AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL TRUST II
Dated as of December 10, 1996
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...............................................................10
SECTION 2.2 Lists of Holders of Securities.................................................................10
SECTION 2.3 Reports by the Property Trustee................................................................11
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......................................................................................15
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...............................................................................22
SECTION 3.10 Certain Rights of Property Trustee.............................................................24
SECTION 3.11 Delaware Trustee...............................................................................27
SECTION 3.12 Execution of Documents.........................................................................27
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
SECTION 4.3 Covenants of the Sponsor.......................................................................30
i
Page
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.......................................................................................33
SECTION 5.8 Vacancies among Trustees.......................................................................35
SECTION 5.9 Effect of Vacancies............................................................................35
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
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
ii
Page
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....................................................................................51
SECTION 11.2 Certain Accounting Matters.....................................................................51
SECTION 11.3 Banking........................................................................................52
SECTION 11.4 Withholding....................................................................................52
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.....................................................................................53
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent.............................................................................55
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee........................................................................................57
SECTION 13.2 Representations and Warranties of Delaware
Trustee........................................................................................58
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices........................................................................................58
SECTION 14.2 Governing Law..................................................................................60
SECTION 14.3 Intention of the Parties.......................................................................60
SECTION 14.4 Headings.......................................................................................60
SECTION 14.5 Successors and Assigns.........................................................................60
SECTION 14.6 Partial Enforceability.........................................................................60
SECTION 14.7 Counterparts; Acceptance.......................................................................60
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
iii
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.
iv
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NB CAPITAL TRUST II
December 10, 1996
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of December 10, 1996, by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established NB Capital
Trust II (the "Trust"), a trust under the 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.
1
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has
the same meaning throughout;
(c) all references to "the Declaration" or "this Dec laration"
are to this Declaration as modified, supplemented or amended from time
to time and Annex I and Exhibits A and B shall be a part of this
Declaration;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise
defined in this Declaration; and
(f) a reference to the singular includes the plural
and vice versa.
"Adjusted Treasury Rate" shall mean, with respect to any Note
prepayment date, the Treasury Rate (as defined in the Indenture) plus (i) 1.00%
if such prepayment date occurs on or before December 15, 1997 or (ii) 0.50% if
such prepayment date occurs after December 15, 1997.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereun der.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book-Entry" means a book entry by a Clearing Agency as
described in Section 9.4.
"Book-Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be
2
maintained and made through Book Entries by a Clearing Agency as described in
Section 9.4.
"Business Day" means any day other than a day on which federal
or state banking institutions in New York, New York or Charlotte, North Carolina
are authorized or obligated by law, executive order or regulation to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Securities" shall mean the undivided preferred
beneficial interests in the assets of the Trust which were referred to in the
Original Declaration as the "Preferred Securities" the terms of which are
further described in 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 December 17, 1996, of the Sponsor in respect of the Capital
Securities.
"Capital Treatment Event" has the meaning set forth in
Annex I hereto.
"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 Certificate and which
shall undertake to effect Book-Entry transfers and pledges of the Capital
Securities.
3
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects Book-Entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the "Closing Time" under the
Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commis
sion.
"Common Securities" has the meaning specified in
Section 7.1.(a).
"Common Securities Guarantee" means the guarantee agreement to
be dated as of December 17, 1996 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the 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
5.2.
"Depositary" means The Depository Trust Company or any
successor Clearing Agency.
4
"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, or
(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 the Second
Supplemental Indenture pursuant to which the Notes are to be issued.
"Investment Company" means an investment company as
defined in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in
Annex I.
5
"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 outstand ing 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.
"Maturity Redemption Price" shall mean, for a redemption of
the Securities at the Stated Maturity of the Notes, a redemption price equal to
the principal amount of, plus accrued interest on, the Notes.
"Nonpayment" has the meaning set forth in Section 2.7.
"Note Issuer" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as issuer of the Notes under the Indenture.
"Note Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a suc cessor is appointed
thereunder, and thereafter means such succes sor trustee.
