replacement, the Trust (or the
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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 Capital 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, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, merge with or
into, or replace it if such consolidation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
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 Capital 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 Capital
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;
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(c) to prepare for filing when required by the Trust an
application to any national or international stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Capital Securities if the Capital Securities are to be listed;
(d) to prepare for filing by the Trust with the Commission (i)
any required registration statement on Form 8-A relating to the
registration of the Capital Securities under Section 12(b) of the
Exchange Act, including any amendments thereto and (ii) any other
filings required under the Exchange Act;
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities
and the Capital Securities Guarantee; and
(f) to negotiate the terms of a Calculation Agency
Agreement providing for the determination of a variable
interest rate on the Notes.
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 Capital Securities remain outstanding, the
Sponsor 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 and (iii) to use its reasonable best efforts
to cause each Holder of Securities to be treated as owning an undivided
beneficial ownership interest in the assets of the Trust.
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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, the Delaware Trustee
shall be:
(a) a natural person who is a resident of the State
of Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
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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 $50,000,000, 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 Capital 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) Except during an Event of Default and subject to
Section 5.7(b), Trustees may be appointed or removed without
cause at any time:
(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 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 Delaware Trustee shall not be removed in
accordance with 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 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 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.
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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 lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees. 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
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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 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 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 and without further action by the Regular Trustees, to make a
Distribution of the Payment Amount to Holders. The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. Distributions shall be made on the Capital 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
the Capital Securities which shall have such terms as are set forth in
a completed Designation of Terms in the form attached hereto as Annex I
(the "Designation of Terms") 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.
The Trust shall issue no securities or other interests in the assets of
the Trust other than the Capital Securities and the Common Securities.
(b) The Securities are subject to redemption as
provided in the Designation 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.
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(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
Capital 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, including the
Designation of Terms.
SECTION 7.2 Paying Agent.
In the event that the Capital Securities are not in Book-Entry only
form, the Trust shall maintain in New York, New York, an office or agency where
the Capital 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 and shall make such
appointment in any other location required by law or by the rules of any
securities exchange on which the Capital Securities are listed. 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 Property Trustee shall initially act as Paying Agent for
the Capital Securities. The Trust shall initially act as Paying Agent for 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 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, Capital Securities
shall be freely transferable. Notwithstanding the
foregoing, Capital Securities may not be acquired by any
Person who is, or who in acquiring such Capital Securities
is using the assets of, an ERISA Plan unless one of the
following class exemptions or another applicable exemption
is available to the ERISA Plan: (i) Prohibited Transaction
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Class Exemption 90-1 ("PTCE 90-1"), regarding investments by insurance
company pooled separate accounts, (ii) Prohibited Transaction Class
Exemption 91-38 ("PTCE 91-38") regarding investments by bank collective
investment funds, (iii) Prohibited Transaction Class Exemption 84-14
("PTCE 84-14"), regarding transactions effected by qualified
professional asset managers, (iv) Prohibited Transaction Class
Exemption 96-23 ("PTCE 96-23"), regarding transactions effected by
in-house asset managers, or (v) Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60"), regarding investments by insurance company
general accounts. The acquisition of Capital Securities by any Person
who is, or who in acquiring such Capital Securities is using the assets
of, an ERISA Plan shall be deemed to constitute a representation by
such Person to the Trust that (i) such Person is eligible for exemptive
relief available pursuant to either one of PTCE 90-1, PTCE 91-38, PTCE
84-14, PTCE 96-23, PTCE 95-60 or another applicable exemption with
respect to the acquisition and holding of such Capital Securities, and
(ii) neither the Sponsor nor the Trust is a "fiduciary", within the
meaning of Section 3(21) of ERISA and the regulations thereunder, with
respect to such Person's interest in the Capital Securities or the
Notes.
(c) Subject to this Article IX and Section 4.3, the Sponsor
and any Related Party may only transfer 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 a 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
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated
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transferee or transferees. Every Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Regular Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled by the Regular Trustees. A transferee
of a Certificate shall be entitled to the rights and subject to the obligations
of a Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
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 Capital
Securities, the Capital Securities Certificates, on original issuance, will be
issued in the form of one or more fully registered, global Capital Security
Certificates (each a "Global Security"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Securities shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Capital Security Beneficial Owner will
receive a definitive Capital Security Certificate representing such Capital
Security Beneficial Owner's interests in such Global Securities, except as
provided in Section 9.7. Unless and until definitive, fully registered Capital
Security Certificates (the "Definitive Capital Security Certificates") have been
issued to the Capital 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 Securities and receiving
approvals, votes or consents
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hereunder) as the sole Holder of the Capital Securities and
shall have no obligation to the Capital 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;
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Capital 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 Securities to such Clearing Agency Participants; and
(e) Capital Securities sold outside the United States may be
held by the Clearing Agency for the account of Cedel Bank, societe
anonyme and Morgan Guaranty Trust Company of New York, Brussels office,
as operator of the
Euroclear System.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, unless and until Definitive
Capital Security Certificates shall have been issued to the Capital 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 Capital
Security Holders to the Clearing Agency and shall have no notice obligations to
the Capital 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 Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
SECTION 9.7 Definitive Capital Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the
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Capital 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 Capital Securities,
then:
(c) Definitive Capital Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust
with respect to such Capital Securities; and
(d) upon surrender of the Global Securities by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Capital Security Certificates to be delivered to
Capital 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 Capital 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 Capital Securities may be listed, or to
conform to usage.
