AMENDED AND RESTATED DECLARATION
OF TRUST
NB CAPITAL TRUST III
Dated as of January 22, 1997
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...........................9
SECTION 2.2 Lists of Holders of Securities............................10
SECTION 2.3 Reports by the Property Trustee...........................10
SECTION 2.4 Periodic Reports to Property Trustee......................11
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................11
SECTION 2.6 Events of Default; Waiver.................................11
SECTION 2.7 Event of Default or Nonpayment Notice.....................13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name......................................................14
SECTION 3.2 Office....................................................14
SECTION 3.3 Purpose...................................................14
SECTION 3.4 Authority.................................................14
SECTION 3.5 Title to Property of the Trust............................15
SECTION 3.6 Powers and Duties of the Regular
Trustees..................................................15
SECTION 3.7 Prohibition of Actions by the Trust
and the Trustees..........................................18
SECTION 3.8 Powers and Duties of the Property
Trustee...................................................19
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee......................................21
SECTION 3.10 Certain Rights of Property Trustee........................23
SECTION 3.11 Delaware Trustee..........................................26
SECTION 3.12 Execution of Documents....................................26
SECTION 3.13 Not Responsible for Recitals or
Issuance of Securities....................................27
SECTION 3.14 Duration of Trust.........................................27
SECTION 3.15 Mergers...................................................27
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common
Securities................................................29
SECTION 4.2 Responsibilities of the Sponsor...........................29
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Page
SECTION 4.3 Covenants of the Sponsor..................................30
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees........................................31
SECTION 5.2 Qualifications of Delaware Trustee........................31
SECTION 5.3 Property Trustee; Eligibility.............................32
SECTION 5.4 Certain Qualifications of Regular
Trustees and Delaware Trustee
Generally.................................................33
SECTION 5.5 Regular Trustees..........................................33
SECTION 5.6 Appointment of Delaware Trustee...........................33
SECTION 5.7 Appointment, Removal and Resignation
of Trustees...............................................34
SECTION 5.8 Vacancies among Trustees..................................35
SECTION 5.9 Effect of Vacancies.......................................36
SECTION 5.10 Meetings..................................................36
SECTION 5.11 Delegation of Power.......................................36
SECTION 5.12 Merger, Conversion, Consolidation or
Succession to Business....................................37
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.............................................37
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding
Securities................................................38
SECTION 7.2 Paying Agent..............................................39
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust......................................39
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities....................................40
SECTION 9.2 Transfer of Certificates..................................41
SECTION 9.3 Deemed Security Holders...................................42
SECTION 9.4 Book-Entry Interests......................................42
SECTION 9.5 Notices to Clearing Agency................................43
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Page
SECTION 9.6 Appointment of Successor Clearing
Agency....................................................43
SECTION 9.7 Definitive Capital Security
Certificates..............................................43
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................44
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................45
SECTION 10.2 Exculpation...............................................45
SECTION 10.3 Fiduciary Duty............................................46
SECTION 10.4 Indemnification...........................................47
SECTION 10.5 Outside Businesses........................................51
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year...............................................52
SECTION 11.2 Certain Accounting Matters................................52
SECTION 11.3 Banking...................................................53
SECTION 11.4 Withholding...............................................53
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................53
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent.................................56
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Property Trustee..........................................58
SECTION 13.2 Representations and Warranties of
Delaware Trustee..........................................58
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices...................................................59
SECTION 14.2 Governing Law.............................................61
SECTION 14.3 Intention of the Parties..................................61
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Page
SECTION 14.4 Headings..................................................61
SECTION 14.5 Successors and Assigns....................................61
SECTION 14.6 Partial Enforceability....................................61
SECTION 14.7 Counterparts; Acceptance..................................61
ANNEX I TERMS OF SECURITIES.......................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE...........A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE............A2-1
iv
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)........................................................ 5.3(a)
310(c)........................................................ Inapplicable
311(c)........................................................ Inapplicable
312(a)........................................................ 2.2(a)
312(b)........................................................ 2.2(b)
313........................................................... 2.3
314(a)........................................................ 2.4
314(b)........................................................ Inapplicable
314(c)........................................................ 2.5
314(d)........................................................ Inapplicable
314(f)........................................................ Inapplicable
315(a)........................................................ 3.9(b)
315(c)........................................................ 3.9(a)
315(d)........................................................ 3.9(a)
316(a)........................................................ Annex I
316(c)........................................................ 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the inter pretation of any of its terms or
provisions.
v
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NB CAPITAL TRUST III
January 22, 1997
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of January 22, 1997 by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to this Declaration;
WHEREAS, the Trustees and the Sponsor established NB CAPITAL
TRUST III (the "Trust"), a trust under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated as of October 29, 1996, (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 1, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the gross proceeds thereof in
certain Notes of the Note Issuer (each as defined herein);
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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 Declaration"
are to this Declaration as modified, supplemented or amended from time
to time and Annex I and Exhibits A and B shall be a part of this
Declaration;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and
Sections of and Annexes and Exhibits to this Declaration
unless otherwise specified;
(e) the following terms have the meanings given to them in the
Third Supplemental Indenture: (i) Calculation Agent, (ii) Capital
Treatment Event, (iii) Interest Determination Date, (iv) Investment
Company Event (v) LIBOR, (vi) London Banking Day, (vii) Prepayment
Price, (viii) Special Event, (ix) Tax Event, and (x) Telerate Page
3750.
(f) a term defined in the Trust Indenture Act (as defined
herein) has the same meaning when used in this Declaration unless
otherwise defined in this Declaration; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book-Entry" means a book-entry by a Clearing Agency as
described in Section 9.4.
2
"Book-Entry Interest" means a beneficial interest in a Global
Security, ownership and transfers of which shall be maintained and made through
Book Entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or Sunday
that (i) is not a day on which federal or state banking institutions in New
York, New York or Charlotte, North Carolina are authorized or required by law or
regulation to close and (ii)
is a London Banking Day.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss.3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Securities" shall mean the undivided preferred
beneficial interests in the assets of the Trust denominated as "Floating Rate
Capital Securities", the terms of which are further described in the Designation
of Terms attached as Annex I hereto.
"Capital Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Security Certificate" means a certificate
representing a Capital Security substantially in the form of Exhibit A-1.
"Capital Securities Guarantee" means the guarantee agreement
to be dated as of February 3, 1997, of the Sponsor in respect of the Capital
Securities.
"Certificate" means a Common Security Certificate or a
Capital Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Security and which
shall undertake to effect Book-Entry transfers and pledges of the Capital
Securities.
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
commission.