"Notes" means the series of Notes to be issued by the Note
Issuer under the Indenture to be held by the Property Trustee.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certifi
cate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
6
(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.
"Optional Prepayment Price" shall mean the percentage of
outstanding principal amount of the Notes specified below, plus, in each case,
accrued interest thereon to the date of prepayment:
December 15, 2006 to December 14, 2007: 103.915%
December 15, 2007 to December 14, 2008: 103.524%
December 15, 2008 to December 14, 2009: 103.132%
December 15, 2009 to December 14, 2010: 102.741%
December 15, 2010 to December 14, 2011: 102.349%
December 15, 2011 to December 14, 2012: 101.958%
December 15, 2012 to December 14, 2013: 101.566%
December 15, 2013 to December 14, 2014: 101.175%
December 15, 2014 to December 14, 2015: 100.783%
December 15, 2015 to December 14, 2016: 100.392%
On or after December 15, 2016: 100.000%
"Optional Redemption Price" shall mean, a redemption price
equal to the Optional Prepayment Price.
"Paying Agent" has the meaning specified in Section
7.2.
"Person" means a legal person, including any individu al,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorpo rated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning set forth in Annex I hereto.
"Property Trustee" means the Trustee meeting the eligi bility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
7
"Redemption/Distribution Notice" means a notice of any
redemption of, or a notice of any distribution of, Notes in
exchange for securities.
"Redemption Price" shall mean any or all of the
Maturity Redemption Price, the Special Event Redemption Price and
the Optional Redemption 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 other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice-president, any assis tant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated offi cers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particu lar subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act.
"Second Supplemental Indenture" means the Second Supplemental
Indenture to be dated as of December 17, 1996 among the Note Issuer and the Note
Trustee.
"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.
"Special Event Redemption" has the meaning set forth in
Annex I hereto.
"Special Event Prepayment Price" shall mean, with respect to
the Notes, a prepayment price equal to the greater of (a) 100% of the principal
amount of the Securities or (b) as determined by a Quotation Agent (as defined
in the Indenture),
8
the sum of (i) the present values of the principal amount and premium that would
be payable as a part of the Optional Prepayment Price with respect to an
Optional Prepayment (as defined in the Indenture) of the Notes on December 15,
2006, and (ii) with the present values of scheduled payments of interest from
the prepayment date to December 15, 2006, in each case discounted to the
Adjusted Treasury Rate, plus, in the case of (a) or (b), accrued interest on the
Notes so prepaid up to but excluding the date of prepayment.
"Special Event Redemption Price" shall mean, a redemption
price equal to the Special Event Prepayment Price.
"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 December 15, 2026, the date on
which the Notes shall mature, unless previously prepaid or redeemed.
"Super Majority" has the meaning set forth in Sec
tion 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I
hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of out
standing Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemp tion, liquidation or otherwise, plus accrued
and unpaid Dis tributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regula tions,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provi sions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provi sions hereof, and references herein to a Trustee or the Trustees
9
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agree ment for
the offering and sale of 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.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
ss.ss. 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securi ties as equity
securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee (i) within 14 days after
each record date for payment of Distributions, a list, in such form as
the Property Trustee may reasonably require, of the names and addresses
of the Holders of the Securities ("List of Holders") as of such record
date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request
10
for a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it re
ceives in the capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obli gations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 31 of each year, the Property
Trustee shall provide to the Holders of the 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.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such docu ments, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Inden ture Act in the form, in the manner and
at the times required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Prece dent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth 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
11
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 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 Decla ration as
provided below in this Section 2.6(b), the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Ma
jority to be waived, except where the Holders of the
12
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 3 16(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Inden ture 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 express ly
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
13
prepaid, to the Holders of the Securities, notices of all Events of
Default or Nonpayments with respect to the Securities actually known to
a Responsible Officer of the Property Trustee, unless such Events of
Default or Nonpayments have been cured before the giving of such
notice;
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) an Event of Default under Section 5.01 of
the Indenture or a Nonpayment; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NB Capital Trust II," as such name may be
modified from time to time by the Regular Trustees follow ing written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
NationsBank Corporation, Attention: Corporate Treasury, 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
14
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Notes
and the Property Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undi vided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the 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;
15
(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 the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market
for listing upon notice of issuance of any Capital Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, if required, in cluding
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 acquire the Notes with the proceeds of the sale of the
Capital Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Notes to be held of
record in the name of the Property Trustee for the benefit of the
Holders of the Capital Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided that the
Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining from taking any Ministerial Action
in relation to a 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;
16
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.8(e),
the Property Trustee has the exclusive power to bring such Legal
Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary or inciden
tal to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Note Issuer of its election
to defer payments of interest on the Notes by extending the interest
payment period under the Inden ture;
(n) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf
of the Trust in all matters necessary or incidental to the
foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such exis tence is necessary to protect the
limited liability of the 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 Trust ees determine in their
discretion to be necessary or desir able in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited
to:
17
(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 pur poses,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all appli cable tax
returns and tax information reports that are re quired to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsis tent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Note Issuer.