Otherwise, Definitive Capital Security Certificates will not
be issued.
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.
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:
(i) be 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 Capital 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
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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,
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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 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
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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
Holders of the Common Securities.
(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 to the Holders of the Common
or Capital Securities.
(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
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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 Capital 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 or the Delaware Trustee,
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and (iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee or 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 opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the 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.
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the
Trust; 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 claim over withholding, the 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 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
Securities); and
(B) an opinion of counsel (who may be
counsel to the Sponsor or the Trust) that such
amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of
the Securities); and
(iii) to the extent the result of such
amendment would be to:
(A) cause the Trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect
the powers of the Property Trustee in contravention
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.
(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.
(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) 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) modify, eliminate and add to any provision of
this 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.
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SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Capital Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders 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
Capital 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
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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 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 Securities
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
Declaration, the terms of the Securities, the Trust Indenture
Act or the listing rules of any stock exchange on which the
Capital 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.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, 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
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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).
(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):
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NB Capital Trust III
c/o NationsBank Corporation
Attention: Treasurer
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Telecopy: (704) 386-0270
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
NationsBank Corporation
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
(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
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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.
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
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force and effect as though all of the signers had signed a single
signature page.
Each Trustee, by its execution of a counterpart of this
Declaration, acknowledges and accepts its appointment as Trustee.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ John E. Mack
John E. Mack, as Regular Trustee
/s/ William L. Maxwell
William L. Maxwell, as Regular
Trustee
/s/ Marc D. Oken
Marc D. Oken, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Walter Gitlin
Name: Walter Gitlin
Title: Authorized Signatory
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Byron Merino
Name: Byron Merino
Title: Assistant Treasurer
NATIONSBANK CORPORATION,
as Sponsor
By: /s/ Susan Y. Calton
Name: Susan Y. Calton
Title: Vice President
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ANNEX I
NB CAPITAL TRUST III
DESIGNATION OF TERMS OF
FLOATING RATE CAPITAL SECURITIES AND
FLOATING RATE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 22, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital 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) Capital Securities. 500,000 Floating Rate Capital
Securities of the Trust (liquidation amount of $1,000 per Security) with an
aggregate liquidation amount with respect to the assets of the Trust of
$500,000,000, are hereby designated for purposes of identification only as
"Floating Rate Capital Securities" (the "Capital Securities"). The Capital
Security Certificates evidencing the Capital 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 Capital
Securities are listed.
(b) Common Securities. 15,500 Floating Rate Common Securities
of the Trust (liquidation amount of $1,000 per Security) with an aggregate
liquidation amount with respect to the assets of the Trust of $15,500,000, are
hereby designated for purposes of identification only as "Floating Rate 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.
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2. Distributions.
(a) Distributions payable on each Security will be payable in
respect of the liquidation amount of $1,000 per Capital Security at a rate per
annum equal to LIBOR plus 0.55% such rate being the rate of interest payable on
the Notes to be held by the Property Trustee. 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 on the basis of
a 360-day year of twelve 30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including February 3, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (E.G., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
(b) Distributions on the Securities will be cumulative, will
accrue from February 3, 1997 and will be payable quarterly in arrears, on
January 15, April 15, July 15 and October 15 of each year, commencing on April
15, 1997, except as otherwise described below. The Note Issuer has the right
under the Indenture to defer payments of interest on the Notes by extending the
interest payment period from time to time on the Notes for a period not
exceeding 20 consecutive quarterly periods (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Notes,
provided that no Extension Period shall extend beyond the Stated Maturity. As a
consequence of such deferral, Distributions will also be deferred on the Capital
Securities for the same period. Despite such deferral, quarterly Distributions
to which Holders of such Capital Securities are entitled will accumulate
additional Distributions thereon at a rate per annum equal to LIBOR plus 0.55%,
compounded quarterly from the relevant payment date for such Distributions.