"Common Securities" shall mean the undivided beneficial
interests in the assets of the Trust denominated as "Floating Rate Common
Securities", the terms of which are further described in Annex I hereto.
"Common Securities Guarantee" means the guarantee agreement to
be dated as of February 3, 1997, of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2 hereto.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at 101 Barclay Street, Floor 21 West, New
York, New York 10286.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent
of (i) the Trust or (ii) the Trust's Affiliates; and (b) any
Holder of Securities.
"Definitive Capital Security Certificates" has the
meaning set forth in Section 9.4
"Delaware Trustee" has the meaning set forth in Section
5.1.
4
"Depositary" means The Depository Trust Company or any
successor Clearing Agency.
"Designation of Terms" has the meaning set forth in
Section 7.1(a).
"Direct Action" has the meaning specified in Section
3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"ERISA Plan" means (i) an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended, (ii)
the assets of an individual retirement account or plan subject to Section 4975
of the Code, or (iii) any entity in which such plan invests whose assets are
deemed "plan assets."
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b).
"Global Security" has the meaning set forth in
Section 9.4.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means collectively the Indenture dated as of
November 27, 1996, between the Note Issuer and the Note Trustee and any board
resolution or supplemental indenture pursuant to which the Notes are to be
issued.
"Investment Company" means an investment company as
defined in the Investment Company Act.
5
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Capital Securities
or Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"Nonpayment" has the meaning set forth in Section
2.7(a).
"Note Issuer" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as issuer of the Notes under the Indenture.
"Note Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Notes" means the series of Notes to be issued by the Note
Issuer under the Indenture to be held by the Property Trustee on behalf of the
Trust.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the
Certificate has read the covenant or condition and the
definitions relating thereto;
6
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Paying Agent" has the meaning specified in
Section 7.2.
"Payment Amount" has the meaning set forth in
Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning set forth in Annex I hereto.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Redemption/Distribution Notice" means a notice of any
redemption of, or a notice of any distribution of, Notes in
exchange for Securities.
"Redemption Price" means an amount equal to 100% of the
Prepayment Price.
"Regular Trustee" has the meaning set forth in
Section 5.1.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly-owned subsidiary of the Sponsor or any
7
other Person that owns, directly or indirectly, 100% of the outstanding voting
securities of the Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act.
"Securities" means the Common Securities and the
Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities
Guarantee and the Capital Securities Guarantee.
"Sponsor" means NationsBank Corporation, a North Carolina
corporation, or any successor entity in a merger or consolidation, in its
capacity as sponsor of the Trust.
"Stated Maturity" shall mean January 15, 2027, the date on
which the Notes shall mature, unless previously prepaid or redeemed.
"Successor Delaware Trustee" has the meaning set forth
in Section 5.7(b).
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Successor Securities" has the meaning set forth in
Section 3.15(b)(i)(B).
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities
8
voting together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Third Supplemental Indenture" means the Third Supplemental
Indenture to be dated as of February 3, 1997 among the Note Issuer and the Note
Trustee.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Capital Securities and related Capital Securities
Guarantees among the Sponsor, the Trust and the Underwriters named therein.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture
Act.
9
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
ss.ss. 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee (i) within 10 days after
each record date for payment of Distributions, a list, in such form as
the Property Trustee may reasonably require, of the names and addresses
of the Holders of the Securities ("List of Holders") as of such record
date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List
of Holders as of a date no more than 14 days before such List of
Holders is given to the Property T rustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity)
provided that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after March 31 of each year, the Property
Trustee shall provide to the Holders of the Capital Securities such reports as
are required by ss. 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by ss. 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act.
10
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital
Securities and its consequences, provided that, if the underlying Event
of Default under the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Notes (a
"Super Majority") to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of the Holders of at least the proportion in liquidation
amount of the Capital Securities that the relevant Super
Majority represents of the aggregate principal amount of the
Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have
11
been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or an Event of Default with respect to
the Capital Securities or impair any right consequent thereon. Any waiver by the
Holders of the Capital Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a waiver by the Holders of
the Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the Common
Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal
amount of the Notes outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A)
12
and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
Subject to the foregoing provisions of this Section 2.6(b), upon such waiver,
any such default shall cease to exist and any Event of Default with respect to
the Common Securities arising therefrom shall be deemed to have been cured for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Capital
Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c)
shall be in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and
such ss. 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
SECTION 2.7 Event of Default or Nonpayment Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default or a nonpayment of principal,
premium, if any, or interest, when due, on the Notes ("Nonpayment")
transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all Events of Default or Nonpayments with
respect to the Securities actually known to a Responsible Officer of
the Property Trustee, unless such Events of Default or Nonpayments have
been cured before the giving of such notice;
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) an Event of Default under the Indenture or
a Nonpayment; or
(ii) any default as to which the Property T rustee
shall have received written notice or of which a Responsible
Officer of the Property Trustee charged with the
administration of the Declaration shall have
actual knowledge.