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;
18
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Notes;
(v) possess any power or otherwise act in such
a way as to vary the Trust assets or the terms of the
Securities in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities; or
(vii) other than as provided in this Amended and
Restated Declaration, (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 declara tion that the principal of all
the Notes shall be due and payable, or (D) consent to any
amendment, modifica tion 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 insub
stantial 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).
19
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-in
terest bearing trust account (the "Property Trustee Ac count")
in the name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Notes
held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of
the Capital Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section
6.1. Any accrued Distributions paid by the purchaser of any
Additional Securities shall be deposited in the Property
Trustee Account. Funds in the Property Trustee Account shall
be held uninvested until dis bursed in accordance with this
Declaration. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Capital Securities by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities
Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the re demption of the
Capital Securities and the Common Securities to the extent the
Notes are redeemed or ma ture; and
(iii) upon written notice of distribution issued by
the Regular Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Notes to Holders of Securities upon the occurrence of certain
special events (as may be de fined in the terms of the
Securities) or other speci fied circumstances pursuant to the
terms of the Securi ties.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's du ties and obligations under this Declaration or
the Trust Indenture Act; provided however, that if a Nonpayment has
20
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 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.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Notes
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Property Trustee occurs and is continuing,
the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Notes subject to the
rights of the Holders pursuant to the terms of such Securi ties.
(h) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, 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.
(j) The Property Trustee shall have the right to
appoint a Quotation Agent (as defined in the Indenture).
21
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the pur poses and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) of which a Responsible Officer of the
Property Trustee has actual knowledge, the Property Trustee shall
exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exer cise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be con strued to
relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of De fault
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and the
Property Trustee shall not be liable except for the
performance of such duties and obliga tions as are
specifically set forth in this Declaration, and no
implied covenants or obliga tions shall be read
into this Declaration against the Property Trustee;
and
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certifi cates or
opinions furnished to the Property Trustee and
conforming to the requirements of
22
this Declaration; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be
under a duty to examine the same to de termine
whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Re sponsible
Officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall re
quire the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exer cise of any of
its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with re spect
to the custody, safekeeping and physical pres ervation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and limita tions on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuine ness,
existence or sufficiency of the Notes or the payment of any
taxes or assessments levied thereon or in connection
therewith;
23
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segre gated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be re
sponsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under
this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting
upon any resolution, certificate, state ment, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document be lieved by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) 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 desir able
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 in strument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
24
(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 admin istration of this
Declaration from any court of com petent jurisdiction;
(vi) the Property Trustee shall be under no ob
ligation to exercise any of the rights or powers vested in it
by this Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Property Trustee
security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Property
Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or
direction, including such reasonable advances as may be
requested by the Property Trustee provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occur rence 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 fur ther inquiry or investigation into such facts or
mat ters 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;
25
(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 suffi cient and effective to perform
any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act
or as to its compliance with any of the terms and provisions
of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such
action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desir able to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request in structions from the Holders of the
Securities which instructions may only be given by the Holders
of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under the
terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other ac tion until such instructions are
received, and (iii) shall be protected in conclusively relying
on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discre tionary under the
provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Declaration.