Prior to the termination of any such Extension Period, the Note Issuer may
further extend such
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<PAGE>
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarterly
periods or extend beyond the Stated Maturity. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
or the Clearing Agency, as the case may be, on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Capital 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. Payment of Distributions on the Securities held in Book-Entry only
form will be made to the Depositary in immediately available funds. The
Depositary's practice is to credit Clearing Agency Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payments on such payment date. Payments by (i) Clearing Agency
Participants and (ii) securities brokers and dealers, banks and trust companies
and other entities that clear transactions through or maintain a direct or
indirect custodial relationship with a Clearing Agency Participant (an "Indirect
Participant") to Capital Security Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Clearing Agency Participants and Indirect Participants and not of the
Depositary, the Trust or the Sponsor, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of Distributions to
the Depositary is the responsibility of the Trust, disbursement of such payments
to Clearing Agency Participants is the responsibility of the Depositary, and
disbursement of such payments to the Capital Security Beneficial Owners is the
responsibility of the Clearing Agency Participants and Indirect Participants.
The relevant record dates for the Common Securities shall be the same record
date as for the Capital Securities. If the Capital Securities shall not continue
to remain in Book-Entry only form, the regular record dates for the Capital
Securities shall be the January 1, April 1, July 1 and October 1 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
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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 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 $1,000 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.
Holders of the Common Securities will be entitled to receive distributions upon
any such dissolution Pro Rata with Holders of the Capital Securities, except
that if a Declaration Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities with
respect to such distributions.
4. Redemption and Distribution.
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(a) The Securities are subject to redemption at the Stated
Maturity, at any time after January 15, 2007 and in certain circumstances,
following the occurrence of a Special Event on or before January 15, 2007 as
follows:
(i) Upon payment of the Notes at a payment price equal to the
principal amount of, plus accrued interest on the Notes, the proceeds
from such payment shall be simultaneously applied to redeem the
Securities at the Redemption Price.
(ii) In the event of a prepayment arising from the occurrence of a
Special Event prior to January 15, 2007, the proceeds from such
prepayment shall be simultaneously applied to redeem the Capital
Securities at the Redemption Price.
(iii)If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be
redeemed Pro Rata and the Capital Securities to be redeemed will be as
described in Section 4(f)(ii) below.
(b) 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 and accrued and unpaid interest equal to accrued and unpaid Distributions
on, and having the same record date for payment as, the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interests in the Securities within 90 days following receipt of the Sponsor's
notice of election.
(c) 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 Depositary or its nominee as the
record Holder of the Capital Securities, will receive a registered Global
Security or Securities representing the Notes to be delivered upon such
distribution and any certificates representing Securities, except for
certificates representing Capital Securities held by the Depositary 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 identical interest
rate and accrued and unpaid interest equal to accrued and unpaid Distributions
on such Securities until such
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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 semi-annual 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 securities exchange, if any, on which
the Capital Securities were listed immediately prior to the distribution of the
Notes.
(f) Redemption or Distribution Procedures shall be as
follows:
(i) 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 15 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Notes. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a Redemption/
Distribution Notice shall be deemed to be given on the day such notice
is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/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 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 Capital Securities, it being
understood that, in respect of Capital Securities registered in the
name of and held of record by the Depositary or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the
distribution 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.
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(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 repaid as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Capital Securities are in Book-Entry
only form, with respect to the Capital 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 prepayment or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depositary or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Capital Securities and
will give the Depositary irrevocable instructions and authority to pay
the Redemption Price to the Holders of the Capital Securities, and (B)
with respect to Capital 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 prepayment
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 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
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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
Capital Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if the Global Securities have been
issued or, if Definitive Capital 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 Capital Securities by
tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 of this
Designation of Terms and as otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in aggregate liquidation amount of the Capital
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 Event of Default and its consequences that is waivable under
Section 5.01 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Notes shall be due and payable, or
(iv) consent to any amendment, modification or termination of the Indenture as a
holder of the Notes provided, however, that, where a consent or action under the
Indenture would require the consent or act of the Holders of greater than a
Super Majority affected thereby 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 Capital Securities which
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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 Capital 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 Capital Securities under this paragraph unless the
Property Trustee has obtained an opinion of tax counsel to the effect that for
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 a Nonpayment occurs 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 Capital Securities may institute 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 Capital Securities to the extent of any payment made by the Note
Issuer to such Holder of Capital Securities in such Direct Action.
Except as provided in this Section, the Holders of Capital
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 Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Capital 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 Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Notes in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances
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described above, any of the Capital 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) and (c), 7(a) and
(b) and 8 of this Designation of Terms or 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 Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of as 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 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 Capital 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 purposes of United
States federal income tax the Trust will not be classified as other than
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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 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
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least as 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 Capital 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
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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 as a consent under the Indenture would
require the consent of the holders of as a Super Majority, the Property Trustee
may only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Notes outstanding;
provided, further, that the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Property Trustee has obtained an opinion of tax counsel
to the effect that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on account of such
action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "pro rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, a Declaration Event
of Default has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Capital Securities
pro rata according to the aggregate liquidation amount of Capital Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Capital Securities outstanding, and only after satisfaction of all amounts owed
to the Holders of the Capital 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 Capital 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
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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 Capital Securities.