13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NB Capital Trust III," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
NationsBank Corporation, Attention: Treasurer, NationsBank Corporate Center, 100
North Tryon Street, 23rd Floor, Charlotte, North Carolina 28255. On 10 Business
Days written notice to the Holders of Securities, the Regular Trustees may
designate another
principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Notes, and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
14
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Notes
and the Property Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Capital Securities and
no more than one series of Common Securities, and, provided further,
that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a
simultaneous issuance of both Capital Securities and Common Securities
on the Closing Date;
(b) in connection with the issue and sale of the
Capital Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a
registration statement on Form S-3 prepared by the
Sponsor, including any amendments thereto, pertaining
to the Capital Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Capital Securities in any State in which the Sponsor has
determined to qualify or register such Capital Securities for
sale;
(iii) to determine whether to list Securities and
to execute and file an application, prepared by the Sponsor,
to any national or international stock exchange or the Nasdaq
Stock Market's National Market for listing upon notice of
issuance of any Capital
Securities;
(iv) execute and file with the Commission a
registration statement on Form 8-A, if required,
15
including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Capital Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting
Agreement providing for the sale of the Capital
Securities;
(c) to purchase the Notes with the proceeds of the
sale of the Capital Securities and the Common Securities;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
and with respect to, for the purposes of ss.316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of Capital Securities and
Holders of Common Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as
may be required of the Regular Trustees pursuant to the
terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action");
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent or calculation agent for the
Securities;
16
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Note Issuer of its election
to defer payments of interest on the Notes by extending the interest
payment period under the Indenture;
(n) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf
of the Trust in all matters necessary or incidental to the
foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Capital Securities or to enable
the Trust to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities
of the Trust as set out in this Section 3.6, including, but not limited
to:
(i) causing the Trust not to be deemed to be
an Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified for
United States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Note Issuer to ensure
that the Notes will be treated as indebtedness of the Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the
17
purposes and functions of the Trust set out in Section 3.3, and the Regular
Trustees shall not take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Note Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause
the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Notes, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness
other than loans represented by the Notes;
(v) possess any power or otherwise act in such
a way as to vary the Trust assets or the terms of the
Securities in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities; or
(vii) other than as provided in this Declaration,
(A) direct the time, method and place of exercising any trust
or power conferred upon the Note Trustee with respect to the
Notes, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any
declaration
18
that the principal of all the Notes shall be due and payable,
or (D) consent to any amendment, modification or termination
of the Indenture or the Notes where such consent shall be
required unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause
more than an insubstantial risk that for United States federal
income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Notes shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Property Trustee to the Notes shall vest automatically in each Person
who may hereafter be appointed as Property Trustee in accordance with
Section 5.7. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Notes have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated
non-interest-bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive control of
the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in
respect of the Notes held by the Property Trustee, deposit
such funds into the Property Trustee Account and make payments
to the Holders of the Capital Securities and Holders of the
Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee Account shall be
an account that is maintained with a banking institution the
rating of whose long-term unsecured indebtedness is at least
equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
19
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the redemption of the
Capital Securities and the Common Securities to the extent the
Notes are prepaid or mature; and
(iii) upon written notice of distribution issued by
the Regular Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Notes to Holders of Securities upon the occurrence of certain
special events (as may be defined in the terms of the
Securities) or other specified circumstances pursuant to the
terms of the Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act; provided however, that if a Nonpayment has
occurred and is continuing, a Holder of Capital Securities may
institute directly a proceeding for enforcement of payment to such
Holder of the principal of, premium, if any, or interest on the Notes
having a principal amount equal to the aggregate liquidation amount of
the Capital Securities of such Holder (a "Direct Action") after the
respective due date specified in the Notes. In connection with such
Direct Action, the rights of the Holders of the Common Securities will
be subrogated to the rights of such Holder of Capital Securities to the
extent of any payment made by the Note Issuer to such Holder of Capital
Securities in such Direct Action.
(f) The Property Trustee shall not resign as a
Trustee unless either:
(i) the Trust has been completely liquidated
and the proceeds of the liquidation distributed to the
Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been
appointed and has accepted that appointment in
accordance with Section 5.7.
20
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Notes
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Property Trustee occurs and is continuing,
the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Notes subject to the
rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more Paying
Agents to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any
such Paying Agent shall comply with ss. 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Property Trustee at any
time and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) of which a Responsible Officer of the
Property Trustee has actual knowledge, the Property Trustee shall
exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
21
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Declaration and the
Property Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the
part of the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration;
but in the case of any such certificates or
opinions that by any provision hereof are
specifically required to be furnished to the
Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
22
(iv) no provision of this Declaration shall require
the Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or indemnity reasonably satisfactory to the Property Trustee
against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect
to the custody, safekeeping and physical preservation of the
Notes and the Property Trustee Account shall be to deal with
such property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Notes or the payment of any
taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable for
any interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money held by the
Property Trustee need not be segregated from other funds held
by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the Regular
Trustees or the Sponsor with their respective duties under
this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely
and shall be fully protected in acting or refraining
23
from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall
be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or
omitting any action hereunder, the Property Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the
Regular Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording,
refiling or registration thereof;
(v) the Property Trustee may consult with counsel
or other experts of its selection and the advice or opinion of
such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the Property
Trustee security and indemnity, reasonably satisfactory to the
Property
24
Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Property Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Property Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, custodians, nominees
or attorneys, and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or
its agents hereunder shall bind the Trust and the Holders of
the Securities, and the signature of the Property Trustee or
its agents alone shall be sufficient and effective to perform
any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act
or as to its compliance with any of the terms and provisions
of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such
action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders
of the same proportion in liquidation amount of the Securities
25
as would be entitled to direct the Property Trustee under the
terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying
on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in
which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
ss. 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b),
including
26
any amendments thereto, shall be signed by a majority of the Regular Trustees
holding office at the time of such signing.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for 55 years from January 1, 1997.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the
Regular Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
merge with or into, or be replaced by a trust organized as such under
the laws of any State; provided that:
(i) if the Trust is not the survivor, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the
obligations of the Trust under the Securities;
or
(B) substitutes for the Securities other
securities having substantially the same terms as
the Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the
Securities rank with respect to Distributions and
payments upon liquidation, redemption and
otherwise;
27
(ii) the Note Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same powers
and duties as the Property Trustee as the Holder of the Notes;
(iii) the Capital Securities or any Successor
Securities which are Capital Securities are listed, or any
Successor Securities of the Capital Securities will be listed
upon notification of issuance, on any national or
international securities exchange or with another
organization, if any, on which the Capital Securities are then
listed or quoted;
(iv) such merger, consolidation or replacement does
not cause the Capital Securities (including any Successor
Securities of the Capital Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, consolidation or replacement does
not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect
to any dilution of such Holders' interests in the new or
successor entity as a result of such merger, consolidation or
replacement);
(vi) such Successor Entity has a purpose
identical to that of the Trust;
(vii) prior to such merger, consolidation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to
any dilution of the Holders' interest in the new
entity);
(B) following such merger, consolidation
or replacement, neither the Trust nor the Successor
Entity will be required to register as an
Investment Company; and
(C) following such merger,
consolidation or replacement, the Trust (or the
28
Successor Entity) will continue to be classified as
a grantor trust for United States federal income
tax purposes; and
(viii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at least
to the extent provided by the Capital Securities Guarantee and
the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, merge with or
into, or replace it if such consolidation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation
to the Capital Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
29
(c) to prepare for filing when required by the Trust an
application to any national or international stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Capital Securities if the Capital Securities are to be listed;
(d) to prepare for filing by the Trust with the Commission (i)
any required registration statement on Form 8-A relating to the
registration of the Capital Securities under Section 12(b) of the
Exchange Act, including any amendments thereto and (ii) any other
filings required under the Exchange Act;
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities
and the Capital Securities Guarantee; and
(f) to negotiate the terms of a Calculation Agency
Agreement providing for the determination of a variable
interest rate on the Notes.
In addition, the Sponsor shall have the right at any time to cause the
Trust to be dissolved and the Notes held by the Trust to be distributed to
Holders of the Securities.
SECTION 4.3 Covenants of the Sponsor.