(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.
26
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be enti tled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
ss. 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b),
including 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 correct ness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficien cy of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from November 1, 1996.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, 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
27
a trust organized as such under the laws of any State;
provided that:
(i) if the Trust is not the survivor, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obli
gations of the Trust under the Securities; or
(B) substitutes for the Securities oth er
securities having substantially the same terms as
the Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Securities rank with re spect to Distributions and
payments upon liquidation, redemption and
otherwise;
(ii) the Note Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same 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 nation al 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 (oth er 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 iden
tical 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:
28
(A) such merger, consolidation or re
placement does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to
any dilution of the Holders' interest in the new
entity);
(B) following such merger, consolida tion
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 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 liquida tion 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:
29
(a) to prepare for filing by the Trust with the Com-
mission 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;
(c) to prepare for filing when required by the Trust an
application to the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon notice of
issuance of any Capital Securities if the Capital Securities are to be
listed;
(d) to prepare for filing by the Trust with the Commission
any required registration statement on Form 8-A re lating to the
registration of the Capital Securities under Section 12(b) of the
Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities
and the Capital Securities Guarantee.
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
Company will covenant (i) to maintain 100% direct or indirect ownership of the
Common Securities, (ii) to use its reasonable best efforts to cause the Trust
(a) to remain a statutory business trust, except as permitted by this
Declaration in connection with the Trust's liquidation, merger, or
consolidation, and (b) to not be classified as an association taxable as a
corporation or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes and (iii) to use its reasonable best efforts
to cause each Holder of Trust Securities to be treated as owning an undivided
beneficial ownership interest in the assets of the Trust.
30
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees of this Trust shall be five, and:
(a) at any time before the issuance of any Securi-
ties, the Sponsor may, by written instrument, increase or
decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that, the number of Trustees shall in no event be less than
two; provided further that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or
that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware (the "Delaware Trustee");
(2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3)
one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if
it meets the applicable requirements.
SECTION 5.2 Qualifications of Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State
of Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
31
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.
32
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).
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
33
(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 Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a Successor
Property Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(a)
until a successor Trustee possessing the qualifications to act
as Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that
acts as the Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) until the assets of the Trust have
been completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
34
(ii) no such resignation of the Trustee that acts
as the Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware
Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee as the case may be if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evi dence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bank ruptcy,
dissolution, liquidation, incompetence or incapacity to 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
35
the powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of a Regular Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Regular
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been law
fully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. Any
and all actions of the Regular Trustees also may be evidenced by a written
consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age
of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the
doing of such things and the execution of such instruments either in
the name of the Trust or the names of the Regular Trustees or otherwise
as
36
the Regular Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) at the
times and in accordance with the applicable terms of the relevant Holder's
Securities. If and to the extent that the Note Issuer makes a payment of
interest (including Compounded Interest, as defined in the Indenture) and
Additional Interest (as defined in the Indenture), premium and/or principal on
the Notes held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose and without further action by the Regular
Trustees, to make a distribution (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.
37
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 as Annex I (the
"Capital Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such
terms as are set forth in a completed designation of Terms in the form
attached as Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Capital Securities and the Common Securities.
(b) The Securities are subject to redemption as
provided in Annex I.
(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.
38
(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.