10. Listing.
Application shall be made by the Regular Trustees to list the
Capital Securities on the Luxembourg Stock Exchange. As long as the Capital
Securities are listed on any exchange, the Sponsor and the Regular Trustees
shall comply with the rules and regulations of such exchange. Unless otherwise
determined by the Regular Trustees, Capital Securities shall not be listed for
quotation on any other stock exchange.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the
Capital 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: January 22, 1997.
NATIONSBANK CORPORATION
as Sponsor
By:________________________________
Susan Y. Calton
Vice President
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Accepted:
NB Capital Trust III
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John E. Mack
Regular Trustee
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EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Security 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
Capital Security is exchangeable for Capital 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 Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Capital 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 Capital 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 AFFILIATE OF NATIONSBANK CORPORATION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Certificate Number
__-R-_____________ CUSIP No. 62874 FAA 7
ISIN No. US 62874FAA75
Common Code No. 7327838
Certificate Evidencing __________ Floating Rate Capital
Securities
of
NB CAPITAL TRUST III
Floating Rate Capital Securities
A1-1
<PAGE>
(liquidation amount $1,000 per Capital Security)
NB CAPITAL TRUST III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that CEDE &
CO. (the "Holder") is the registered owner of ________________ Capital
Securities of the Trust representing undivided preferred beneficial interests in
the assets of the Trust designated the Floating Rate Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The
Capital 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 Capital
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 January 22, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Capital 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 Capital 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 Capital
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 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 Capital
Securities as evidence of indirect beneficial ownership of the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate as
of ____________, 1997.
NB CAPITAL TRUST III
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A1-2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable
in respect of the liquidation amount of $1,000 per capital security at a rate
per annum equal to LIBOR plus 0.55%, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee on behalf of the Trust.
Distributions in arrears will continue to accumulate at the same rate,
compounded quarterly. 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 on the basis of a 360-day year of twelve
30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including February 3, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (E.G., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
Except as otherwise described below, Distributions on the
Capital Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears on January 15, April 15, July
15 and October 15 of each year, commencing on April 15, 1997 to the person in
whose name the Capital 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 January 1, April 1, July 1 or
October 1. 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 quarterly periods (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 to which Holders of such Capital Securities
are entitled will continue to accumulate additional Distributions thereon at a
rate per annum equal to LIBOR plus 0.55% compounded quarterly from the relevant
payment date for such Distributions. Prior to the termination of any such
Extension Period, the Note Issuer may
A1-3
<PAGE>
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly periods or extend beyond the maturity 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 CAPITAL SECURITIES SHALL BE REDEEMABLE AS PROVIDED
IN THE DECLARATION.
A1-4
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital 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 Capital 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 Capital Security
Certificate)
Signature Guarantee1: ___________________________________
- --------
1 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.
A1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED
SECURITIES" AS THAT TERM IS DEFINED IN RULE 144A UNDER THE ACT. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE TRUST.
THE COMMON SECURITIES REPRESENTED BY THIS CERTIFICATE ARE BENEFICIALLY OWNED BY
A PERSON WHO MAY BE AN "AFFILIATE" WITHIN THE MEANING OF RULE 144 UNDER THE ACT.
CONSEQUENTLY, THE SECURITIES MAY NOT BE TRANSFERRED UNLESS SUCH TRANSFER IS IN
COMPLIANCE WITH SAID RULE OR UNLESS MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL FOR THE
TRUST THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING AFFILIATE OF NATIONSBANK CORPORATION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Certificate Number
__-R_____________
Certificate Evidencing ___________ Floating Rate Common
Securities
of
NB CAPITAL TRUST III
Floating Rate Common Securities
(liquidation amount $1,000 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
A2-1
<PAGE>
Trust designated the Floating Rate Common Securities (liquidation amount $1,000
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 January 22,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Declaration permits the Sponsor to dissolve the Trust at any time. The Sponsor
will provide a copy of the Declaration, the 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 as of
____________ __, 1997.
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 payable
in respect of the liquidation amount of $1,000 per Capital Security at a rate
per annum equal to LIBOR plus 0.55%, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee. Distributions in
arrears will continue to accumulate at the same rate, compounded quarterly. 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 on the basis of a 360-day year of twelve 30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including February 3, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (E.G., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
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 January 15, April 15, July
15 and October 15 of each year, commencing on April 15, 1997, 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
quarterly periods (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 to which Holders of such
Common Securities are entitled will continue to accumulate additional
Distributions thereon at a rate per annum equal to LIBOR plus 0.55%, compounded
quarterly from the relevant payment date for such Distributions. 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
quarterly
A2-3
<PAGE>
periods 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.
A2-4
<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 Guarantee2: _________________________________
- --------
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.