For so long as the Capital Securities remain outstanding, the
Sponsor will covenant (i) to maintain 100% direct or indirect ownership of the
Common Securities, (ii) to use its reasonable best efforts to cause the Trust
(a) to remain a statutory business trust, except as permitted by this
Declaration in connection with the Trust's liquidation, merger, or
consolidation, and (b) to not be classified as an association taxable as a
corporation or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes and (iii) to use its reasonable best efforts
to cause each Holder of Securities to be treated as owning an undivided
beneficial ownership interest in the assets of the Trust.
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ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees of this Trust shall be five, and:
(a) at any time before the issuance of any
Securities, the Sponsor may, by written instrument, increase
or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that, the number of Trustees shall in no event be less than
two; provided further that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or
that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware (the "Delaware Trustee");
(2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3)
one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if
it meets the applicable requirements.
SECTION 5.2 Qualifications of Delaware Trustee.
If required by the Business Trust Act, the Delaware Trustee
shall be:
(a) a natural person who is a resident of the State
of Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
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SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as a
Property Trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes
of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall
immediately resign in the manner and with the effect set forth in
Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in ss. 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions
of ss. 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i)
of the first provision contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York.
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SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Regular Trustees.
As of the date of this Declaration, the Regular Trustees shall
be:
John E. Mack
William L. Maxwell
Marc D. Oken
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to
any matter over which the Regular Trustees have power to act, any power
of the Regular Trustees may be exercised by, or with the consent of,
any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable
law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents which the Regular Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6,
provided, that, the registration statement referred to in Section 3.6,
including any amendments thereto, shall be signed by a majority of the
Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age
of 21 his or her power for the purposes of signing any documents which
the Regular Trustees have power and authority to cause the Trust to
execute pursuant to Section 3.6.
SECTION 5.6 Appointment of Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware).
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SECTION 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Except during an Event of Default and subject to
Section 5.7(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote
of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities.
(b) (i) the Property Trustee shall not be removed in
accordance with Section 5.7(a) until a Successor Property Trustee has
been appointed and has accepted such appointment by written instrument
executed by such Successor Property Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Delaware Trustee shall not be removed in
accordance with Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written
instrument executed by such Successor Delaware Trustee and
delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Property Trustee
shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
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(B) until the assets of the Trust have
been completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation of the Delaware Trustee
shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to
the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Property Trustee as the case may be if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee
or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or
successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
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SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.7, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of a Regular Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Regular
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees. Any and all
actions of the Regular Trustees also may be evidenced by a written consent of
such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age
of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment
36
thereto filed with the Commission, or making any other
governmental filing; and
(b) the Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the
doing of such things and the execution of such instruments either in
the name of the Trust or the names of the Regular Trustees or otherwise
as the Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions at the times and in
accordance with the applicable terms of the relevant Holder's Securities. If and
to the extent that the Note Issuer makes a payment of interest (including
Compounded Interest, as defined in the Indenture) and Additional Interest (as
defined in the Indenture), premium or principal on the Notes held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose and without further action by the Regular Trustees, to make a
Distribution of the Payment Amount to Holders. The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. Distributions shall be made on the Capital Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue
the Capital Securities which shall have such terms as are set forth in
a completed Designation of Terms in the form attached hereto as Annex I
(the "Designation of Terms") and one class of common securities
representing undivided beneficial interests in the assets of the Trust
having such terms as are set forth in a completed Designation of Terms.
The Trust shall issue no securities or other interests in the assets of
the Trust other than the Capital Securities and the Common Securities.
(b) The Securities are subject to redemption as
provided in the Designation of Terms.
(c) The Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual signature of any
present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Certificates shall cease to
be such Regular Trustee before the Certificates so signed shall be
delivered by the Trust, such Certificates nevertheless may be delivered
as though the person who signed such Certificates had not ceased to be
such Regular Trustee; and any Certificate may be signed on behalf of
the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the
date of the execution and delivery of the Declaration any such person
was not such a Regular Trustee. Certificates shall be typed, printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage.
(d) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
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(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration, including the
Designation of Terms.
SECTION 7.2 Paying Agent.
In the event that the Capital Securities are not in Book-Entry only
form, the Trust shall maintain in New York, New York, an office or agency where
the Capital Securities may be presented for payment ("Paying Agent"). The Trust
may appoint the Paying Agent and may appoint one or more additional paying
agents in such other locations as it shall determine and shall make such
appointment in any other location required by law or by the rules of any
securities exchange on which the Capital Securities are listed. The term "Paying
Agent" includes any additional paying agent. The Trust may change any Paying
Agent without prior notice to any Holder. The Trust shall notify the Property
Trustee of the name and address of any Agent not a party to this Declaration. If
the Trust fails to appoint or maintain another entity as Paying Agent, the
Property Trustee shall act as such. The Trust or any of its Affiliates may act
as Paying Agent. The Property Trustee shall initially act as Paying Agent for
the Capital Securities. The Trust shall initially act as Paying Agent for the
Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor;
upon the consent of a Majority in liquidation amount of the
Securities voting together as a single class to dissolve the
Trust or the revocation of the Sponsor's charter and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
39
(iii) upon the entry of a decree of judicial
dissolution of the Holder of the Common Securities, the
Sponsor or the Trust;
(iv) when all of the Securities shall have been
called for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance with
the terms of the Securities;
(v) at the election of the Sponsor at any time
pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the
Notes endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities;
or
(vi) before the issuance of any Securities,
with the consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall, after satisfaction
of all obligations of the Trust, file a certificate of cancellation
with the Secretary of State of the State of Delaware and the Trust
shall terminate.
(c) The provisions of Section 3.9 and Article X
shall survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities
shall be freely transferable. Notwithstanding the
foregoing, Capital Securities may not be acquired by any
Person who is, or who in acquiring such Capital Securities
is using the assets of, an ERISA Plan unless one of the
following class exemptions or another applicable exemption
is available to the ERISA Plan: (i) Prohibited Transaction
40
Class Exemption 90-1 ("PTCE 90-1"), regarding investments by insurance
company pooled separate accounts, (ii) Prohibited Transaction Class
Exemption 91-38 ("PTCE 91-38") regarding investments by bank collective
investment funds, (iii) Prohibited Transaction Class Exemption 84-14
("PTCE 84-14"), regarding transactions effected by qualified
professional asset managers, (iv) Prohibited Transaction Class
Exemption 96-23 ("PTCE 96-23"), regarding transactions effected by
in-house asset managers, or (v) Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60"), regarding investments by insurance company
general accounts. The acquisition of Capital Securities by any Person
who is, or who in acquiring such Capital Securities is using the assets
of, an ERISA Plan shall be deemed to constitute a representation by
such Person to the Trust that (i) such Person is eligible for exemptive
relief available pursuant to either one of PTCE 90-1, PTCE 91-38, PTCE
84-14, PTCE 96-23, PTCE 95-60 or another applicable exemption with
respect to the acquisition and holding of such Capital Securities, and
(ii) neither the Sponsor nor the Trust is a "fiduciary", within the
meaning of Section 3(21) of ERISA and the regulations thereunder, with
respect to such Person's interest in the Capital Securities or the
Notes.