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. The term "Paying Agent"
includes any additional paying agent. The Trust may change any Paying Agent
without prior notice to any Holder. The Trust shall notify the Property Trustee
of the name and address of any Agent not a party to this Declaration. If the
Trust fails to appoint or maintain another entity as Paying Agent, the Property
Trustee shall act as such. The Trust or any of its Affiliates may act as Paying
Agent. The Trust shall initially act as Paying Agent for the Capital Securities
and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of disso-
lution or its equivalent with respect to the Sponsor; upon the
consent of a Majority in liquidation amount of the Securities
voting together as a single class to dissolve the Trust or the
revocation of the Sponsor's charter and the expiration of 90
days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial
dissolution of the Holder of the Common Securities, the
Sponsor or the Trust;
39
(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 Class Exemption
90-1 ("PTE 90-1"), regarding investments by insurance company pooled
separate accounts, (ii) Prohibited Transaction Class Exemption 91-38
("PTE 91-38") regarding investments by bank collective investment
funds, (iii) Prohibitive Transaction Class Exemption 84-14 ("PTE
84-14"),
40
regarding transactions effected by qualified professional asset
managers, (iv) Prohibited Transaction Class Exemption 96-23 ("PTE
96-23"), regarding transactions effected by in-house asset managers, or
(v) Prohibited Transaction Class Exemption 95-60 ("PTE 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 PTE 90- 1, PTE 91-38, PTE 84-14, PTE 96-23,
PTE 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 indem nity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any Certifi-
cate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall
41
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 hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Securities and shall have
no obligation to the Capital Security Beneficial Owners;
42
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the 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.
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 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:
43
(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 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 conclu-
sively 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, num
bers 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.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certifi
cates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any
Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to
keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
44
Otherwise, Definitive Capital Security Certificates will not
be issued.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declara-
tion, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the 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 incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such In
demnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or
negligence in the case of the Trustee) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as
to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been
45
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,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or provided by
the Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the Indem-
nified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified
Person is permitted or required to make a decision:
46
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Note Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon
a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Note Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and
expenses) actu-
47
ally and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust and except that
no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person
shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the
settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense
of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a court) shall
be made by the Note Issuer only as authorized in the specific
case upon a determination that indemnification of the Company
Indemnified Person is proper in the circumstances because he
has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Note Issuer
in advance of the final
48
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
proceed ing, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately
breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be deemed
exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested
directors of the Note Issuer or 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,
49
whether or not the Note Issuer would have the power to
indemnify him against such liability under the provisions of
this Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the
resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent
entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a person.
(b) The Note Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Property Trustee and the Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each 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.
50
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, indepen dently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor,
the Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such oppor-
tunity is of a character that, if presented to the Trust, could be taken by the
Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year or such other year as is required by the Code.
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;
51
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end of
such Fiscal Year, and the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each
Holder as is required by the Code and the Treasury Regulations. Not-
withstanding any right under the Code to deliver any such statement at
a later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the
Trust; and
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required
by United States federal income tax law, and any other annual income
tax returns required to be filed by the Regular Trustees on behalf of
the Trust with any state or local taxing authority.
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
52
Holder to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are
more than two Regular Trustees a majority of the
Regular Trustees); and
(ii) if the amendment affects the rights, pow-
ers, duties, obligations or immunities of the Property
Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, pow-
ers, duties, obligations or immunities of the Delaware
Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such pur-
ported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
(A) an Officers' Certificate from each
of the Trust and the Sponsor that such amendment
53
is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Se-
curities); and
(B) an opinion of counsel (who may be
counsel to the Sponsor or the Trust) that such
amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of
the Securities); and
(iii) to the extent the result of such amend-
ment would be to:
(A) cause the trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect
the powers of the Property Trustee in con
travention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(c) at such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the
rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities;
(d) Section 10.1(b) and this Section 12.1 shall not
be amended without the consent of all of the Holders of the
Securities;
(e) Article IV shall not be amended without the con-
sent of the Holders of a Majority in liquidation amount of
the Common Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declar-
tion may be amended without the consent of the Holders of
the Securities to:
(i) cure any ambiguity;
54
(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 ob-
ligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or any
written change in interpretation or application of Rule 3a-5
by any legislative body, court, government agency or
regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision
of the Amended Declaration to such extent as may be necessary
to carry out its provisions, including making any redemption
of the Notes or dissolution of the Trust and distribution of
the Notes to the Holders of the Securities in exchange for all
of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of
this Declaration, the terms of the Securities or the rules of any
stock 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 ap
ply to meetings of Holders of Securities:
55
(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 neces sary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written
ballot submitted to the Security 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 relat ing to proxies,
and judicial interpretations there under, 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 Securi-
ties shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Decla-
ration, the terms of the Securities, the Trust
Indenture Act or the listing rules of any stock
56
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 estab-
lishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, 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
57
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee, of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trust ee, 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
58
shall be delivered, telecopied or mailed by first class mail, as
follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Securities):
NB Capital Trust II
c/o NationsBank Corporation
Attention: Corporate Treasury
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.