A2-5
<PAGE>
CONSENT TO ACTION BY
REGULAR TRUSTEES OF
NB CAPITAL TRUST III
January 22, 1997
As authorized by the terms and provisions of an Amended and Restated
Declaration of Trust for NB Capital Trust III (the "Trust") dated as of January
22, 1997, the undersigned Regular Trustees hereby execute this consent to action
by the Trust:
APPROVAL OF ISSUANCE AND SALE OF FLOATING RATE CAPITAL SECURITIES
WHEREAS, the Board of Directors of NationsBank Corporation (the
"Corporation") has determined that it is advisable and in the interests of the
Corporation to raise up to $1,000,000,000 in additional equity capital on behalf
of the Corporation (the "Additional Equity"), which equity capital may take the
form of preferred securities representing undivided beneficial interests in the
assets of a trust or other entity formed by or on behalf of the Corporation; and
WHEREAS, in order to facilitate the utilization of a plan of financing
involving such preferred securities, the Corporation, as Sponsor, caused this
Trust to be formed pursuant to the terms of a Declaration of Trust dated as of
October 29, 1996, as amended and restated in its entirety by an Amended and
Restated Declaration of Trust dated as of January 22, 1997 (the "Declaration")
and a Certificate of Trust filed with the Secretary of State of Delaware on
November 1, 1996; and
WHEREAS, the Corporation and this Trust have caused the filing of a
Registration Statement on Form S-3, Registration No. 333-18273, with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, with respect to up to $1,000,000,000 aggregate principal
amount of preferred securities (the "Capital Securities") which Registration
Statement was amended by pre-effective Amendment No. 1 thereto filed with the
Commission on January 10, 1997, and declared effective on January 14, 1997 (as
so amended, the "Registration Statement"); and
WHEREAS, no stop order suspending the effectiveness of the Registration
Statement has been received by the Corporation and no proceedings for that
purpose have been instituted or threatened against the Corporation;
RESOLVED, that the Registration Statement is ratified and approved and
the Trustees hereby are authorized and empowered to execute and file all such
other instruments and documents, to make all such payments and do all such other
acts and things in
<PAGE>
connection with the Registration Statement (including the execution and filing
of any pre-effective or post-effective amendments thereto), as they may deem
necessary or advisable in order to effect such filing and to procure the
effectiveness of the Registration Statement (and any such post-effective
amendments thereto), and to make such supplements to the Prospectus forming a
part of said Registration Statement as may be required or otherwise as they may
deem advisable;
RESOLVED FURTHER, that each of John E. Mack, Paul J. Polking and
Charles M. Berger hereby is appointed attorneys-in-fact for, and each of them
with full power to act without the other hereby is authorized and empowered to
sign the Registration Statement and any amendment or amendments (including any
pre-effective or post-effective amendments) thereto on behalf of, the Trust;
RESOLVED FURTHER, that Paul J. Polking is hereby designated
as Agent for Service of the Trust with all such powers as are
provided by the Rules and Regulations of the Commission;
RESOLVED FURTHER, that any of the Trustees hereby is authorized to
determine the states or jurisdictions in which appropriate action shall be taken
to qualify or register for distribution the Capital Securities, as such Trustees
may deem advisable; that such Trustees hereby are authorized to perform on
behalf of the Trust any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such states or
jurisdictions, and in connection therewith to execute and file all requisite
papers and documents, including without limitation resolutions, applications,
reports, surety bonds, irrevocable consents and appointments of attorneys for
service of process; and the execution by such officers of any such paper or
document or the doing by them of any act in connection with the foregoing matter
shall establish conclusively their authority therefor from the Trust and the
approval and ratification by the Trust of the papers and documents so executed
and the actions so taken;
RESOLVED FURTHER, that such Trustees hereby are authorized and directed
to do any and all things which in their judgment may be necessary or appropriate
in order to obtain a permit, exemption, registration or qualification for, and a
dealer's license with respect to, the distribution of the Capital Securities in
accordance with and pursuant to the terms of any underwriting or distribution
agreements, under the securities or insurance laws of any one or more of the
states or jurisdictions as such officers may deem advisable and in connection
therewith to execute, acknowledge, verify, deliver, file and publish all
applications, reports, resolutions, consents, consents to service of process,
powers of attorneys, commitments and other papers and instruments as may be
required under such laws and to take any and all further action which they may
