-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KoDW2GmzUaYzObSVBhqbhv9cH6RwqfPBZic/fcUe9Tx8bUOw2xVEHjDag5Fe0Gzo WOPDdYr8cCBDxH5sHrf48A== 0000940180-99-000570.txt : 19990623 0000940180-99-000570.hdr.sgml : 19990623 ACCESSION NUMBER: 0000940180-99-000570 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 REFERENCES 429: 333-59165 FILED AS OF DATE: 19990524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WACHOVIA CORP/ NC CENTRAL INDEX KEY: 0000774203 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 561473727 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-79183 FILM NUMBER: 99633331 BUSINESS ADDRESS: STREET 1: 100 N MAIN ST STREET 2: P O BOX 3099 CITY: WINSTON SALEM STATE: NC ZIP: 27150 BUSINESS PHONE: 3367705000 MAIL ADDRESS: STREET 1: 100 NORTH MAIN ST STREET 2: P O BOX 3099 CITY: WINSTON SALEM STATE: NC ZIP: 27150 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WACHOVIA CORP DATE OF NAME CHANGE: 19910603 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on May 24, 1999 Registration No. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Wachovia Corporation (Exact name of registrant as specified in its charter) North Carolina 56-1473727 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) and 100 North Main Street 191 Peachtree Street, Winston-Salem, North Carolina 27101 N.E. Atlanta, Georgia 30303 (336) 770-5000 (404) 332-5000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Kenneth W. McAllister Wachovia Corporation 100 North Main Street Winston-Salem, North Carolina 27101 (336) 732-5141 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------- Copy to: George R. Krouse, Jr. Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 (212) 455-2000 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 474, please check the following box. [_] -------------- CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
Proposed Proposed Amount Maximum Maximum Title of Each Class of to be Offering Price Aggregate Amount of Securities to be Registered Registered(1) Per Unit(2) Offering Price(2) Registration Fee - ------------------------------------------------------------------------------------------------ Debt Securities Total.. $1,700,000,000(3) 100% $1,700,000,000 $472,600(4)
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (1) In U.S. dollars or equivalent thereof in other currencies, including composite currencies, on the basis of exchange rates on the date an agreement to issue and sell the applicable Debt Securities is entered into. (2) Estimated solely for the purpose of computing the registration fee. (3) Such amount represents the principal amount of any Debt Securities issued at their principal amount and the issue price rather than the principal amount of any Debt Securities issued at an original issue discount. Such amount does not include the unsold $800,000,000 aggregate principal amount of Debt Securities of the Registrant registered under the previously filed Registration Statement on Form S-3 (File No. 333-59165), to which this Registration Statement also constitutes Post-Effective Amendment No. 2. (4) Determined pursuant to Section 6(b) of the Securities Act. A registration fee of $236,000 related to the unsold $800,000,000 of Debt Securities registered under Registration Statement No. 333-59165 was previously paid in connection with the filing of Registration Statement No. 333-59165. Pursuant to Rule 429 under the Securities Act, the combined Prospectus filed as part of this Registration Statement also relates to the unsold $800,000,000 principal amount of Debt Securities registered under the previously filed Registration Statement on Form S-3 (File No. 333-59165). This Registration Statement constitutes Post-Effective Amendment No. 2 to Registrant's Registration Statement on Form S-3 (File No. 333-59165), and such Post- Effective Amendment No. 2 shall hereafter become effective concurrently with the effectiveness of this Registration Statement and in accordance with Section 8(c) of the Securities Act of 1933. Upon the effectiveness of this Registration Statement and Post-Effective Amendment No. 2, this Registration Statement and Registration Statement No. 333-59165 will together relate to an aggregate of $2,500,000,000 of Debt Securities. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant files a further amendment which specifically states that this Registration Statement will then become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement becomes effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information contained in this prospectus is not complete and may be + +changed. We may not sell these securities until the registration statement + +filed with the Securities and Exchange Commission is effective. This + +prospectus is not an offer to sell these securities and we are not soliciting + +an offer to buy these securities in any state where the offer or sale is not + +permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED MAY 24, 1999 PROSPECTUS $2,500,000,000 Wachovia Corporation Debt Securities ------------- We may offer to sell up to $2.5 billion of our unsecured debt securities (or the equivalent amount based on the applicable exchange rate at the time of offering if any securities are denominated in foreign currencies). The securities may be either Senior Securities or Subordinated Securities. The securities may include securities denominated in U.S. dollars or, if so specified in the applicable prospectus supplement, in any other currency, including composite currencies such as the euro. In this prospectus, we describe generally the terms of the securities. We will describe the specific terms of the securities that we offer in a supplement to this prospectus at the time of each offering. If any offering involves underwriters, dealers or agents, we will describe our arrangements with them in the prospectus supplement that relates to that offering. The Senior Securities, when issued, will be unsecured and will rank on a parity with all unsecured and unsubordinated indebtedness of Wachovia. The Subordinated Securities, when issued, will be unsecured and will be subordinate to "Senior Indebtedness" of Wachovia and, under certain circumstances, to "Additional Senior Obligations" of Wachovia, as these terms are defined in this prospectus. Payment of principal of the Subordinated Securities may be accelerated only in the case of the bankruptcy of Wachovia. There is no right of acceleration of the Subordinated Securities in the case of a default in the payment of the principal of, or any premium or interest on, the Subordinated Securities or in the performance of any covenant or agreement of Wachovia. ------------- This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement. The securities will be unsecured obligations of Wachovia Corporation, will not be savings accounts, deposits or other obligations of any bank or nonbank subsidiary of Wachovia Corporation and will not be insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other government agency. ------------- The Securities and Exchange commission and State Securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ------------- The date of this prospectus is , 1999. TABLE OF CONTENTS
Page ---- About this Prospectus...................................................... 2 Where You Can Find More Information........................................ 3 Wachovia Corporation....................................................... 4 Consolidated Ratio of Earnings to Fixed Charges............................ 5 Use of Proceeds............................................................ 5 Description of Debt Securities............................................. 5 Plan of Distribution....................................................... 15 Experts.................................................................... 16 Legal Matters.............................................................. 16
---------------- You should rely only on the information incorporated by reference or contained in this prospectus and any applicable prospectus supplement. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or the applicable prospectus supplement is accurate only as of the date on the front of those documents, regardless of the time of delivery of this prospectus or the applicable prospectus supplement or of any sale of our securities. In this prospectus, "we", "us", "our" and "Wachovia" each refers to Wachovia Corporation. ---------------- ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission using a "shelf" registration process. Under this shelf registration, we may sell the securities described in this prospectus in one or more offerings up to a total dollar amount of $2.5 billion. We provide information to you about these securities in three documents that progressively provide more detail: 1. This prospectus, which contains general information that may or may not apply to each offering of securities. 2. The applicable prospectus supplement, which will contain more specific information than this prospectus and may also add, update or change information contained in this prospectus. To the extent information in the applicable prospectus supplement differs from this prospectus, you should rely on the different information in the prospectus supplement. 3. The pricing supplement, if applicable, will provide final details about a specific offering and the terms of the offered securities, including their price. To the extent information differs from this prospectus or the prospectus supplement, you should rely on the different information in the pricing supplement. You should read both this prospectus and any prospectus supplement or pricing supplement together with any additional information described under the heading "Where You Can find More Information" to learn more about Wachovia and the securities offered. ---------------- 2 WHERE YOU CAN FIND MORE INFORMATION We have filed with the SEC, Washington, D.C., a registration statement on Form S-3 under the Securities Act of 1933, as amended, with respect to the securities that we are offering by this prospectus. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. Certain items are omitted in accordance with the rules and regulations of the SEC. For further information with respect to Wachovia and the securities offered hereby, reference is made to the registration statement and the exhibits and any schedules filed with the registration statement. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance, if such contract or document is filed as an exhibit, reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by such reference. We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file, including the registration statement, at the SEC's Public Reference room at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices located at Seven World Trade Center, Suite 1300, New York, New York 10048 and at Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, IL 60661. For further information on the operation of the Public Reference room, you may call the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public over the Internet at the SEC's website at http://www.sec.gov. You may also inspect our SEC filings at the New York Stock Exchange, the exchange on which our common stock is listed, at 20 Broad Street, 7th Floor, New York, New York 10005. The SEC allows us to "incorporate by reference" the information in documents that we file with them. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information in documents that we file after the date of this prospectus and before the termination of the offering contemplated by this prospectus will automatically update and supersede information in this prospectus. We incorporate by reference our Annual Report on Form 10-K for the year ended December 31, 1998, our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, our Current Reports on Form 8-K dated January 14, 1999 and May 13, 1999, and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until we sell all of the securities offered by this prospectus. We will provide without charge, upon written or oral request, to each person to whom this prospectus is delivered, a copy of any or all of the documents described above which have been or may be incorporated by reference in this prospectus but not delivered with this prospectus. Such requests should be directed to Wachovia Corporation, 100 North Main Street, Winston-Salem, North Carolina 27101, Attention: Secretary. Telephone requests may be directed to (336) 770-5000. This prospectus contains or incorporates by reference forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts, but rather are based on our current expectations, estimates and projections about Wachovia's industry, our beliefs and assumptions. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates" and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Many of those risks and uncertainties will be described with particularity in the applicable prospectus supplement. Risks and uncertainties that may affect future results include, but are not limited to, changes in the economy, interest rate movements, timely development by Wachovia of technology enhancements for its products and operating systems, the ability of Wachovia and its customers and vendors to address effectively Year 2000 3 issues, the impact of competitive products, services and pricing, Congressional legislation and similar matters. We caution you not to place undue reliance on forward-looking statements, which are subject to influence by the named risk factors and unanticipated future events and which reflect our management's view only as of the date of this prospectus or the prospectus supplement containing such forward-looking statements. We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this prospectus or the applicable prospectus supplement, or to reflect the occurrence of unanticipated events. WACHOVIA CORPORATION Wachovia Corporation, a North Carolina corporation, is an interstate bank holding company serving regional, national and international markets and maintains dual headquarters in Atlanta, Georgia and Winston-Salem, North Carolina. At March 31, 1999, Wachovia and its consolidated subsidiaries had total assets of $65.319 billion, deposits of $40.288 billion, and a market capitalization of $16.473 billion. At March 31, 1999, Wachovia ranked 16th based on both its consolidated asset size and on its market capitalization among domestic U.S. bank holding companies. Wachovia is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and is a savings and loan holding company within the meaning of the Home Owner's Loan Act of 1933, as amended. Wachovia's common stock is traded on the New York Stock Exchange under the symbol WB. Wachovia's principal banking subsidiaries are Wachovia Bank, National Association ("Wachovia Bank"), and The First National Bank of Atlanta. Wachovia Bank is a national banking association headquartered in Winston-Salem, North Carolina. As of March 31, 1999, Wachovia Bank had total assets of $61.879 billion and deposits of $41.134 billion. Wachovia Bank currently offers credit and deposit services and investment and trust services to consumers primarily located in Georgia, North Carolina, South Carolina, Virginia and Florida and to corporations located both inside and outside the United States. Consumer products and services are provided through: . a network of 753 retail branches (as of March 31, 1999) and 1,381 ATMs (as of March 31, 1999) in Georgia, North Carolina, South Carolina, Virginia and Florida; . 1-800-WACHOVIA On-Call 24 hour telephone banking; . automated Phone Access; and . internet-based investing and banking at www.wachovia.com. The First National Bank of Atlanta offers credit card services. Wachovia also has subsidiaries engaged in large corporate and institutional relationship management and business development, corporate leasing, remittance processing, insurance, investment advisory and securities brokerage services. In addition to its domestic banking offices and international banking offices in London and the Cayman Islands, Wachovia's subsidiaries have offices in Chicago, New York and selected other cities in the United States, and Hong Kong, Sao Paulo and Tokyo. Because Wachovia's growth strategy includes the use of acquisitions, Wachovia regularly evaluates acquisition opportunities and conducts due diligence activities in connection with possible acquisitions. As a result, acquisition discussions and, in some cases, negotiations may take place and future acquisitions involving cash, debt or equity securities may occur. Acquisitions typically involve the payment of a premium over book value and, therefore, some dilution of Wachovia's book value and net income per share may occur in connection with any future transactions. Wachovia's executive offices are located at 100 North Main Street, Winston- Salem, North Carolina 27101 and 191 Peachtree Street, N.E., Atlanta, Georgia 30303, and its telephone numbers are (336) 770-5000 and (404) 332-5000. 4 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES The following unaudited table presents the consolidated ratio of earnings to fixed charges of Wachovia for the periods indicated. The consolidated ratio of earnings to fixed charges has been computed by dividing net income plus all applicable income taxes plus fixed charges by fixed charges. Fixed charges represent all interest expense (ratios are presented both including and excluding interest on deposits), and the portion of net rental expense which is deemed to be equivalent to interest on long-term debt. Interest expense (other than on deposits) includes interest on long-term debt, federal funds purchased and securities sold under agreements to repurchase, mortgages, commercial paper and other funds borrowed.
Three Months Year Ended December 31, Ended ----------------------------- March 31, 1999 1998 1997 1996 1995 1994 -------------- ----- ----- ----- ----- ----- Including interest on deposits.... 1.70x 1.56x 1.40x 1.52x 1.50x 1.64x Excluding interest on deposits.... 2.67x 2.33x 1.98x 2.22x 2.15x 2.47x
USE OF PROCEEDS We will use the net proceeds from the sale of the securities for general corporate purposes, principally to fund investments in, or extensions of credit to, our banking and nonbanking subsidiaries. We also may use such net proceeds to allow our subsidiaries to repay borrowings incurred by such subsidiaries. Except as otherwise described in the applicable prospectus supplement, specific allocations of the proceeds to such purposes will not have been made at the date of the prospectus supplement, although our management will have determined that funds should be borrowed at that time in anticipation of future funding or capital requirements of its subsidiaries. The precise amount and timing of such investments in and extensions of credit to the subsidiaries will depend upon their funding requirements and the availability of other funds to us and our subsidiaries. In addition to the foregoing, we also may use a portion of the net proceeds to fund possible acquisitions if suitable opportunities develop in the future. Based upon anticipated future financing requirements of us and our subsidiaries, we expect that we will, from time to time, engage in additional financings of a character and in amounts to be determined. DESCRIPTION OF DEBT SECURITIES General We expect to issue the Senior Securities under an Indenture dated as of August 15, 1996 (the "Senior Indenture") between us and The Chase Manhattan Bank, as trustee (the "Senior Trustee"). We expect to issue the Subordinated Securities under an Indenture dated as of July 15, 1998 (the "Subordinated Indenture") between us and The Chase Manhattan Bank, as trustee (the "Subordinated Trustee"). Copies of the Senior Indenture and the Subordinated Indenture (collectively, the "Indentures") are included as exhibits to the registration statement of which this prospectus is a part. In the discussion that follows, we summarize particular provisions of the Indentures and include the relevant section numbers of the applicable Indenture in parentheses. Our discussion of Indenture provisions is not complete. You should read the Indentures for a more complete understanding of the provisions we describe. Capitalized terms not otherwise defined in this prospectus shall have the meanings given to them in the applicable Indenture. The Senior Securities will be unsecured and will rank on a parity with all unsecured and unsubordinated indebtedness of Wachovia. The Senior Indenture prohibits Wachovia from disposing of, or permitting the issuance of, capital stock of specified subsidiaries under certain circumstances. See "Restrictive Covenants Applicable to Senior Securities" beginning on page 8. The Subordinated Securities will be unsecured and will be subordinated and junior to all "Senior Indebtedness" and, in certain circumstances relating to the dissolution, winding-up, liquidation or reorganization of Wachovia, to all Additional Senior Obligations (each 5 as defined below under "Subordination of Subordinated Securities"). The Subordinated Indenture does not prohibit Wachovia from disposing of voting stock of its subsidiaries, including the stock of any of its banking subsidiaries. The events of default as to which payment of the principal of the Subordinated Securities may be accelerated are limited to events relating to the bankruptcy of Wachovia. See "Subordination of Subordinated Securities" on page 9 and "Events of Default; Limited Rights of Acceleration for Subordinated Securities" on page 11. The Indentures do not limit the amount of securities that may be issued and provide that securities may be issued at various times in one or more series. (Section 301) Neither the Indentures nor the securities limit the amount of other indebtedness which Wachovia or any of its subsidiaries may incur. In addition, the Indentures and the securities do not require Wachovia to repurchase or redeem or modify the terms of the securities upon a change in control or other events involving Wachovia that may adversely affect the credit quality of Wachovia. Because Wachovia is a holding company, its rights and the rights of its creditors, including the holders of the securities, to participate in the assets of any subsidiary upon the liquidation or reorganization of that subsidiary will be subject to the prior claims of the creditors of that subsidiary (including, in the case of a subsidiary bank, its depositors), except to the extent that Wachovia may itself be a creditor with recognized claims against the subsidiary. Claims on subsidiaries of Wachovia by creditors other than Wachovia include claims with respect to long-term debt and substantial obligations with respect to deposit liabilities, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings. See "Wachovia Corporation" on page 4. Unless we indicate otherwise in the applicable prospectus supplement, principal of and premium, if any, and interest on the securities will be payable at the office or agency of the applicable trustee maintained for such purpose in New York, New York, and at any other office or agency maintained by Wachovia for such purposes. However, we may, at our option, pay interest by mailing a check to the address of the person entitled to such interest as it appears on the Security Register. The transfer of each series of securities (other than Book-Entry Securities) may be registered at the corporate trust office of the applicable Trustee. (Sections 301, 305 and 1002) The corporate trust office of the Senior Trustee and the Subordinated Trustee is located in New York, New York. Interest on the securities will be paid to the person in whose name the securities are registered at the close of business on the Regular Record Date designated for an Interest Payment Date. (Section 307) The securities will be issued only in fully registered form without coupons and, unless otherwise indicated in the applicable prospectus supplement, in denominations of $1,000 or integral multiples of $1,000. (Section 302) We will not require any service charge for any registration of transfer or exchange of the securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange other than certain exchanges not involving any transfer. (Section 305) Each prospectus supplement relating to a particular series of debt securities that we offer (the "Offered Securities") will describe the specific terms of the Offered Securities. Those specific terms will include some or all of the following: . the title of the Offered Securities; . whether the Offered Securities are Senior Securities or Subordinated Securities; . any limit on the aggregate principal amount of the Offered Securities; . the date or dates on which the Offered Securities will mature; . the rate or rates (which may be fixed or variable) per annum at which the Offered Securities will bear interest, if any, the date or dates from which such interest, if any, will accrue, the dates on which such interest, if any, will be payable and the Regular Record Dates for such Interest Payment Dates; 6 . the place or places, if any, in addition to the office or agency of the applicable Trustee, where the principal of and premium, if any, and interest on the Offered Securities will be payable; . the period or periods within which, the price or prices at which and the