(c) Subject to this Article IX and Section 4.3, the Sponsor
and any Related Party may only transfer Common Securities to the
Sponsor or a Related Party of the Sponsor; provided that, any such
transfer is subject to the condition precedent that the transferor
obtain the written opinion of a nationally recognized independent
counsel experienced in such matters that such transfer would not cause
more than an insubstantial risk that:
(i) the Trust would not be classified for United
States federal income tax purposes as an association or a
publicly traded partnership taxable as a corporation; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated
41
transferee or transferees. Every Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Regular Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled by the Regular Trustees. A transferee
of a Certificate shall be entitled to the rights and subject to the obligations
of a Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the Capital
Securities, the Capital Securities Certificates, on original issuance, will be
issued in the form of one or more fully registered, global Capital Security
Certificates (each a "Global Security"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Securities shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Capital Security Beneficial Owner will
receive a definitive Capital Security Certificate representing such Capital
Security Beneficial Owner's interests in such Global Securities, except as
provided in Section 9.7. Unless and until definitive, fully registered Capital
Security Certificates (the "Definitive Capital Security Certificates") have been
issued to the Capital Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Securities and receiving
approvals, votes or consents
42
hereunder) as the sole Holder of the Capital Securities and
shall have no obligation to the Capital Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control;
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Capital Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make Book-Entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions
on the Global Securities to such Clearing Agency Participants; and
(e) Capital Securities sold outside the United States may be
held by the Clearing Agency for the account of Cedel Bank, societe
anonyme and Morgan Guaranty Trust Company of New York, Brussels office,
as operator of the
Euroclear System.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, unless and until Definitive
Capital Security Certificates shall have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Capital
Security Holders to the Clearing Agency and shall have no notice obligations to
the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
SECTION 9.7 Definitive Capital Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the
43
Capital Securities and a successor Clearing Agency is not appointed
within 90 days after such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the Book-Entry system through the Clearing Agency
with respect to the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall
be prepared by the Regular Trustees on behalf of the Trust
with respect to such Capital Securities; and
(d) upon surrender of the Global Securities by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Capital Security Certificates to be delivered to
Capital Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions and each of them
may conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Capital Security
Certificates shall be typed, printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Capital Securities may be listed, or to
conform to usage.
Otherwise, Definitive Capital Security Certificates will not
be issued.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any
Certificate; and
44
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to
keep each of them harmless.
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not:
(i) be personally liable for the return of any
portion of the capital contributions (or any return thereon)
of the Holders of the Securities which shall be made solely
from assets of the Trust; and
(ii) be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations organized for profit under the General Corporation Law of
the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the
Trust or any Covered Person for any loss, damage or claim
45
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration
or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence (or negligence in the case of the Trustee) or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as
to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust
or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to
the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; or
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Trust or any Holder
of Securities,
46
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified
Person is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Note Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction,
47
or upon a plea of NOLO CONTENDERE or its equivalent, shall
not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Note Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to
the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the
settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense
of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a court) shall
be made by the Note Issuer only as authorized in the specific
case upon a determination
48
that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees
who were not parties to such action, suit or proceeding, (2)
if such a quorum is not obtainable, or, even if obtainable, if
a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the
Holders of the Common Securities.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Note Issuer
in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be
indemnified by the Note Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Note Issuer if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote
of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known
to the Regular Trustees, counsel or the Common Security Holder
at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately
breached his duty to the Trust or to the Holders of the Common
or Capital Securities.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be deemed
49
exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested
directors of the Note Issuer or Capital Security Holders of
the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding
such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between
the Note Issuer and each Company Indemnified Person who serves
in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a)
shall not affect any rights or obligations then existing.
(vii) The Note Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a
Company Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Note
Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in addition to the
resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent
entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position
under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a person.
(b) The Note Issuer agrees to indemnify the (i)
Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee or the Delaware Trustee,
50
and (iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person")
for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes
(other than taxes based on the income of such Fiduciary Indemnified
Person) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States
federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each
Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees;
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end of
such Fiscal Year, and the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each
Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement
at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the
Trust; and
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required
by United States federal income tax law, and any other annual income
tax returns required to be filed by the Regular Trustees on behalf of
the Trust with any state or local taxing authority.
52
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claim over withholding, the Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are
more than two Regular Trustees a majority of the
Regular Trustees);
53
(ii) if the amendment affects the rights,
powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the
Delaware Trustee.
(b) No amendment shall be made, and any such
purported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment,
the Property Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment
which affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee shall
have first received:
(A) an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (who may be
counsel to the Sponsor or the Trust) that such
amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of
the Securities); and
(iii) to the extent the result of such
amendment would be to:
(A) cause the Trust to fail to continue to
be classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect
the powers of the Property Trustee in contravention
of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act.
54
(c) At such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the
rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in
the terms of such Securities.
(d) Section 10.1(b) and this Section 12.1 shall not
be amended without the consent of all of the Holders of the
Securities.
(e) Article IV shall not be amended without the
consent of the Holders of a Majority in liquidation amount
of the Common Securities.
(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this
Declaration may be amended without the consent of the
Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in
this Declaration that may be defective or inconsistent
with any other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor;
(iv) conform to any change in Rule 3a-5 or any
written change in interpretation or application of Rule 3a-5
by any legislative body, court, government agency or
regulatory authority which amendment does not have a material
adverse effect on the right, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of
this Declaration to such extent as may be necessary to carry
out its provisions, including making any redemption of the
Notes or dissolution of the Trust and distribution of the
Notes to the Holders of the Securities in exchange for all of
the Securities.