deem necessary or appropriate in order to secure and to maintain such permits,
2
<PAGE>
exemptions, registrations and qualifications in effect for so
long as they shall deem in the best interest of the Trust;
RESOLVED FURTHER, that if the securities or blue sky laws of any
jurisdiction or the regulations or governing authority of any exchange or
trading entity require that particular forms of resolutions covering any matter
mentioned in the preceding resolutions be adopted, all such resolutions are
hereby adopted as if the same had been so presented and adopted herein;
RESOLVED FURTHER, that in order to facilitate the operation of the
Trust, the Trustees are authorized to execute and deliver a Subscription
Agreement between the Corporation and the Trust (the "Subscription Agreement")
pursuant to which the Corporation will agree to purchase and own directly or
indirectly all of the Trust's outstanding Common Securities (the "Common
Securities");
RESOLVED FURTHER, that in order to facilitate the raising of necessary
funds, the Trustees are authorized to join with the Corporation and execute,
deliver and perform an Underwriting Agreement dated as of January 22, 1997 (the
"Underwriting Agreement") between the Corporation and the Trust and NationsBanc
Capital Markets, Inc., Bear, Stearns & Co. Inc. and Lehman Brothers, Inc., as
representatives (the "Representatives") of the several underwriters named
therein (the "Underwriters") pursuant to which the Trust will agree to issue and
sell 500,000 Capital Securities representing preferred undivided beneficial
interests in the assets of the Trust and denominated as Floating Rate Capital
Securities to the Underwriters;
RESOLVED FURTHER, that the Trustees are authorized to execute and
deliver a Note Purchase Agreement between the Corporation and the Trust (the
"NPA") pursuant to which the Corporation will sell up to an aggregate of
$515,500,000 of its Floating Rate Junior Subordinated Deferrable Interest Notes
due
2027 (the "Notes") to the Trust;
RESOLVED FURTHER, that the Trustees are authorized to execute and
deliver a Calculation Agency Agreement dated as of January 22, 1997 among the
Corporation, the Trust and The Bank of New York in connection with the
determination of the interest rate on the Notes;
RESOLVED FURTHER, that the listing of the Capital Securities on the
Luxembourg Stock Exchange (the "LSE") and the appointment of Banque Generale a
Luxembourg as listing agent for purposes of the LSE listing is hereby ratified,
confirmed and approved;
RESOLVED FURTHER, that John E. Mack, or any other Regular Trustee, be,
and hereby is authorized to take any and all steps necessary or desirable to
accomplish the LSE listing, including the preparation and filing of all
requisite listing applications,
3
<PAGE>
fee agreements, papers and documents and the payment of all fees
deemed necessary or desirable;
RESOLVED FURTHER, that the facilities of the Euroclear System
("Euroclear") and Cedel Bank, societe anonyme ("Cedel Bank") shall be used in
connection with the issue and transfer of the Capital Securities and the
execution, delivery and performance by this Corporation of engagement letters,
letters of understanding or other agreements with Euroclear and Cedel Bank is
hereby ratified and approved;
RESOLVED FURTHER, that the terms, conditions and provisions of the
Declaration, the Subscription Agreement, the Underwriting Agreement, and the NPA
are hereby ratified and approved, with such changes and upon such terms as the
Trustees executing then shall determine;
RESOLVED FURTHER, that all actions previously taken by the Trustees or
agents of the Trust in anticipation of, or in connection with the transactions
described in these resolutions, be and the same are hereby ratified, confirmed
and approved; and
RESOLVED FURTHER, that each of the Regular Trustees hereby is
authorized and directed to execute documents and certificates as such individual
deems necessary or appropriate and to do any and all things necessary,
appropriate or convenient to carry into effect the foregoing resolutions
4
RESOLUTIONS OF COMMITTEE
APPOINTED BY THE BOARD OF DIRECTORS OF
NATIONSBANK CORPORATION
January 22, 1997
Approval of Floating Rate Junior Subordinated Deferrable
Interest Notes due 2027
WHEREAS, by resolutions adopted by the Board of Directors (the "Board")
of the NationsBank Corporation (the "Corporation") at a meeting duly called and
held on December 17, 1996, this Committee was appointed by the Board (the
"Committee") with full authority to take action to raise up to $1,000,000,000 of
equity capital (the "Capital") on behalf of the Corporation; and
WHEREAS, in order to facilitate the Corporation's financing, the Board
authorized this Committee to approve the formation of special purpose financing
entities, the guaranty by the Corporation of the obligations of such entities,
the registration for sale and public sale of such obligations and the entry by
the Corporation into agreements with such entities providing for the loan of the
proceeds from the sale of such obligations to the Corporation; and
WHEREAS, as authorized by the Board on December 19, 1996, the
Corporation filed a Registration Statement on Form S-3, Registration No.