59
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
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
60
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
Each Trustee, by its execution of a counterpart of this
Declaration, acknowledges and accepts its appointment as Trustee.
61
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/ JOSEPH G. ERNST
Name: Joseph G. Ernst
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ BYRON MERINO
Name: Byron Merino
Title:
NATIONSBANK CORPORATION,
as Sponsor
By: /s/ SUSAN Y. CALTON
Name: Susan Y. Calton
Title: Vice President
62
ANNEX I
NB CAPITAL TRUST II
DESIGNATION OF TERMS OF
7.83% CAPITAL SECURITIES AND
7.83% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of December 10, 1996 (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. 365,000 Capital Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of $365,000,000 and a liquidation amount with respect to the assets of the
Trust of $1,000 per Capital Security, are hereby designated for the purposes of
identification only as "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. 11,300 Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
$11,300,000 and a liquidation amount with respect to the assets of the Trust of
$1,000 per common security, are hereby designated for the purposes of identifica
tion only as "Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
of Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
I-1
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of 7.83% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Security, such rate being the rate of interest payable on the Notes
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). A Distribution is
payable only to the extent that payments are made in respect of the Notes held
by the Property Trustee and to the extent the Property Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semi-annual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semi-annual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will
accrue from December 17, 1996, and will be payable semi-annually in arrears, on
June 15 and December 15 of each year, commencing on June 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 10 consecutive
semi-annual 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 last beyond the Stated Maturity. As a consequence of such defer-
ral, Distributions will also be deferred on the Capital Securities for the same
period. Despite such deferral, semi-annual Distributions will continue to accrue
with interest there on (to the extent permitted by applicable law) at the Coupon
Rate compounded semi-annually during any such Extension Period. Prior to the
termination of any such Extension Period, the Note Issuer may further extend
such Extension Period; provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 10 consecutive
semi-annual 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
I-2
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Notes. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment
in respect of the Capital Securities will be made as described under the heading
"Description of the Capital Securities -- Book-Entry Only Issuance -- The
Depository Trust Company" in the Prospectus Supplement dated December 10, 1996,
to the Prospectus dated November 27, 1996 (together, the "Prospectus"), of the
Trust included in the Registration Statement on Form S-3 of the Sponsor, the
Trust and certain other business trusts. The relevant record dates for the
Common Securities shall be the same record date as for the 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 June 1 and
December 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 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
I-3
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. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution Pro Rata with the 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.
(a) The Securities are subject to redemption at any time after
December 15, 2006 and in certain circumstances, following the occurrence of a
Special Event as follows:
(i) Upon payment of the Notes at a payment price equal to the
principal amount of, plus accrued interest on the Notes at the Stated
Maturity, the proceeds from such payment shall be simultaneously
applied to redeem the Securities at the Maturity Redemption Price.
(ii) In the event of a Special Event Prepayment prior to December
15, 2006, the proceeds from such Special Event Prepayment shall be
simultaneously applied to redeem the Capital Securities at the Special
Event Redemption Price.
(iii) The Securities may also be redeemed in whole or in part on or
after December 15, 2006, contemporaneously with an optional prepayment
of the Notes at a redemption price equal to the Optional Redemption
Price. 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
I-4
the Property Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as, the
Securities, to be distributed to the Holders of the Securities in liquidation of
such Holders' interests in the Securities within 90 days following receipt of
the Sponsor's notice of election.