55
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Capital Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be
given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Security Certificates held by the Holders
of Securities exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall
apply to meetings of Holders of Securities:
(i) notice of any such meeting shall be given to
all the Holders of Securities having a right to vote thereat
at least seven days and not more than 60 days before the date
of such meeting. Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the
Capital Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may
56
specify that any written ballot submitted to the Security
Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by
the Regular Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this
Declaration, the terms of the Securities, the Trust Indenture
Act or the listing rules of any stock exchange on which the
Capital Securities are then listed or trading, otherwise
provides, the Regular Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on
by any Holders of Securities, waiver of any such notice,
action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such
right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with
or constitute a breach of the charter or by-laws of the
Property Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee
58
represents and warrants to the Trust and the Sponsor at the time of the
Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee
that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or
at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Securities):
59
NB Capital Trust III
c/o NationsBank Corporation
Attention: Treasurer
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Telecopy: (704) 386-0270
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee
Administration
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
NationsBank Corporation
NationsBank Corporate Center
100 North Tryon Street, 23rd Floor
Charlotte, North Carolina 28255
Attention: Treasurer
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was
60
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts; Acceptance.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same
61
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.
62
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ John E. Mack
John E. Mack, as Regular Trustee
/s/ William L. Maxwell
William L. Maxwell, as Regular
Trustee
/s/ Marc D. Oken
Marc D. Oken, as Regular Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Walter Gitlin
Name: Walter Gitlin
Title: Authorized Signatory
THE BANK OF NEW YORK,
as Property Trustee
By: /s/ Byron Merino
Name: Byron Merino
Title: Assistant Treasurer
NATIONSBANK CORPORATION,
as Sponsor
By: /s/ Susan Y. Calton
Name: Susan Y. Calton
Title: Vice President
63
ANNEX I
NB CAPITAL TRUST III
DESIGNATION OF TERMS OF
FLOATING RATE CAPITAL SECURITIES AND
FLOATING RATE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 22, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Capital Securities. 500,000 Floating Rate Capital
Securities of the Trust (liquidation amount of $1,000 per Security) with an
aggregate liquidation amount with respect to the assets of the Trust of
$500,000,000, are hereby designated for purposes of identification only as
"Floating Rate Capital Securities" (the "Capital Securities"). The Capital
Security Certificates evidencing the Capital Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on which the Capital
Securities are listed.
(b) Common Securities. 15,500 Floating Rate Common Securities
of the Trust (liquidation amount of $1,000 per Security) with an aggregate
liquidation amount with respect to the assets of the Trust of $15,500,000, are
hereby designated for purposes of identification only as "Floating Rate Common
Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
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2. Distributions.
(a) Distributions payable on each Security will be payable in
respect of the liquidation amount of $1,000 per Capital Security at a rate per
annum equal to LIBOR plus 0.55% such rate being the rate of interest payable on
the Notes to be held by the Property Trustee. A Distribution is payable only to
the extent that payments are made in respect of the Notes held by the Property
Trustee and to the extent the Property Trustee has funds available therefor. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including February 3, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (E.G., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
(b) Distributions on the Securities will be cumulative, will
accrue from February 3, 1997 and will be payable quarterly in arrears, on
January 15, April 15, July 15 and October 15 of each year, commencing on April
15, 1997, except as otherwise described below. The Note Issuer has the right
under the Indenture to defer payments of interest on the Notes by extending the
interest payment period from time to time on the Notes for a period not
exceeding 20 consecutive quarterly periods (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Notes,
provided that no Extension Period shall extend beyond the Stated Maturity. As a
consequence of such deferral, Distributions will also be deferred on the Capital
Securities for the same period. Despite such deferral, quarterly Distributions
to which Holders of such Capital Securities are entitled will accumulate
additional Distributions thereon at a rate per annum equal to LIBOR plus 0.55%,
compounded quarterly from the relevant payment date for such Distributions.
Prior to the termination of any such Extension Period, the Note Issuer may
further extend such
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Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarterly
periods or extend beyond the Stated Maturity. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
or the Clearing Agency, as the case may be, on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Capital Securities remain in Book-Entry only
form, the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Notes. Payment of Distributions on the Securities held in Book-Entry only
form will be made to the Depositary in immediately available funds. The
Depositary's practice is to credit Clearing Agency Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payments on such payment date. Payments by (i) Clearing Agency
Participants and (ii) securities brokers and dealers, banks and trust companies
and other entities that clear transactions through or maintain a direct or
indirect custodial relationship with a Clearing Agency Participant (an "Indirect
Participant") to Capital Security Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Clearing Agency Participants and Indirect Participants and not of the
Depositary, the Trust or the Sponsor, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of Distributions to
the Depositary is the responsibility of the Trust, disbursement of such payments
to Clearing Agency Participants is the responsibility of the Depositary, and
disbursement of such payments to the Capital Security Beneficial Owners is the
responsibility of the Clearing Agency Participants and Indirect Participants.
The relevant record dates for the Common Securities shall be the same record
date as for the Capital Securities. If the Capital Securities shall not continue
to remain in Book-Entry only form, the regular record dates for the Capital
Securities shall be the January 1, April 1, July 1 and October 1 prior to the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Notes. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Note Issuer
having failed to make a payment under the Notes, will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted
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Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on
the Securities is not a Business Day, then payment of the Distribution payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors an amount
equal to the aggregate of the stated liquidation amount of $1,000 per Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, Notes in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Securities, with
an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
Securities, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
Holders of the Common Securities will be entitled to receive distributions upon
any such dissolution Pro Rata with Holders of the Capital Securities, except
that if a Declaration Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities with
respect to such distributions.
4. Redemption and Distribution.
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(a) The Securities are subject to redemption at the Stated
Maturity, at any time after January 15, 2007 and in certain circumstances,
following the occurrence of a Special Event on or before January 15, 2007 as
follows:
(i) Upon payment of the Notes at a payment price equal to the
principal amount of, plus accrued interest on the Notes, the proceeds
from such payment shall be simultaneously applied to redeem the
Securities at the Redemption Price.
(ii) In the event of a prepayment arising from the occurrence of a
Special Event prior to January 15, 2007, the proceeds from such
prepayment shall be simultaneously applied to redeem the Capital
Securities at the Redemption Price.
(iii)If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be
redeemed Pro Rata and the Capital Securities to be redeemed will be as
described in Section 4(f)(ii) below.
(b) If the Sponsor has given a notice of its election to
terminate the Trust, the Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors, cause Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with and accrued and unpaid interest equal to accrued and unpaid Distributions
on, and having the same record date for payment as, the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interests in the Securities within 90 days following receipt of the Sponsor's
notice of election.
(c) On and from the date fixed by the Regular Trustees for any
distribution of Notes and dissolution of the Trust: (i) the Securities will no
longer be deemed to be outstanding, (ii) the Depositary or its nominee as the
record Holder of the Capital Securities, will receive a registered Global
Security or Securities representing the Notes to be delivered upon such
distribution and any certificates representing Securities, except for
certificates representing Capital Securities held by the Depositary or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Notes having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an identical interest
rate and accrued and unpaid interest equal to accrued and unpaid Distributions
on such Securities until such
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certificates are presented to the Note Issuer or its agent for
transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods terminating on or before the
date of redemption.