terms and conditions upon which the Offered Securities may be redeemed, in whole or in part, at the option of Wachovia; . the obligation, if any, of Wachovia to redeem or purchase the Offered Securities pursuant to any sinking fund or analogous provisions or at the option of a Holder and the period or periods within which, the price or prices at which and the terms and conditions upon which Offered Securities will be redeemed or purchased, in whole or in part, pursuant to such obligation; . if other than denominations of $1,000 and any integral multiple of $1,000, the denominations in which the Offered Securities will be issuable; . the currency or currencies of payment of principal of and premium, if any, and interest on the Offered Securities if other than the currency of the United States; . any index used to determine the amount of payment of principal of, premium, if any, and interest on the Offered Securities; . if other than the principal amount thereof, the portion of the principal amount of the Offered Securities which will be payable upon the declaration of acceleration of the Maturity thereof; . the law which will govern the terms of the Offered Securities; . information with respect to book-entry procedures, if any; and . any other terms of the Offered Securities. (Section 301) Securities may be issued as "Original Issue Discount Securities" which will be offered and sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such Original Issue Discount Securities will be described in the applicable prospectus supplement. "Original Issue Discount Security" means any security which provides for an amount less than the principal amount thereof to be due and payable upon the declaration of acceleration of the Maturity thereof upon the occurrence of an Event of Default and the continuation of such Event of Default. (Section 101) Book-Entry Securities The securities of a series may be issued in the form of one or more Book- Entry Securities that will be deposited with a Depositary or its nominee identified in the applicable prospectus supplement. (Section 301) In such a case, Book-Entry Securities will be issued in aggregate denominations equal to the aggregate principal amount of securities represented by such Book-Entry Securities. Unless and until it is exchanged in whole or in part for securities in definitive registered form, a Book-Entry Security may not be transferred except as a whole by the applicable Depositary to a nominee of such Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of such successor. (Section 305) The specific terms of the depositary arrangement with respect to any securities to be represented by a Book-Entry Security will be described in the applicable prospectus supplement. We anticipate that the following provisions will apply to all depositary arrangements. Upon the issuance of a Book-Entry Security, the Depositary for such Book- Entry Security or its nominee will credit, on its book-entry registration and transfer system, the respective principal amounts of the securities represented by such Book-Entry Security to the accounts of persons that have accounts with such Depositary ("participants"). Wachovia or the underwriters or agents will designate such accounts. Participants include securities brokers and dealers, banks and trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly 7 ("indirect participants"). Persons who are not participants may beneficially own Book-Entry Securities held by the Depositary only through participants or indirect participants. Ownership of beneficial interests in any Book-Entry Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary or its nominee (with respect to interests of participants) and on the records of participants (with respect to interests of indirect participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws, as well as the limits on participation in the Depositary's book- entry system, may impair the ability to transfer beneficial interests in a Book-Entry Security. So long as the Depositary or its nominee is the registered owner of a Book- Entry Security, such Depositary or such nominee will be considered the sole owner or holder of the securities represented by such Book-Entry Security for all purposes under the applicable Indenture. Except as provided below, owners of beneficial interests in securities represented by Book-Entry Securities will not be entitled to have such securities registered in their names, will not be entitled to receive physical delivery of such securities in definitive form, and will not be considered the owners or holders of such securities under the applicable Indenture. Payments of principal of and any premium and interest on securities registered in the name of the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Book-Entry Security representing such securities. We expect that the Depositary for a series of securities or its nominee, upon receipt of any payment of principal, premium or interest, will credit immediately participants' accounts with payments in amounts proportionate to their beneficial interests in the Book-Entry Security, as shown on the records of such Depositary or its nominee. We also expect that payments by participants and indirect participants to owners of beneficial interests in such Book-Entry Security held through such persons will be governed by standing instructions and customary practices, as is now the case with securities registered in "street name," and will be the responsibility of such participants and indirect participants. Neither we, the applicable Trustee, any Authenticating Agent, any Paying Agent nor the Security Registrar for such securities will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in any Book-Entry Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. (Section 311) If the Depositary for securities of a series notifies Wachovia that it is unwilling or unable to continue as Depositary or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act, Wachovia has agreed to appoint a successor depositary. If such a successor is not appointed by Wachovia within 90 days, Wachovia will issue securities of such series in definitive registered form in exchange for the Book-Entry Security. In addition, Wachovia may at any time and in its sole discretion determine that the securities of any series will no longer be represented by Book-Entry Securities. In that event, Wachovia will issue securities of such series in definitive registered form in exchange for such Book-Entry Securities. Further, if Wachovia so specifies with respect to the securities of a series, or if an Event of Default, or an event which with notice, lapse of time or both would be an Event of Default with respect to the securities of such series has occurred and is continuing, an owner of a beneficial interest in a Book-Entry Security representing securities of such series may receive securities of such series in definitive registered form. In any such case, an owner of a beneficial interest in a Book-Entry Security will be entitled to physical delivery in definitive registered form of securities of the series represented by such Book-Entry Security equal in principal amount to such beneficial interest and to have such securities registered in such owner's name. (Section 305) Securities so issued in definitive form will be issued in denominations of $1,000 and integral multiples of $1,000 and will be issued in registered form only, without coupons. Restrictive Covenants Applicable to Senior Securities The Senior Indenture contains a covenant that we will not, directly or indirectly, . sell or permit to be issued any shares of capital stock of a Principal Subsidiary Bank (other than directors' qualifying shares) or any shares of capital stock of a Principal Subsidiary or any securities 8 convertible into or rights to subscribe to such capital stock, unless, after giving effect to that transaction and the shares issuable upon conversion or exercise of rights into that capital stock, Wachovia will own, directly or indirectly, at least 80% of the outstanding shares of capital stock of each class of that Principal Subsidiary or Principal Subsidiary Bank, or . pay any dividend or make any other distribution in capital stock of a Principal Subsidiary Bank or of any Principal Subsidiary, unless the Principal Subsidiary Bank or Principal Subsidiary to which the transaction relates, after obtaining any necessary regulatory approvals, unconditionally guarantees payment of the principal of and any premium and interest on the Senior Securities. (Section 1005 of the Senior Indenture) The term "Principal Subsidiary" or "Principal Subsidiary Bank" means any Subsidiary or Subsidiary Bank, the consolidated assets of which constitute 10% or more of the assets of Wachovia and, in the case of a Principal Subsidiary, owns shares of a Principal Subsidiary Bank. (Section 101) At the date of this prospectus, the Subsidiary Bank which was the Principal Subsidiary Bank was Wachovia Bank. There is no restriction in the Senior Indenture on the ability of a Principal Subsidiary Bank to sell assets. The Senior Indenture also prohibits Wachovia from creating, assuming, incurring or suffering to exist any mortgage, pledge, encumbrance or lien or charge of any kind on the capital stock of a Principal Subsidiary Bank (other than directors' qualifying shares) or the capital stock of a Principal Subsidiary, except that the Senior Indenture permits: . liens for taxes that are not due, are payable without penalty or are being contested in good faith by appropriate proceedings, and . liens resulting from any judgment that has not remained undischarged or unstayed for more than 60 days. (Section 1006 of the Senior Indenture) Subordination of Subordinated Securities The obligations of Wachovia to make any payment of the principal of and premium, if any, and interest on the Subordinated Securities will be subordinate and junior in right of payment to all Senior Indebtedness of Wachovia and, in certain circumstances relating to the dissolution, winding-up, liquidation of or reorganization of Wachovia, to all Additional Senior Obligations. (Article Thirteen of the Subordinated Indenture) The Subordinated Indenture defines "Senior Indebtedness" as . all indebtedness of Wachovia for money borrowed, whether now outstanding or later created, assumed or incurred, other than . the Subordinated Securities, . the 7% Subordinated Notes due 1999 of Wachovia in the aggregate principal amount of $300 million (the "7% Subordinated Notes"), . any obligation Ranking on a Parity with the Subordinated Securities (which includes the 6 3/8% Subordinated Notes due 2003 of Wachovia in the aggregate principal amount of $250 million and the 6 3/8% Subordinated Notes due 2009 of Wachovia in the aggregate principal amount of $250 million (collectively, the "6 3/8% Subordinated Notes"), the 6.80% Subordinated Notes due 2005 of Wachovia in the aggregate principal amount of $250 million (the "6.80% Subordinated Notes"), the 6.605% Subordinated Notes due October 1, 2025 of Wachovia in the aggregate principal amount of $250 million, the holders of which may elect to have all or a portion thereof redeemed on October 1, 2005 (the "6.605% Subordinated Notes"), the 6 1/4% Subordinated Notes due 2008 of Wachovia in the aggregate principal amount of $350,000,000 (the "6 1/4% Subordinated Notes"), the 5 5/8% Subordinated Notes due 2008 of Wachovia in the aggregate principal amount of $400,000,000 (the "5 5/8% Subordinated Notes") and the 6.150% Subordinated Notes due 2009 of Wachovia in the aggregate principal amount of $400,000,000 (the "6.150% Subordinated Notes")), or any obligation Ranking Junior to the Subordinated Securities and 9 . any deferrals, renewals or extensions of any such Senior Indebtedness. The term "indebtedness of the Corporation for money borrowed" means any obligation of, or any obligation guaranteed by, Wachovia for repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, and any deferred obligations for payment of the purchase price of property or assets acquired other than in the ordinary course of business. The Subordinated Indenture defines "Additional Senior Obligations" as all indebtedness of Wachovia, whether now outstanding or later created, assumed or incurred, for claims in respect of derivative products such as interest and foreign exchange rate contracts, commodity contracts and similar arrangements, but Additional Senior Obligations do not include: . any claims in respect of Senior Indebtedness, or . any obligations . Ranking Junior to the Subordinated Securities, or . Ranking on a Parity with the Subordinated Securities. For purposes of this definition, "claim" has the