333-18273, with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended, with respect to obligations of certain
special purpose subsidiaries and guarantees and subordinated debt securities of
the Corporation, which Registration Statement was amended by pre-effective
Amendment No. 1 thereto filed on January 10, 1997, and declared effective on
January 14, 1997 (as so amended, the "Registration Statement"); and
WHEREAS, this Committee has determined to authorize the issuance of a
series of up to $515,500,000 of the Corporation's floating rate junior
subordinated deferrable interest notes as described in these resolutions; and
WHEREAS, no stop order suspending the effectiveness of the Registration
Statement has been received by the Corporation and no proceedings for that
purpose have been instituted or threatened against the Corporation;
NOW, THEREFORE, BE IT RESOLVED, that any of the Chief Executive
Officer, Chief Financial Officer, any Vice President or any Associate General
Counsel of the Corporation (each, an "Authorized Officer") is hereby authorized
to execute and deliver
<PAGE>
an Amended and Restated Declaration of Trust for NB Capital Trust III (the
"Declaration") pursuant to which the trust previously formed by the Corporation
(the "Trust") is amended and restated in its entirety to facilitate the
financing described in these resolutions;
RESOLVED FURTHER, that the selection and appointment of The Bank of New
York as Property Trustee, The Bank of New York (Delaware) as Delaware Trustee
and John E. Mack, William L. Maxwell and Marc D. Oken as Regular Trustees
(collectively, the "Trustees") of the Trust is hereby ratified and approved; and
RESOLVED FURTHER, that in order to facilitate operation of the Trust,
Authorized Officers of the Corporation are authorized to execute and deliver (i)
a Subscription Agreement between the Corporation and the Trust (the
"Subscription Agreement") pursuant to which the Corporation will agree to
purchase and own all of the Trust's outstanding Common Securities (the "Common
Securities"), (ii) a Common Securities Guarantee pursuant to which the
Corporation will guarantee the performance by the Trust of its obligations in
connection with its outstanding Common Securities (the "Common Securities
Guarantee") and (iii) a Capital Securities Guarantee pursuant to which the
Corporation will guarantee the performance by the Trust of its obligations in
connection with all of the outstanding Capital Securities of the Trust (the
"Capital Securities Guarantee" and with the Common Securities Guarantee, the
"Guarantees");
RESOLVED FURTHER, that in order to facilitate the raising of necessary
funds, the Authorized Officers are authorized to join with the Trust and to
execute an Underwriting Agreement dated as of January 22, 1997 (the
"Underwriting Agreement") among the Corporation, the Trust and NationsBanc
Capital Markets, Inc., Bear, Stearns & Co. Inc. and Lehman Brothers, Inc., as
Representatives of the underwriters described therein (collectively, the
"Underwriters") pursuant to which the Trust will agree to issue and sell up to
500,000 Floating Rate Capital Securities (liquidation amount $1,000 per
security) (the "Capital Securities" and, with the Common Securities, the
"Securities") to the Underwriters; and
RESOLVED FURTHER, that to facilitate the loan to the Corporation of the
proceeds from the sale of the Securities, the Authorized Officers are authorized
to execute and deliver (i) a Third Supplemental Indenture to be dated as of
February 3, 1997 (the "Third Supplemental Indenture") between the Corporation
and The Bank of New York as Indenture Trustee (in such capacity, the "Indenture
Trustee") to set the terms of, and authorize the issuance by the Corporation of
a series of up to $515,500,000 in aggregate principal amount of its floating
rate junior subordinated debt securities to be known as its Floating Rate Junior
Subordinated Deferrable Interest Notes due 2027 (the "Notes"), which Notes shall
be subject to the terms and entitled to the benefits of the Indenture between
the Corporation and the Indenture
2
<PAGE>
Trustee dated as of November 27, 1996 (the "Indenture"); and (ii) a Note
Purchase Agreement between the Corporation and the Trust (the "Note Purchase
Agreement") pursuant to which the Corporation will sell the Notes to the Trust;
and
RESOLVED FURTHER, that the Notes shall bear interest at a rate per
annum equal to the rate for deposits in U.S. Dollars for a three month period in
the London interbank market ("LIBOR") plus 0.55% (which rate is to be determined
by the Calculation Agent described below); that the initial interest rate on the
Notes shall be determined by the Calculation Agent on the basis of LIBOR on
January 30, 1997; that the interest rate shall be reset quarterly and accrue
from February 3, 1997, and be payable quarterly on January 15, April 15, July 15
and October 15, commencing April 15, 1997; and the Record Date for the interest
payable one Business Day prior to each interest payment date unless the Notes
are not in Book-Entry only form, in which case the record date shall be the
first day of the same calendar month in which the interest payment date occurs;
RESOLVED FURTHER, that the maturity date of the Notes shall be
January 15, 2027;
RESOLVED FURTHER, that, unless and until otherwise determined by an
Authorized Officer, The Bank of New York, initially is appointed agent for the
calculation of interest with respect to the Notes and any Authorized Officer of
the Corporation is hereby authorized and empowered to negotiate, execute and
deliver a calculation agency agreement and such other documents required by such
agent with respect to such appointment or by any other entity who may be
appointed by an Authorized Officer;
RESOLVED FURTHER, that the Notes shall be issued as Registered
Securities (as defined in the Indenture) initially in book-entry only form,
represented by one or more global notes registered in the name of The Depository