(e) If the Notes are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Note Issuer will use its best
efforts to have the Notes listed on the securities exchange, if any, on which
the Capital Securities were listed immediately prior to the distribution of the
Notes.
(f) Redemption or Distribution Procedures shall be as
follows:
(i) A Redemption/Distribution Notice will be given by the
Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 15 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Notes. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a Redemption/
Distribution Notice shall be deemed to be given on the day such notice
is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing
in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Capital Securities, it being
understood that, in respect of Capital Securities registered in the
name of and held of record by the Depositary or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to each
Clearing Agency Participant (or Person on whose behalf such nominee
holds such securities) in accordance with the procedures applied by
such agency or nominee.
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(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Notes are repaid as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Capital Securities are in Book-Entry
only form, with respect to the Capital Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Note Issuer
has paid the Property Trustee a sufficient amount of cash in connection
with the related prepayment or maturity of the Notes, the Property
Trustee will deposit irrevocably with the Depositary or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Capital Securities and
will give the Depositary irrevocable instructions and authority to pay
the Redemption Price to the Holders of the Capital Securities, and (B)
with respect to Capital Securities issued in definitive form and Common
Securities, provided that the Note Issuer has paid the Property Trustee
a sufficient amount of cash in connection with the related prepayment
or maturity of the Notes, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records
of the Trust on the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on the date
of such deposit, or on the redemption date, as applicable,
Distributions will cease to accrue on the Securities so called for
redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees nor the Trust shall
be required to register or cause to be registered the transfer of any
Securities that have been so called for redemption. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to
accrue from the original redemption date to the actual date of payment,
in which case
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the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Capital Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if the Global Securities have been
issued or, if Definitive Capital Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common
Securities, to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, the Sponsor or any of its subsidiaries may at any
time and from time to time purchase outstanding Capital Securities by
tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 of this
Designation of Terms and as otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in aggregate liquidation amount of the Capital
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as holder of
the Notes, to (i) exercise the remedies available under the Indenture conducting
any proceeding for any remedy available to the Note Trustee, or exercising any
trust or power conferred on the Note Trustee with respect to the Notes, (ii)
waive any past Event of Default and its consequences that is waivable under
Section 5.01 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Notes shall be due and payable, or
(iv) consent to any amendment, modification or termination of the Indenture as a
holder of the Notes provided, however, that, where a consent or action under the
Indenture would require the consent or act of the Holders of greater than a
Super Majority affected thereby the Property Trustee may only give such consent
or take such action at the written direction of the Holders of at least the
proportion in liquidation amount of the Capital Securities which
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the relevant Super Majority represents of the aggregate principal amount of the
Notes outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital Securities. Other
than with respect to directing the time, method and place of conducting any
remedy available to the Property Trustee or the Note Trustee as set forth above,
the Property Trustee shall not take any action in accordance with the directions
of the Holders of the Capital Securities under this paragraph unless the
Property Trustee has obtained an opinion of tax counsel to the effect that for
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust on account of such action. If a Nonpayment occurs on
the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), and such Nonpayment is continuing, a Holder
of Capital Securities may institute a Direct Action after the respective due
date specified in the Notes. In connection with such Direct Action, the rights
of the Holders of the Common Securities will be subrogated to the rights of such
Holder of Capital Securities to the extent of any payment made by the Note
Issuer to such Holder of Capital Securities in such Direct Action.
Except as provided in this Section, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Notes.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Capital Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought, and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Notes in accordance with the Declaration and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances
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described above, any of the Capital Securities that are owned by the Sponsor or
any Affiliate of the Sponsor shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b) and (c), 7(a) and
(b) and 8 of this Designation of Terms or as otherwise required by law and the
Declaration, the Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of as a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Note
Trustee, or exercising any trust or power conferred on the Note Trustee with
respect to the Notes, (ii) waive any past default and its consequences that is
waivable under Section 5.01 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Notes shall be due
and payable, provided that, where a consent or action under the Indenture would
require the consent or act of the Holders of a Super Majority, the Property
Trustee may only give such consent or take such action at the written direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Notes outstanding. Pursuant to this Section 6(c), the
Property Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Capital Securities. Other than with respect to
directing the time, method and place of conducting any remedy available to the
Property Trustee or the Note Trustee as set forth above, the Property Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for purposes of United
States federal income tax the Trust will not be classified as other than
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a grantor trust on account of such action. If the Property Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities may,
to the extent permitted by applicable law, institute a legal proceeding directly
against any Person to enforce the Property Trustee's rights under the
Declaration, without first instituting a legal proceeding against the Property
Trustee or any other Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Notes in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least as a Majority in liquidation amount of the Securities, affected thereby,
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
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except with the approval of a Majority in liquidation amount of
such class of Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Notes is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Notes, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where as a consent under the Indenture would
require the consent of the holders of as a Super Majority, the Property Trustee
may only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Notes outstanding;
provided, further, that the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 7(b) unless the Property Trustee has obtained an opinion of tax counsel
to the effect that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on account of such
action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "pro rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, a Declaration Event
of Default has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Capital Securities
pro rata according to the aggregate liquidation amount of Capital Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Capital Securities outstanding, and only after satisfaction of all amounts owed
to the Holders of the Capital Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu and payment thereon
shall be made pro rata with the Common Securities except that, where a
Declaration Event of Default occurs and is
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continuing the rights of Holders of the Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights to payment of the Holders of the Capital Securities.
10. Listing.
Application shall be made by the Regular Trustees to list the
Capital Securities on the Luxembourg Stock Exchange. As long as the Capital
Securities are listed on any exchange, the Sponsor and the Regular Trustees
shall comply with the rules and regulations of such exchange. Unless otherwise
determined by the Regular Trustees, Capital Securities shall not be listed for
quotation on any other stock exchange.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request to
the Sponsor at its principal
place of business.
Dated: January 22, 1997.