(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
certificate or certificates 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 interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Securities until such certificates are
presented to the Note Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all 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 Redemp-
I-5
tion/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing
in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of 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.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Notes are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the 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 redemption 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 redemption
or maturity of the Notes, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records
of the Trust on the redemption date. If a Redemption/Distribution
Notice shall have been given and funds 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
I-6
Securities to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees nor the Trust shall
be required to register or cause to be registered the transfer of any
Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is improp-
erly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Capital Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates 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 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
I-7
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, or (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
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
the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If 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 in the Trust 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
I-8
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 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 con sent, 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 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
I-9
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 the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may, to the extent permitted by
applicable law, institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Notes in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the disso-
I-10
lution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least 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
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
I-11
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 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.
Unless otherwise determined by the Regular Trustees Capital
Securities shall not be listed for quotation on any 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.
I-12
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, 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 December 10, 1996.
NATIONSBANK CORPORATION
as Sponsor
By:________________________________
Susan Y. Calton
Vice President
Accepted:
- ----------------------
John E. Mack
Regular Trustee
I-13
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This 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 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 OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
Certificate Number
II-R-_____________ CUSIP NO. _____________
Certificate Evidencing __________ Capital Securities
of
NB CAPITAL TRUST II
__% Capital Securities
(liquidation amount $1,000 per Capital Security)
A1-1
NB CAPITAL TRUST II, 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 bene ficial interests in the assets of the Trust
designated the ____% 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 December 10, 1996, 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 Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate as
of December ___, 1996.
NB CAPITAL TRUST II
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A1-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $1,000 per Capital Security, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear interest thereon
compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). A Distribution is payable only to the extent that payments are
made in respect of the Notes held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semi-annual Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full semi-annual Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the
Capital Securities will be cumulative, will accrue from the date of original
issuance and will be payable semi-annually in arrears on June 15 and December 15
of each year, commencing on June 15, 1997, to the person in whose name their
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 June 1 or December 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 10 consecutive semi-annual 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, semi-annual Dis-
tributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded semi-annually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Note Issuer may further extend such Extension Period; provided that
such Exten sion Period together with all such previous and further exten sions
thereof may not exceed 10 consecutive semi-annual 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.
A1-3
---------------------
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, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or partici
pation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A1-4
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 OR NONBANKING AFFILIATE OF NATIONSBANK
CORPORATION (EXCEPT TO THE EXTENT THAT IT IS GUARANTEED BY NATIONSBANK
CORPORATION AS DESCRIBED HEREIN) AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
Certificate Number
II-R_____________
Certificate Evidencing ___________ Common Securities
of
NB CAPITAL TRUST II
___% Trust Originated Common Securities
(liquidation amount $1,000 per Common Security)
NB CAPITAL TRUST II, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
NATIONSBANK CORPORATION (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust desig-
A2-1
2
nated the _____% Common Securities (liquidation amount
$1,000 per Common Security) (the "Common Securities"). The Common Securi ties
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 December __,
1996, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Declaration permits the Sponsor to dissolve the Trust at any time. The Sponsor
will provide a copy of the Declaration, the 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
December __, 1996.
NB CAPITAL TRUST II
By:_______________________________
Name: John E. Mack
Title: Regular Trustee
A2-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of ____% (the "Coupon Rate") of the stated liquidation amount
of $1,000 per Common Security, such rate being the rate of interest payable on
the Notes to be held by the Property Trustee. Distributions in arrears for more
than one semi-annual period will bear interest thereon compounded semi-annually
at the Coupon Rate (to the extent permitted by applicable law). A Distribution
is payable only to the extent that payments are made in respect of the Notes
held by the Property Trustee and to the extent the Property Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semi-annual Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full semi-annual
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable semi-annually in arrears on June 15 and December 15
of each year, commencing on June 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 10 consecutive semi-annual 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, semi-annual Dis tributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded semiannually during any such Extension Period. Prior to the
termination of any such Extension Period, the Note Issuer may further extend
such Extension Period; provided that such Exten sion Period together with all
such previous and further exten sions thereof may not exceed 10 consecutive
semi-annual 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.
A2-3
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints ________________________________________
- -----------------------------------------------------------------
______________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: _________________________________
- --------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or partici pation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in substi
tution for, STAMP, all in accordance with the Securities and Exchange
Act of 1934, as amended.
A2-4