meaning assigned to it in Section 101(4) of the United States Bankruptcy Code of 1978. The Subordinated Indenture does not limit or prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations. The Subordinated Indenture defines "Ranking Junior to the Subordinated Securities" as any obligation of Wachovia that . ranks junior to and not equally with or prior to the Subordinated Securities in right of payment upon the happening of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to Wachovia as a whole, whether voluntary or involuntary, and . is specifically designated as ranking junior to the Subordinated Securities by express provisions in the instrument creating or evidencing that obligation. The Subordinated Indenture defines "Ranking on a Parity with the Subordinated Securities" as any obligation of Wachovia that . ranks equally with and not prior to the Subordinated Securities in right of payment upon the happening of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to Wachovia as a whole, whether voluntary or involuntary, and . is specifically designated as ranking on a parity with the Subordinated Securities by express provision in the instrument creating or evidencing such obligation. (Section 101 of the Subordinated Indenture) The Subordinated Securities will be subordinate in right of payment to all Senior Indebtedness, as provided in the Subordinated Indenture. No payment of the principal of and premium, if any, or interest in respect of the Subordinated Securities may be made if there is a default in payment with respect to Senior Indebtedness or an event of default with respect to any Senior Indebtedness that results in the acceleration of its maturity and that default or event of default continues. Upon any payment or distribution of assets to creditors upon any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to Wachovia as a whole, whether voluntary or involuntary, . the holders of all Senior Indebtedness will first be entitled to receive payment in full before the Holders of the Subordinated Securities will be entitled to receive any payment of the principal of and premium, if any, or interest on the Subordinated Securities, and 10 . if after the procedure described in the bullet point above, . any cash, property or securities remain available for payment or distribution in respect of the Subordinated Securities ("Excess Proceeds"), and . creditors in respect of Additional Senior Obligations have not received payment in full of amounts due or to become due or payment of those amounts has not been duly provided for, then those Excess Proceeds will first be applied to pay in full all the Additional Senior Obligations before any payment may be made on the Subordinated Securities. If the Holders of Subordinated Securities receive payment and are aware at the time of receiving payment that all Senior Indebtedness and Additional Senior Obligations have not been paid in full, then that payment will be held in trust for the benefit of the holders of Senior Indebtedness and/or Additional Senior Obligations, as the case may be. (Section 1301 of the Subordinated Indenture) By reason of this subordination, in the event of insolvency, Holders of the Subordinated Securities may recover less, proportionately, than holders of Senior Indebtedness and holders of Additional Senior Obligations. Neither the Subordinated Securities (and the 6 3/8% Subordinated Notes, the 6.80% Subordinated Notes, the 6.605% Subordinated Notes, the 6 1/4% Subordinated Notes, the 5 5/8% Subordinated Notes and the 6.150% Subordinated Notes, which Rank on a Parity with the Subordinated Securities) nor the 7% Subordinated Notes are subordinate or senior to the other. But the 7% Subordinated Notes are subordinate to Senior Indebtedness and Additional Senior Obligations and to all other obligations of Wachovia to its creditors (subject to certain exceptions specified in the indenture relating to the 7% Subordinated Notes). As a result of the differences between the subordination provisions applicable to the Subordinated Securities and the 6 3/8% Subordinated Notes, the 6.80% Subordinated Notes, the 6.605% Subordinated Notes, the 6 1/4% Subordinated Notes, the 5 5/8% Subordinated Notes and the 6.150% Subordinated Notes and those applicable to the 7% Subordinated Notes, if there is any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding up of or relating to Wachovia, the holders of the Subordinated Securities and the 6 3/8% Subordinated Notes, the 6.80% Subordinated Notes, the 6.605% Subordinated Notes, the 6 1/4% Subordinated Notes, the 5 5/8% Subordinated Notes and the 6.150% Subordinated Notes may receive more, proportionately, than the holders of the 7% Subordinated Notes. Events of Default; Limited Rights of Acceleration for Subordinated Securities The Indentures (each with respect to any series of securities) define an "Event of Default" as any one of the following events (whatever the reason and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental entity or, with respect to the Subordinated Securities, whether it is occasioned by the subordination provisions of the Subordinated Indenture): . failure, for 30 days, to pay any interest on any security of that series when due and payable (in the case of Subordinated Securities, whether or not the subordination provisions of the Subordinated Indenture prohibit that payment); . failure to pay principal of or any premium on any security of that series when due; . failure to deposit any sinking fund payment, when due, in respect of any security of that series (in the case of Subordinated Securities, whether or not the subordination provisions of the Subordinated Indenture prohibit that payment); . failure, for 60 days after written notice, to perform any other covenants or warranties of Wachovia in the applicable Indenture (other than a covenant included in the applicable Indenture solely for the benefit of a series of securities under it other than that series); . the entry of a decree or order for relief in respect of Wachovia by a court having jurisdiction in the premises in an involuntary case under Federal or state bankruptcy laws and the continuance of that decree or order unstayed and in effect for 60 consecutive days; 11 . the commencement by Wachovia of a voluntary case under Federal or state bankruptcy laws or the consent by Wachovia to the entry of a decree or order for relief in an involuntary case under such laws; . with respect to Senior Securities only, unless otherwise provided in the applicable prospectus supplement, failure to pay when due or acceleration of securities or any other indebtedness for borrowed money, in an aggregate principal amount more than $50,000,000, of Wachovia, a Principal Subsidiary or a Principal Subsidiary Bank under the terms of the instrument(s) under which the indebtedness is issued or secured, unless the acceleration is annulled, or the indebtedness is discharged, or there is deposited in trust enough money to discharge the indebtedness, within 10 days after written notice; and . any other Event of Default provided with respect to securities of that series. (Section 501) Acceleration of Senior Securities. If an Event of Default with respect to Senior Securities of any series at the time Outstanding occurs and continues, either the Senior Trustee or the Holders of at least 25% in aggregate principal amount of Outstanding Senior Securities of that series may declare the principal amount (or, if those Senior Securities are Original Issue Discount Securities, the portion of the principal amount specified in their terms) of all Senior Securities of that series due and payable immediately. At any time after a declaration of acceleration with respect to Senior Securities of any series has been made, but before a judgment or decree based on acceleration has been obtained, the Holders of a majority in aggregate principal amount of the Outstanding Senior Securities of that series may, under certain circumstances, rescind and annul that acceleration. (Section 502 of the Senior Indenture) Acceleration of Subordinated Securities. Unless specifically stated in the applicable prospectus supplement for a particular series of Subordinated Securities, the payment of the principal of the Subordinated Securities may be accelerated only if there is an Event of Default as described in the fifth or sixth bullet points above (a "Bankruptcy Event of Default") and there is no right of acceleration of the payment of principal of the Subordinated Securities of that series upon a default in the payment of principal, premium, if any, or interest, if any, or in the performance of any covenant or agreement in the Subordinated Securities or Subordinated Indenture. If a Bankruptcy Event of Default with respect to Subordinated Securities of any series at the time Outstanding occurs and continues, either the Subordinated Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Subordinated Securities of that series may declare the principal amount (or, if the Subordinated Securities of that series are Original Issue Discount Securities, the portion of the principal amount specified in their terms) of all Subordinated Securities of that series due and payable immediately. At any time after a declaration of acceleration with respect to Subordinated Securities of any series, but before a judgment or decree based on that acceleration has been obtained, the Holders of a majority in aggregate principal amount of the Outstanding Subordinated Securities of that series may, under certain circumstances, rescind and annul that acceleration. (Section 502 of the Subordinated Indenture) General. If there is a default in the payment of principal, premium, if any, or interest, if any, or the performance of any covenant or agreement in the securities or the Indentures, the applicable Trustee, subject to certain limitations and conditions, may institute judicial proceedings to enforce payment of that principal, premium, if any, or interest, if any, or to obtain the performance of that covenant or agreement or any other proper remedy. (Section 503) Under certain circumstances, the applicable Trustee may withhold notice of a default to the Holders of the securities if the applicable Trustee in good faith determines that the withholding of that notice is in the best interest of the Holders, and the applicable Trustee will withhold the notice for certain defaults for a period of 30 days. (Section 602) You should review the prospectus supplement relating to any series of Offered Securities that are Original Issue Discount Securities for particular provisions relating to acceleration of the Stated Maturity of a portion of the principal amount of that series of Original Issue Discount Securities if an Event of Default occurs and continues. 12 The Indentures provide that, subject to the duty of the applicable Trustee during default to act with the required standard of care, the applicable Trustee does not have to exercise any of its rights or powers under the applicable Indenture at the request or direction of any of the Holders, unless those Holders have offered to the applicable Trustee reasonable security or indemnity. (Section 603) Subject to the above sentence and to certain other conditions, the Holders of a majority in aggregate principal amount of the Outstanding Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable Trustee, or exercising any trust or power conferred on the applicable Trustee, with respect to the securities of that series. (Section 512) No Holders of any securities of any series may institute any proceeding with respect to the applicable Indenture, or for the appointment of a receiver or trustee or for any remedy relating to that appointment, . unless those Holders have already given to the applicable Trustee written notice of a continuing Event of Default, . unless the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series have made written request, and offered reasonable indemnity, to the applicable Trustee to institute such a proceeding as trustee, . if the Trustee has received from the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series a direction inconsistent with the written request, and . unless the Trustee has failed to institute the proceeding within 60 days. (Section 507) The above limitations do not apply to a suit instituted by a Holder of a security for enforcement of payment of the principal of and premium, if any, or interest on the security on or after the respective due dates described in the security. (Section 508) We are required to furnish to each Trustee annually a statement as to the performance by us of certain of our obligations under the applicable Indenture and as to any default in such performance. (Section 1007 of the Senior Indenture; Section 1005 of the Subordinated Indenture) Modification and Waiver Wachovia and the applicable Trustee may modify and amend the Indentures with the consent of the Holders of at least 66 2/3% in aggregate principal amount of the Outstanding Securities of each series issued under the applicable Indenture and affected by the modification or amendment, but no such modification or amendment may, without the consent of the Holders of each Outstanding Security of the series affected by the modification or amendment . change the Stated Maturity of the principal of, or any installment of principal of or interest on, any security of that series; . reduce the principal amount of or premium, if any, or interest on, any security of any series (including in the case of an Original Issue Discount Security the amount payable upon acceleration of maturity); . change the place or currency of payment of principal of or the premium, if any, or interest on any security of that series; . impair the right to institute suit for the enforcement of any payment on any security of such series on or after its Stated Maturity (or, in the case of redemption, on or after the Redemption Date); . in the case of the Subordinated Securities, modify the subordination provisions in a manner adverse to the Holders of the Subordinated Securities of that series; or . reduce the percentage in principal amount of Outstanding Securities of any series, the consent of whose Holders is required for modification or amendment of the applicable Indenture or for waiver of compliance with certain provisions of the applicable Indenture or for waiver of certain defaults. 