NATIONSBANK CORPORATION
as Sponsor
By:________________________________
Susan Y. Calton
Vice President
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Accepted:
NB Capital Trust III
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John E. Mack
Regular Trustee
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EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
This Capital Security is a Global Security within the meaning
of the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Capital Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Capital Security issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING AFFILIATE OF NATIONSBANK CORPORATION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Certificate Number
__-R-_____________ CUSIP No. 62874 FAA 7
ISIN No. US 62874FAA75
Common Code No. 7327838
Certificate Evidencing __________ Floating Rate Capital
Securities
of
NB CAPITAL TRUST III
Floating Rate Capital Securities
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(liquidation amount $1,000 per Capital Security)
NB CAPITAL TRUST III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that CEDE &
CO. (the "Holder") is the registered owner of ________________ Capital
Securities of the Trust representing undivided preferred beneficial interests in
the assets of the Trust designated the Floating Rate Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of January 22, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Capital Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Capital Securities Guarantee to the extent
provided therein. The Declaration permits the Sponsor to dissolve the Trust at
any time. The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership of the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate as
of ____________, 1997.
NB CAPITAL TRUST III
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A1-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable
in respect of the liquidation amount of $1,000 per capital security at a rate
per annum equal to LIBOR plus 0.55%, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee on behalf of the Trust.
Distributions in arrears will continue to accumulate at the same rate,
compounded quarterly. A Distribution is payable only to the extent that payments
are made in respect of the Notes held by the Property Trustee and to the extent
the Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including February 3, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (E.G., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
Except as otherwise described below, Distributions on the
Capital Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears on January 15, April 15, July
15 and October 15 of each year, commencing on April 15, 1997 to the person in
whose name the Capital Security is registered at the close of business on the
regular record date for such installment, which shall be the close of business
on the Business Day next preceding such payment date. IF PURSUANT TO THE TERMS
OF THE DECLARATION, THE SECURITIES ARE NO LONGER REPRESENTED BY A GLOBAL
SECURITY --which shall be the close of business on January 1, April 1, July 1 or
October 1. The Note Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to time on the
Notes for a period not exceeding 20 consecutive quarterly periods (each an
"Extension Period"), provided that no Extension Period shall last beyond the
date of the maturity of the Notes. As a consequence of such deferral,
Distributions will also be deferred hereunder for the same period. Despite such
deferral, quarterly Distributions to which Holders of such Capital Securities
are entitled will continue to accumulate additional Distributions thereon at a
rate per annum equal to LIBOR plus 0.55% compounded quarterly from the relevant
payment date for such Distributions. Prior to the termination of any such
Extension Period, the Note Issuer may
A1-3
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly periods or extend beyond the maturity date of the Notes.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Note Issuer may commence a new Extension Period,
subject to the above requirements.
THE CAPITAL SECURITIES SHALL BE REDEEMABLE AS PROVIDED
IN THE DECLARATION.
A1-4
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
=================================================================
- -----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
=================================================================
=================================================================
(Insert address and zip code of assignee)
and irrevocably appoints
=================================================================
___________________________________________________________ agent to transfer
this Capital Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee1: ___________________________________
- --------
1 Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
A1-5
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED
SECURITIES" AS THAT TERM IS DEFINED IN RULE 144A UNDER THE ACT. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE TRUST.
THE COMMON SECURITIES REPRESENTED BY THIS CERTIFICATE ARE BENEFICIALLY OWNED BY
A PERSON WHO MAY BE AN "AFFILIATE" WITHIN THE MEANING OF RULE 144 UNDER THE ACT.
CONSEQUENTLY, THE SECURITIES MAY NOT BE TRANSFERRED UNLESS SUCH TRANSFER IS IN
COMPLIANCE WITH SAID RULE OR UNLESS MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL FOR THE
TRUST THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
THIS INSTRUMENT IS NOT A SAVINGS ACCOUNT OR A BANK DEPOSIT, IS NOT AN OBLIGATION
OF OR GUARANTEED BY ANY BANKING AFFILIATE OF NATIONSBANK CORPORATION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY AND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Certificate Number
__-R_____________
Certificate Evidencing ___________ Floating Rate Common
Securities
of
NB CAPITAL TRUST III
Floating Rate Common Securities
(liquidation amount $1,000 per Common Security)
NB CAPITAL TRUST III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
NATIONSBANK CORPORATION (the "Holder") is the registered owner of __________
Common Securities of the Trust representing undivided beneficial interests in
the assets of the
A2-1
Trust designated the Floating Rate Common Securities (liquidation amount $1,000
per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of January 22,
1997, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Declaration permits the Sponsor to dissolve the Trust at any time. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Notes as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Notes.
IN WITNESS WHEREOF, the Trust has executed this certificate as of
____________ __, 1997.
NB CAPITAL TRUST III
By:________________________________
Name: John E. Mack
Title: Regular Trustee
A2-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be payable
in respect of the liquidation amount of $1,000 per Capital Security at a rate
per annum equal to LIBOR plus 0.55%, such rate being the rate of interest
payable on the Notes to be held by the Property Trustee. Distributions in
arrears will continue to accumulate at the same rate, compounded quarterly. A
Distribution is payable only to the extent that payments are made in respect of
the Notes held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months.
Accrued Distributions on any Security will be calculated by
multiplying the principal amount of such Security by an accrued interest factor.
Such accrued interest factor will be computed by adding the interest factor
calculated for each day from and including February 3, 1997, or from but
excluding the last date to which interest has been paid, as the case may be, to
and including the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the rate in effect on such day by 360. All percentages resulting from
any calculation of Distributions on the securities will be rounded to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (E.G., 5.687665% (or .05687665) would be
rounded to 5.68767% (or .0568767)), and all dollar amounts used or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward).
Except as otherwise described below, Distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears on January 15, April 15, July
15 and October 15 of each year, commencing on April 15, 1997, to Holders of
record 15 days prior to such payment dates, which payment dates shall correspond
to the interest payment dates on the Notes. The Note Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Notes for a period not exceeding 20 consecutive
quarterly periods (each an "Extension Period"), provided that no Extension
Period shall last beyond the date of the maturity of the Notes. As a consequence
of such deferral, Distributions will also be deferred hereunder for the same
period. Despite such deferral, quarterly Distributions to which Holders of such
Common Securities are entitled will continue to accumulate additional
Distributions thereon at a rate per annum equal to LIBOR plus 0.55%, compounded
quarterly from the relevant payment date for such Distributions. Prior to the
termination of any such Extension Period, the Note Issuer may further extend
such Extension Period; provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 20 consecutive
quarterly
A2-3
periods or extend beyond the maturity date of the Notes. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Note Issuer may commence a new Extension Period, subject to the above
requirements.
THE COMMON SECURITIES SHALL BE REDEEMABLE AS PROVIDED IN THE
DECLARATION.
A2-4
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
=================================================================
- -----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
=================================================================
=================================================================
(Insert address and zip code of assignee)
and irrevocably appoints ________________________________________
- -----------------------------------------------------------------
______________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another
to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee2: _________________________________
- --------
Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
A2-5