Trust Company, or its nominee, in the manner requested by the Underwriters, in
minimum denominations of $1,000, and shall be dated the date of authentication
and delivery, which date shall occur on or about February 3, 1997, and the form
of note contained in the Third Supplemental Indenture, together with such
modifications as are appropriate to reflect the determinations of this
Committee, is hereby in all respects approved;
RESOLVED FURTHER, that the Notes shall be executed in the name of and
on behalf of the Corporation by the Chief Executive Officer, or any Senior or
other Vice President, and the corporate seal shall be affixed thereon and shall
be attested by the Secretary or any Assistant Secretary, and the signatures of
the Chief Executive Officer, any Vice President, the Secretary and any Assistant
Secretary may be in the form of facsimile signatures of the current or any Chief
Executive Officer, Vice President, Secretary or Assistant Secretary, and should
any officer of the Corporation who
3
<PAGE>
signs, or whose facsimile signature appears upon, any of the Notes, cease to be
such an officer prior to the issuance of such Notes, the Notes so signed or
bearing such facsimile signature shall nevertheless be valid, and, without
prejudice to the use of the facsimile signatures of any other officer as
hereinbefore authorized, the facsimile signatures of Hugh L. McColl, Jr., Chief
Executive Officer of the Corporation, John E. Mack, Senior Vice President and
Treasurer of the Corporation, James W. Kiser, Secretary of the Corporation, and
Allison Gilliam, Assistant Secretary of the Corporation, are hereby expressly
approved and accepted;
RESOLVED FURTHER, that pursuant to the provisions of the Indenture and
the Third Supplemental Indenture each Authorized Officer is hereby authorized
and empowered to cause the Notes, upon execution thereof, to be delivered to the
Indenture Trustee under the Indenture, or to any agent designated by the
Indenture Trustee, for authentication and delivery by it and to deliver to said
Trustee or agent thereof, as the case may be, the written order of the
Corporation for the authentication and delivery of the Notes, and to negotiate,
execute and deliver any and all agreements and other documents and certificates
necessary in connection with the issuance, sale and delivery of the Notes;
RESOLVED FURTHER, that the Authorized Officers are hereby authorized to
take any and all actions necessary or appropriate to implement and carry out the
Corporation's obligations under the Declaration, including the execution and
delivery of supplements to the Indenture and Declaration and all necessary
documents and certificates in connection with such action;
RESOLVED FURTHER, that the terms, conditions and provisions of the
Declaration, the Subscription Agreement, the Guarantees, the Underwriting
Agreement, the Calculation Agency Agreement, the Indenture, the Third
Supplemental Indenture and the Note Purchase Agreement are hereby ratified and
approved, with such changes and upon such terms as the Authorized Officers
executing then shall determine;
RESOLVED FURTHER, that the listing of the Capital Securities (and if
necessary, the Notes) on the Luxembourg Stock Exchange (the "LSE") and the
appointment of Banque Generale a Luxembourg as listing agent for purposes of the
LSE listing is hereby ratified, confirmed and approved;
RESOLVED FURTHER, that officers of this Corporation, including John E.
Mack, Senior Vice President and Treasurer, Susan Y. Calton, Vice President, or
any other Authorized Officer be, and they hereby are authorized to take any and
all steps necessary or desirable to accomplish the LSE listing, including the
preparation and filing of all requisite listing applications, fee agreements,
papers and documents and the payment of all fees deemed necessary or desirable;
4
<PAGE>
RESOLVED FURTHER, that the facilities of the Euroclear System
("Euroclear") and Cedel Bank, societe anonyme ("Cedel Bank")shall be used in
connection with the issue and transfer of the Capital Securities and the
execution, delivery and performance by this Corporation of engagement letters,
letters of understanding or other agreements with Euroclear and Cedel Bank is
hereby ratified and approved;
RESOLVED FURTHER, that all actions previously taken by officers of the
Corporation in anticipation of, or in connection with the transactions described
in these resolutions, be and the same are hereby ratified, confirmed and
approved; and
RESOLVED FURTHER, that each of the Authorized Officers hereby is
authorized and directed to do any and all things necessary, appropriate or
convenient to carry into effect the foregoing resolutions.
5
NationsBank News Release
FOR IMMEDIATE RELEASE
JAN. 22, 1997 -- NationsBank Corporation announced an agreement today for
the underwritten public offering of $500 million in capital securities.
The issue is part of a shelf registration for preferred securities declared
effective by the Securities and Exchange Commission.
The annual distribution rate of LIBOR plus 55 basis points will be paid
quarterly on Jan. 15, April 15, June 15 and Oct. 15 of each year. The
offering will be sold through joint lead managers NationsBanc Capital
Markets, Inc., Bear, Stearns & Co. Inc. and Lehman Brothers. Co-lead
managers include CS First Boston, J.P. Morgan Securities Inc., Prudential
Securities Inc., Salomon Brothers Inc and UBS Securities Inc. Closing is
scheduled for Feb. 3.
Proceeds from the transaction will be used for general corporate purposes.
Following its Jan. 7, 1997, merger with Boatmen's Bancshares Inc., NationsBank
has primary retail and commercial banking operations in 16 states and the
District of Columbia. On a pro forma combined basis, NationsBank had total
assets of approximately $227 billion at year-end 1996.
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Media contact: Martha Larsh 704 388-4379