13 (Section 902) The Holders of at least a 66 2/3% in aggregate principal amount of the Outstanding Securities of any series may, on behalf of all Holders of that series, waive compliance by Wachovia with certain restrictive provisions of the applicable Indenture. (Section 1008 of the Senior Indenture; Section 1006 of the Subordinated Indenture) The Holders of a majority in aggregate principal amount of the Outstanding Securities of any series may, on behalf of all Holders of that series, waive any past default under the applicable Indenture, except a default in the payment of principal, premium, if any, or interest and regarding certain covenants. (Section 513) Consolidation, Merger and Sale of Assets Under the Indentures, Wachovia may not consolidate with or merge into any other corporation or sell, convey, exchange, transfer or lease its properties and assets substantially as an entirety to any Person, unless . any successor or purchaser is a corporation organized under the laws of any domestic jurisdiction; . any such successor or purchaser expressly assumes Wachovia's obligations on the securities and under the Indentures; . immediately after the transaction, no Event of Default, and no event that, after notice or lapse of time or both, would become an Event of Default, occurs and continues; and . certain other conditions are met. (Section 801) Assumption by Subsidiary A Subsidiary may assume Wachovia's obligations under the Senior Indenture or the Subordinated Indenture (including Wachovia's obligation to pay principal of and premium, if any, and interest on the securities, but excluding Wachovia's obligation to comply with certain covenants) provided that: . the Subsidiary expressly assumes Wachovia's obligations under the applicable Indenture; . Wachovia guarantees the Subsidiary's obligations; . the Subsidiary agrees to indemnify each Holder against certain taxes and expenses relating to, or incurred directly in connection with, the assumption of obligations; . immediately after giving effect to the assumption, no Event of Default, and no event which, after notice or lapse of time, or both, would become an Event of Default, has occurred and continues; . certain Opinions of Counsel and Officers' Certificates are delivered to the applicable Trustee; and . certain other obligations are met. (Section 803) Trustee The Senior Trustee. The Chase Manhattan Bank is the Senior Trustee under the Senior Indenture. The Chase Manhattan Bank maintains a deposit account and conducts other banking transactions with Wachovia and its subsidiaries in the ordinary course of business and serves as trustee with respect to the 6.625% Senior Notes due November 15, 2006 of Wachovia in the aggregate principal amount of $200 million, which are outstanding pursuant to the Senior Indenture. The Senior Indenture provides for the indemnification of the Senior Trustee by Wachovia under certain circumstances. The Subordinated Trustee. The Chase Manhattan Bank also serves as Subordinated Trustee under the Subordinated Indenture and in that capacity serves as trustee with respect to the 6 1/4% Subordinated Notes, the 5 5/8% Subordinated Notes, the 6.150% Subordinated Notes and any future issuances of Subordinated Securities. An affiliate of the Subordinated Trustee, Chase Manhattan Trust Company, National Association, serves as trustee under the indentures pursuant to which the 7% Subordinated Notes, the 6 3/8% Subordinated Notes, the 6.80% Subordinated Notes and the 6.605% Subordinated Notes are outstanding. The Subordinated Indenture provides for the indemnification of the Subordinated Trustee by Wachovia under certain circumstances. 14 PLAN OF DISTRIBUTION We may sell the securities from time to time: . directly to purchasers, . through agents, . through underwriters or dealers or . through a combination of these methods. General Underwriters, dealers, agents and remarketing firms that participate in the distribution of the Offered Securities may be "underwriters" as defined in the Securities Act of 1933, as amended. Any discounts or commissions they receive from us and any profits they receive on the resale of the Offered Securities may be treated as underwriting discounts and commissions under the Securities Act of 1933, as amended. We will identify any underwriters, agents or dealers and describe their commissions, fees or discounts in the applicable prospectus supplement or pricing supplement. Agents We may designate agents to sell the securities. The agents will agree to use their best efforts to solicit purchases for the period of their appointment. Underwriters If underwriters are used in a sale, they will acquire the Offered Securities for their own account. The underwriters may resell the securities in one or more transactions, including negotiated transactions. These sales will be made at a fixed public offering price or at varying prices determined at the time of the sale. We may offer the securities to the public through an underwriting syndicate or through a single underwriter. Unless the applicable prospectus supplement or pricing supplement states otherwise, the obligations of the underwriters to purchase the Offered Securities will be subject to certain conditions contained in an underwriting agreement that Wachovia and the underwriters will enter into. The underwriters will be obligated to purchase all of the securities of the series offered if any of the securities are purchased, unless the applicable prospectus supplement or pricing supplement says otherwise. Any initial public offering price and any discounts or concessions allowed, re-allowed or paid to dealers may be changed from time to time. Dealers We may sell securities to one or more remarketing firms, acting as principals for their own accounts or as agents for Wachovia, who will remarket the securities upon purchasing them in accordance with a redemption or repayment pursuant to the terms of the securities. Direct Sales We may choose to sell the Offered Securities directly. In this case, no underwriters or agents would be involved. Institutional Purchasers We may authorize agents, dealers or underwriters to solicit certain institutional investors to purchase Offered Securities on a delayed delivery basis pursuant to delayed delivery contracts providing for payment and delivery on a specified future date. The applicable prospectus supplement or pricing supplement will provide the details of any such arrangement, including the offering price and commissions payable on the solicitations. 15 We will enter into such delayed delivery contracts only with institutional purchasers that we approve. Such institutions may include commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions. Indemnification We may have agreements with agents, underwriters, dealers and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended. Agents, underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with, or perform services for, us in the ordinary course of business. This includes commercial banking and investment banking transactions. Market Making, Stabilization and Other Transactions Each series of securities will be a new issue and will have no established trading market. We may elect to list any series of securities on an exchange. Any underwriters that we use in the sale of Offered Securities may make a market in such securities, but may discontinue such market making at any time without notice. Therefore, we cannot assure that the securities will have a liquid trading market. Any underwriter may engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act of 1934, as amended. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would otherwise be in the absence of such transactions. The underwriters may, if they begin these transactions, end them at any time. NASD Matters The underwriting and agency arrangements for any offering of the Offered Securities in which Wachovia Securities, Inc. will participate will comply with the requirements of Rule 2720 of the National Association of Securities Dealers, Inc. (the "NASD") regarding an NASD member firm's participating in distributing its affiliate's securities. NASD members participating in such an offering will not confirm sales of the Offered Securities to discretionary accounts. EXPERTS Ernst & Young LLP, independent auditors, have audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 1998, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. LEGAL MATTERS William M. Watson, Jr., Esq., Senior Vice President, Counsel and Secretary of Wachovia, will issue an opinion regarding the validity of the Offered Securities for Wachovia. Simpson Thacher & Bartlett, New York, New York will issue an opinion as to certain legal matters for any underwriters or agents. As to matters of New York law, Mr. Watson will rely on the opinion of Simpson Thacher & Bartlett. From time to time, Simpson Thacher & Bartlett may provide legal services to Wachovia and its subsidiaries. 16 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Estimated expenses in connection with the issuance and distribution of the securities being registered, other than underwriting compensation, are as follows: Securities and Exchange Commission registration fee................ $472,600 NASD filing fee.................................................... $ 30,500 Blue Sky fees and expenses......................................... $ 3,000 Accounting services................................................ $ 20,000 Printing and engraving............................................. $ 20,000 Fees of indenture trustees......................................... $ 40,000 Rating agency fees................................................. $ 15,000 Miscellaneous...................................................... $ 48,900 -------- Total............................................................ $650,000 ========
