For purposes of the interest rate adjustment provisions of the notes, the following terms will be
applicable:
Fundamental change
means the occurrence of any of the following: (1) any transaction of merger or consolidation or
amalgamation of any Material Subsidiary (other than a merger or consolidation with or into (i) National, if National shall be the continuing or surviving corporation, or (ii) any other Subsidiary of National, provided that the Subsidiary
shall be the continuing or surviving corporation); (2) any liquidation, winding up or dissolution of any Material Subsidiary; or (3) the direct or indirect conveyance, sale, lease, transfer or other disposition of, in one or more series of
related transactions, all or substantially all of any Material Subsidiarys assets, whether now owned or hereafter acquired (other than to (i) National or (ii) a Subsidiary of National). Notwithstanding the foregoing, National or any
Material Subsidiary may, directly or indirectly convey, sell, lease, transfer or otherwise dispose of, in one or more series of related transactions: (1) any or all of its interest in any Subsidiary to any other Subsidiary of National; or
(2) up to 10% of the total consolidated assets of National.
Fundamental change rating event
means the rating on the notes is
lowered by at least one rating agency such that the rating on the notes is below investment grade on any day during the period (which period will be extended so long as the rating of the notes is under publicly announced consideration for a possible
downgrade by any of the rating agencies) commencing 60 days prior to the first public notice of the occurrence of a fundamental change or Nationals intention to effect a fundamental change and ending 60 days following consummation of
such fundamental change.
Interest rate adjustment triggering event
means the occurrence of both a fundamental change and a fundamental
change rating event.
Material Subsidiary
means, at any time, a Subsidiary of National whose assets exceed 10% of the consolidated
assets of National and its Subsidiaries, other than any Subsidiary that is not a U.S. Person.
Subsidiary
means, with respect to any
person (the parent) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parents consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that
is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
U.S. Person
means a United States person within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended.
Change of control offer
If a change of
control triggering event occurs, unless National has exercised its option to redeem such notes as described above, National will be required to make an offer (a change of control offer) to each holder of the notes to repurchase all or
any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holders notes on the terms set forth in such notes. In the change of control offer, National will be required to offer payment in cash equal to 101% of the
aggregate principal amount of notes repurchased, plus accrued and unpaid interest, if any, on the notes repurchased to, but not including, the date of repurchase (a change of control payment), subject to the right of holders of record on
the applicable record date to receive interest due on the next interest payment date.
Within 30 days following any change of control triggering
event or, at Nationals option, prior to any change of control, but after public announcement of the transaction that constitutes or may constitute the change of control,
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