Item 15. Indemnification of Officers and Directors. As permitted by the North Carolina Business Corporation Act (the "NCBCA"), Wachovia's Articles of Incorporation provide that no director of Wachovia will be held personally liable for monetary damages for such director's breach of duty as a director. This limitation of liability does not relieve directors from liability for (i) acts or omissions that the director at the time of such breach knew or believed were clearly in conflict with the best interests of Wachovia, (ii) any liability under Section 55-8-33 of the NCBCA for unlawful distributions or other acts for which the director is personally liable to Wachovia, (iii) any transaction from which the director is adjudged to have derived an improper personal benefit, or (iv) acts or omissions occurring prior to the date the provision in the Articles of Incorporation became effective. Pursuant to the NCBCA, Sections 55850, et seq., as amended, a director may be indemnified against liability and litigation expense, including reasonable attorneys' fees, arising out of his status as such or his activities in such capacity, provided, however, that such person (i) conducted himself in good faith; (ii) reasonably believed (x) in the case of conduct in his official capacity with Wachovia, that his conduct was in its best interests, and (y) in all other cases that his conduct was at least not opposed to its best interests; and (iii) in the case of any criminal proceeding, had no reason to believe his conduct was unlawful. Mandatory indemnification is available under the NCBCA for a director who is wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of Wachovia, against reasonable expenses incurred by him in connection with the proceeding. A corporation may not indemnify under the NCBCA in connection with any proceeding by or in the right of a corporation in which the director was adjudged liable to the corporation, or with any other proceeding charging improper personal benefit to him, whether or not in connection with his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. Where a proceeding is by or in the right of a corporation, indemnification of a director is limited to reasonable expenses if the proceeding is concluded without a final adjudication on the issue of liability. The NCBCA provides for an advance for expenses incurred by a director in defending a proceeding. The expenses may be paid by a corporation in advance of the final disposition of such proceeding as authorized by the board of directors in specific cases or as authorized or required under any provision in the articles of incorporation or bylaws or by any applicable resolution or contract upon receipt of an undertaking by or on behalf of the director to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation against such expenses. 17 Item 16. Exhibits. See Exhibit Index. Item 17. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or provided to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of the Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of the Registration Statement as of the time it was declared effective. (2) For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the 18 payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. 19 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Winston-Salem, State of North Carolina, on May 24, 1999. Wachovia Corporation /s/ L.M. Baker, Jr. By: _________________________________ L.M. Baker, Jr. Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons on behalf of the registrant and in the capacities indicated, on May 24, 1999.
Signature Capacity --------- --------
L.M. Baker, Jr.* Chairman, Chief Executive ______________________________________ Officer and Director L.M. Baker, Jr. (Principal Executive Officer) John G. Medlin, Jr.* Chairman Emeritus ______________________________________ John G. Medlin, Jr. James S. Balloun* Director ______________________________________ James S. Balloun Peter C. Browning* Director ______________________________________ Peter C. Browning John T. Casteen III* Director ______________________________________ John T. Casteen III John L. Clendenin* Director ______________________________________ John L. Clendenin Thomas K. Hearn, Jr.* Director ______________________________________ Thomas K. Hearn, Jr. George W. Henderson, III* Director ______________________________________ George W. Henderson, III W. Hayne Hipp* Director ______________________________________ W. Hayne Hipp
20
Signature Capacity --------- -------- Robert A. Ingram* Director ______________________________________ Robert A. Ingram George R. Lewis* Director ______________________________________ George R. Lewis Elizabeth Valk Long* Director ______________________________________ Elizabeth Valk Long Lloyd U. Noland, III* Director ______________________________________ Lloyd U. Noland, III Sherwood H. Smith, Jr.* Director ______________________________________ Sherwood H. Smith, Jr. John C. Whitaker, Jr.* Director ______________________________________ John C. Whitaker, Jr. Robert S. McCoy, Jr.* Vice Chairman and ______________________________________ Chief Financial Officer Robert S. McCoy, Jr. (Principal Financial Officer) Donald K. Truslow* Senior Executive Vice ______________________________________ President, Comptroller Donald K. Truslow and Treasurer (Principal Accounting Officer) /s/ William M. Watson, Jr. *By:_________________________________ William M. Watson, Jr. Attorney-in-Fact
21 EXHIBIT INDEX
Exhibit No. ------- (1) -- Form of Underwriting Agreement. (4)(a) -- Indenture dated as of August 15, 1996 between Wachovia Corporation and The Chase Manhattan Bank, as Trustee, relating to the Senior Securities (incorporated by reference to Exhibit 4(a) to Post- Effective Amendment No. 1 to Wachovia Corporation's Registration Statement on Form S-3 (File No. 333-6319)). (4)(b) -- Indenture dated as of July 15, 1998 between Wachovia Corporation and The Chase Manhattan Bank, as Trustee, relating to the Subordinated Securities. (5)(a) -- Opinion of William M. Watson, Jr., Senior Vice President, Counsel and Secretary of Wachovia Corporation. (5)(b) -- Opinion of Simpson Thacher & Bartlett. (12) -- Statement setting forth computation of the ratio of earnings to fixed charges. (23)(a) -- Consent of Ernst & Young LLP. (23)(b) -- Consent of KPMG LLP. (23)(c) -- Consent of William M. Watson, Jr., Senior Vice President, Counsel and Secretary of Wachovia Corporation (included in Exhibit 5(a)). (23)(d) -- Consent of Simpson Thacher & Bartlett (included in Exhibit 5(b)). (24)(a) -- Power of Attorney of Directors of Wachovia Corporation. (24)(b) -- Power of Attorney of Officers of Wachovia Corporation. (25)(a) -- Statement of eligibility of the Senior Trustee on Form T-1 with respect to the Senior Securities. (25)(b) -- Statement of eligibility of the Subordinated Trustee on Form T-1 with respect to the Subordinated Securities.
EX-1 2 UNDERWRITING AGREEMENT EXHIBIT 1 WACHOVIA CORPORATION $_________ ____% _________ Notes due ________,____ UNDERWRITING AGREEMENT ---------------------- ________,____ MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED [OTHER NAMES] as the Several Underwriters c/o Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: Wachovia Corporation, a North Carolina corporation (the "Company"), confirms its agreement (the "Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in Schedule A hereto (collectively, the "Underwriters," which term shall also include any underwriter substituted as hereinafter provided in Section 9 hereof), with respect to the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of $_________ aggregate principal amount of ____% _______ Notes due _______,____ (the "Notes"). The Underwriters, who may be members of an underwriting syndicate managed by Merrill Lynch, have each agreed to the provisions contained in the Merrill Lynch Agreement Among Underwriters for Global Bonds dated as of _______, ____. 2 The Company understands that the Underwriters propose to make a public offering of the Notes as soon as the Underwriters deem advisable after this Agreement has been executed and delivered. The Notes will be issued pursuant to an indenture, dated as of _______, ____ (the "Indenture"), between the Company and The Chase Manhattan Bank, as trustee (the "Trustee"). The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-59165) (the "First Registration Statement"), Post-Effective Amendment No. 1 to the First Registration Statement and a Registration Statement on Form S-3 (No. 333-_____) (the "Second Registration Statement"), which constitutes Post-Effective Amendment No. 2 to the First Registration Statement, for the registration of debt securities (including the Notes) under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statements, as amended, have been declared effective by the Commission, and the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statements, as amended, including the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434 Information"), are collectively referred to herein as the "Registration Statement"; and the final prospectus and the final prospectus supplement relating to the offering of the Notes, in the form first furnished to the Underwriters by the Company for use in connection with the offering of the Notes, are collectively referred to herein as the "Prospectus"; provided, however, that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include all documents incorporated therein by reference pursuant to the Securities and Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of this Agreement. A "preliminary prospectus" shall be deemed to refer to any prospectus used before the registration statement became effective and any prospectus that omitted, as applicable, the Rule 430A Information, the Rule 434 Information or other information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used after such effectiveness and prior to the execution and delivery of underwriting agreement. For purposes of this Agreement, all references to the Registration Statement, Prospectus or preliminary prospectus or to any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Agreement to financial statements and schedules and other information that is "contained," "included" or "stated" in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that are or are deemed to be incorporated by reference in the Registration Statement or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act that is or is deemed to be incorporated by reference in the Registration Statement or the Prospectus, as the case may be. 3 Section 1. Representations and Warranties. The Company represents ------------------------------ and warrants to each Underwriter as of the date hereof and as of the Closing Time (as hereinafter defined) as follows: (i) At the time the Registration Statement became effective and as of the date hereof, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the "1939 Act Regulations"), and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as of its issue date and at Closing Time, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, the Company makes no representations or warranties as to (A) that part of the Registration Statement which constitutes the Statement of Eligibility and Qualification (Form T-1) under the 1939 Act of the Trustee or (B) the information contained in the statements set forth under the heading "Underwriting" in the Prospectus Supplement. Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by the Underwriters expressly for use in the Registration Statement or the Prospectus. (ii) The documents incorporated or deemed to be incorporated by reference in the Registration Statement or Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the "1934 Act Regulations"). (iii) To the best knowledge of the Company, Ernst & Young, LLP, the accountants who certified the financial statements and supporting schedules included in or incorporated by reference into the Registration Statement, are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iv) This Agreement has been duly authorized, executed and delivered by the Company. (v) The Company is not, and upon the issuance of the Notes as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"). (vi) No authorization, approval, consent or order of any court or governmental authority or agency is necessary in connection with the issuance of the Notes, except such 4 as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws and the qualification of the Indenture under the 1939 Act. (vii) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, there has been no material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business. (viii) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of North Carolina with corporate power to own, lease and operate its properties and to conduct its business as described in the Prospectus, to enter into and perform its obligations under this Agreement, the Indenture and the Notes; the Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character or location of its properties or the nature or the conduct of its business requires such qualification, except for any failures to be so qualified or in good standing which, taken as a whole, are not material to the Company and its subsidiaries, considered as one enterprise. (ix) Wachovia Bank, National Association ("Wachovia Bank") is a national banking association duly organized and validly existing under the laws of the United States, continues to hold a valid certificate to do business as such and has full power and authority to conduct its business as such and to own, lease and operate its properties and is duly authorized to transact business and is in good standing in each jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or to be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (x) The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms; the Indenture conforms to all statements relating thereto contained in the Prospectus; and the Indenture has been duly qualified under the 1939 Act. (xi) The Notes have been duly authorized by the Company and have been duly executed by the Company and, when authenticated in the manner provided for in the Indenture and delivered against payment therefor as described in the Prospectus, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, will be in the form contemplated by, and entitled to the benefits of, the Indenture and will conform to all statements relating thereto in the Prospectus. 5 (xii) The execution, delivery and performance of this Agreement, the Indenture and the Notes and the consummation of the transactions contemplated herein and therein and compliance by the Company with its obligations hereunder and thereunder will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or Wachovia Bank pursuant to, any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or Wachovia Bank is a party or by which it or either of them may be bound, or to which any of the property or assets of the Company or Wachovia Bank is subject (except for conflicts, breaches and defaults which would not, individually or in the aggregate, be materially adverse to the Company and its subsidiaries taken as a whole or materially adverse to the transactions contemplated by this Agreement), nor will such action result in any material violation of the provisions of the articles of incorporation or by-laws of the Company, or any applicable law, administrative regulation or administrative or court decree. Each certificate signed by any officer of the Company and delivered to the Underwriters or counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to the Underwriters as to the matters covered thereby. (xiii) There is not pending or threatened any action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of the Company threatened, against or affecting the Company or any of its subsidiaries which is required to be disclosed in the Registration Statement and the Prospectus (other than as stated therein). Section 2. Sale and Delivery to Underwriters; Closing. ------------------------------------------ (a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, the principal amount of the Notes set forth in Schedule A hereto opposite the name of such Underwriter at a purchase price of _____% of the principal amount of the Notes, plus any additional number of Notes that such Underwriter may become obligated to purchase pursuant to the provisions of Section 9 hereof. (b) Payment of the purchase price, and delivery of certificates, for the Notes shall be made at the office of Simpson Thacher & Bartlett, or at such other place as shall be agreed upon by the Underwriters and the Company, at 10:00 A.M. New York time on the third business day after the date hereof, or such other time not later than ten business days after such date as shall be agreed upon by the Underwriters and the Company (such time and date of payment and delivery being herein called "Closing Time"). Payment shall be made to the Company by wire transfer or certified or official bank check of same day funds payable to the order of the Company, against delivery to the Underwriters of certificates for the Notes to be purchased by it (unless such Notes are issuable only in the form of one or more global securities registered in the name of a depository or a nominee of a depository, in which event the Underwriters' interest in such global certificate shall be noted in a manner satisfactory to the 6 Underwriters and their counsel). Unless otherwise agreed, certificates for the Notes shall be deposited with a custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. Section 3. Covenants of the Company. The Company covenants with ------------------------ each Underwriter as follows: (a) The Company will notify the Underwriters promptly, and confirm the notice in writing, (i) of any amendment to the Registration Statement (including any post-effective amendment), (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) The Company will give the Underwriters notice of its intention to file or prepare (i) any amendment to the Registration Statement (including any post-effective amendment), (ii) any amendment or supplement to the Prospectus (including any revised prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Notes), or (iii) any document that would as a result thereof be incorporated by reference in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriters with copies of any such amendment, supplement or other document within a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment, supplement or other document or use any such prospectus to which the Underwriters or counsel for the Underwriters shall reasonably object. Subject to the foregoing, the Company will file the Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement. (c) The Company will deliver to the Underwriters as many signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) as the Underwriters may reasonably request and will also deliver to the Underwriters a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits). (d) The Company will furnish to the Underwriters, from time to time during the period when the Prospectus is required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented) as the Underwriters may reasonably request for the purposes contemplated by the 1933 Act or the 1933 Act Regulations. (e) If at any time when the Prospectus is required by the 1933 Act to be delivered in connection with sales of the Notes, any event shall occur as a result of which the Prospectus as then amended or supplemented will include any untrue statement of a material fact 7 or omit to state any material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading or if it shall be necessary to amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will, subject to paragraph (b) above, promptly prepare and file with the Commission such amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance and the Company will furnish to the Underwriters a reasonable number of copies of such amendment or supplement. (f) The Company will endeavor, in cooperation with the Underwriters, to qualify the Notes for offering and sale under the applicable securities laws of such states and the other jurisdictions of the United States as the Underwriters may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. (g) The Company will make generally available to its security holders and to the Underwriters as soon as practicable, but not later than 90 days after the close of the period covered thereby, an earnings statement (which need not be audited) of the Company and its subsidiaries, covering an applicable period beginning not later than the first day of the Company's fiscal quarter next following the "Effective Date" (as defined in Rule 158(c) under the Act) of the Registration Statement, which will satisfy the provisions of Section 11(a) of the 1933 Act. (h) Until the business day following the Closing Time, the Company will not, without the consent of the Underwriters, offer, sell or contract to sell, or announce the offering of, any debt securities covered by the Registration Statement or any other registration statement filed under the 1933 Act. (i) The Company will make application for listing of the Notes on the Luxembourg Stock Exchange and will endeavor to meet all other requirements of the Luxembourg Stock Exchange necessary to effect such listing. Section 4. Payment of Expenses. The Company will pay all expenses ------------------- incident to the performance of its obligations under this Agreement, including: (i) the printing and filing of the Registration Statement, with the Commission and with the Luxembourg Stock Exchange, as originally filed and of each amendment thereto, (ii) the preparation, issuance and delivery of the certificates for the Notes, (iii) the fees and disbursements of the Company's counsel and accountants, (iv) the qualification of the Notes under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the fees and disbursements of Simpson Thacher & Bartlett, counsel for the Underwriters, in connection therewith and in connection with the preparation of any blue sky survey, (v) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and of each amendment thereto, of each preliminary prospectus, and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of the National Association of Securities Dealers, Inc., if applicable, (viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture; (ix) any fees payable in connection with the rating of 8 the Notes; (x) the cost and charges of any transfer agent or registrar and (xi) the cost of qualifying the Notes with DTC. If this Agreement is terminated by the Underwriters in accordance with the provisions of Section 5 or Section 8 hereof, the Company shall reimburse the Underwriters for all of its reasonable out-of-pocket expenses, including the reasonable fees and disbursements of Simpson Thacher & Bartlett, counsel for the Underwriters. Section 5. Conditions of Underwriters' Obligations. The --------------------------------------- obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company herein contained or in certificates of officers of the Company, to the performance by the Company of their obligations hereunder, and to the following further conditions: (a) At Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the 1933 Regulations and in accordance with Section 3(b) and prior to Closing Time the Company shall have provided evidence satisfactory to the Underwriters of such timely filing. (b) At Closing Time the Underwriters shall have received: (1) The favorable opinion, dated as of the Closing Time, of either Kenneth W. McAllister, General Counsel of the Company, or William M. Watson, Jr., Senior Vice President, Counsel and Secretary of the Company, in form and substance satisfactory to counsel for the Underwriters, to the effect that: (i) The Company is a duly organized and validly existing corporation in good standing under the laws of the State of North Carolina, has the corporate power and authority to own its properties, conduct its business as described in the Prospectus and perform its obligations under this Agreement, and is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. (ii) The Company is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (iii) The Company had at the date indicated a duly authorized and outstanding capitalization as set forth in the Prospectus and all of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. 9 (iv) Wachovia Bank is a national banking association duly organized and validly existing under the laws of the United States, continues to hold a valid certificate to do business as such and has full power and authority to conduct its business as such. (v) Wachovia Bank has the authority under the laws of the United States to own, lease and operate its properties and to conduct its business and is duly authorized to transact business and is in good standing in each jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or to be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise; and all of the outstanding shares of capital stock of Wachovia Bank have been duly authorized and validly issued and are fully paid and non-assessable (except as otherwise provided in 12 U.S.C. Section 55), and all of such shares are owned of record and, to the best knowledge of such counsel, beneficially by the Company, directly or through one or more subsidiaries, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind known to such counsel, and none of such shares was issued in violation of the preemptive rights of any stockholder of Wachovia Bank. (vi) To the best knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company or Wachovia Bank, of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Prospectus, and there is no franchise, contract, or other document of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit, which is not described or filed as required. (vii) The Registration Statement has become effective under the 1933 Act; to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened; the Registration Statement, the Prospectus and each amendment thereof or supplement thereto (other than the financial statements and other financial and statistical information contained therein or incorporated by reference therein, as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations. (viii) The Underwriting Agreement and the Indenture have been duly authorized, executed and delivered by the Company, and the Indenture constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, and has been duly qualified under the 1939 Act. (ix) The Notes have been duly authorized for issuance by the Company; and the Notes, when executed, authenticated and delivered in the manner provided for in the Indenture and paid for in accordance with this Agreement, will constitute valid and binding 10 obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms. (x) The Notes conform in all material respects to the description thereof contained in the Prospectus. (xi) No consent, approval, authorization or order of any court or governmental agency or body is required for the consummation by the Company of the transactions contemplated herein, except as such have been obtained under the 1933 Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Notes by the Underwriters and such other approvals (specified in such opinion) as have been obtained. (xii) The descriptions in the Prospectus of the statutes, regulations, legal or governmental proceedings, contracts and other documents therein described are accurate and fairly discuss in all material respects the information required to be shown. (xiii) To the best knowledge of such counsel, no default exists in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Prospectus. (xiv) The statements in the Prospectus under the caption "Description of Securities" and "Description of Notes", to the extent that such statements constitute matters of law or legal conclusions, have been reviewed by such counsel, or attorneys in such counsel's office working under such counsel's direction, and are accurate and fairly present the information disclosed therein in all material respects. (xv) The execution and delivery of each of this Agreement and the Indenture by the Company, the issuance and delivery of the Notes and the consummation by the Company of the transactions contemplated in this Agreement and in the Prospectus and compliance by the Company with the terms of each of this Agreement, the Indenture and the Notes do not and will not result in any violation of the charter or by-laws of the Company or Wachovia Bank, and do not and will not conflict with, or result in a breach of, any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or Wachovia Bank under (A) any indenture, mortgage or loan agreement, or any other agreement or instrument known to such counsel, to which the Company or Wachovia Bank is a party or by which it may be bound or to which any of its properties may be subject, (B) any existing applicable law, rule or regulation (other than the securities or blue sky laws of the various states, as to which such counsel need express no opinion), or (C) any judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or Wachovia Bank or any of its properties. 11 (xvi) The documents incorporated by reference in the Prospectus (except for the financial statements and other financial or statistical data included therein or omitted therefrom, as to which such counsel need express no opinion, and except to the extent that any statement therein is modified or superseded in the Prospectus), as of the dates they were filed with the Commission and as of the date of this Agreement, appear on their face to have been appropriately responsive in all material respects to the requirements of the 1934 Act and the rules and regulations promulgated thereunder. (xvii) Nothing has come to such counsel's attention which would lead such counsel to believe (A) that the Registration Statement (except for the financial statements and related schedules included therein or omitted therefrom, as to which such counsel need express no opinion), on the original effective date of the Registration Statement or on the date of the Underwriting Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or (B) that the Prospectus (except for the financial statements and related schedules included therein or omitted therefrom, as to which such counsel need express no opinion), at the time the Prospectus was issued or as of the Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or (C) that the documents incorporated by reference in the Prospectus (except for the financial statements and related schedules included therein or omitted therefrom, as to which such counsel need express no opinion, and except to the extent that any statement therein is modified or superseded in the Prospectus), as of the dates they were filed with the Commission, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (xviii) The Company is not, and upon the issuance and sale of the Notes as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus, will not be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the 1940 Act. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of North Carolina or the United States, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable and who are satisfactory to counsel for the Underwriters; and (B) as to matters of fact, to the extent deemed proper, on the representations and warranties of the Company contained herein, the Indenture or on certificates of responsible officers of the Company and its subsidiaries and public officials. (2) The favorable opinion, dated as of Closing Time, of Simpson Thacher & Bartlett, counsel for the Underwriters, in form and substance satisfactory to the Underwriters with respect to the legal existence of the Company, the Indenture, this Agreement, the Registration Statement, the Prospectus and other related matters as the Underwriters may require. 12 In giving its opinion, Simpson Thacher & Bartlett may rely as to certain matters of North Carolina law upon the opinion of either Kenneth W. McAllister, General Counsel of the Company, or William M. Watson, Jr., Senior Vice President, Counsel and Secretary of the Company, which shall be delivered in accordance with Section 5(b)(1) hereto. (3) At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement and the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, and the Underwriters shall have received a certificate of a Senior Vice President of the Company and of the chief financial or chief accounting officer of the Company, and dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the Commission. (4) At the Closing Time, Ernst & Young LLP shall have furnished to the Underwriters a letter or letters (which may refer to letters previously delivered to the Underwriters), dated as of the Closing Time, in form and substance satisfactory to the Underwriters, confirming that the response, if any, to Item 10 of the Registration Statement is correct insofar as it relates to them and stating in effect that: (i) They are independent accountants within the meaning of the 1933 Act and the 1934 Act and the 1933 Act Regulations and the 1934 Act Regulations. (ii) In their opinion, the consolidated financial statements of the Company and its subsidiaries audited by them and included or incorporated by reference in the Registration Statement and Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations with respect to registration statements on Form S-3 and the 1934 Act and the 1934 Act Regulations. (iii) On the basis of procedures (but not an audit in accordance with generally accepted auditing standards) consisting of: (A) Reading the minutes of the meetings of the shareholders, the board of directors, executive committee and audit committee of the Company and the boards of directors and executive committees of its subsidiaries as set forth in the minute books through a specified date not more than five business days prior to the date of delivery of such letter; (B) Performing the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in SAS No. 71, Interim Financial Information, on the unaudited condensed consolidated interim financial statements of the Company and its consolidated subsidiaries included or incorporated by 13 reference in the Registration Statement and Prospectus and reading the unaudited interim financial data, if any, for the period from the date of the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus to the date of the latest available interim financial data; and (C) Making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding the specific items for which representations are requested below; nothing has come to their attention as a result of the foregoing procedures that caused them to believe that: (1) the unaudited condensed consolidated interim financial statements, included or incorporated by reference in the Registration Statement and Prospectus, do not comply as to form in all material respects with the applicable accounting requirements of the 1934 Act and the 1934 Act Regulations thereunder; (2) any material modifications should be made to the unaudited condensed consolidated interim financial statements, included or incorporated by reference in the Registration Statement and Prospectus, for them to be in conformity with generally accepted accounting principles; (3) with respect to the period subsequent to the date of the most recent financial statements (other than any capsule information), audited or unaudited, in or incorporated in the Registration Statement and the Prospectus, there were any changes, at a specified date not more than 3 business days prior to the date of the letter, in the long-term debt (including capital lease obligations) of the Company and its subsidiaries or capital stock of the Company (other than issuances of capital stock upon exercise of options and stock appreciation plans which were outstanding on the date of the latest consolidated balance sheet included or incorporated in the Registration Statement and the Prospectus) or decreases in the shareholders' equity of the Company as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated in the Registration Statement and the Prospectus, or for the period from the date of the most recent financial statements included or incorporated in the Registration Statement and the Prospectus to such specified date there were any decreases, as compared with the corresponding period in the preceding year, in net interest income, net interest income after provision for loan losses or in income before income taxes, or in the total or per-share amount of net income of the Company and its subsidiaries, except in all instances for changes or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed necessary by the Underwriters. (iv) The letter shall also state that Ernst & Young LLP has carried out certain other specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included or incorporated by reference in 14 the Registration Statement and Prospectus and which are specified by the Underwriters and agreed to by Ernst & Young LLP, and has found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Company and its subsidiaries identified in such letter. In addition, at the time this Agreement is executed, Ernst & Young LLP shall have furnished to the Underwriters a letter or letters, dated the date of this Agreement, in form and substance satisfactory to the Underwriters, to the effect set forth in this subsection 4. (5) At Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Notes as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company, in connection with the issuance and sale of the Notes as herein contemplated shall be satisfactory in form and substance to the Underwriters and Simpson Thacher & Bartlett, counsel for the Underwriters. (6) At Closing Time, the Notes are rated A+ by Standard & Poor's Rating Services and A1 by Moody's Investor Service and there shall not have occurred any decrease in the ratings of any of the securities of the Company or the Notes by any nationally recognized statistical rating organization, and no such organization shall have publicly announced that it has under surveillance or review its rating of any of the Company's securities or any of the Notes. (c) At or before Closing Time the Notes shall have been accepted for listing on the Luxembourg Stock Exchange and the Company shall have provided evidence satisfactory to the Underwriters of such listing. (d) At Closing Time there shall not have been a change in national or international financial, political or economic conditions or currency exchange rates or exchange controls as would in the view of the Underwriters be likely to prejudice materially the success of the offering and distribution of the Notes or dealings in the Notes in the secondary market. If any condition specified in this Section shall not have been fulfilled in all material respects when and as required to be fulfilled, this Agreement may be terminated by the Underwriters by notice to the Company, in writing or by telephone or telegraph confirmed in writing, at any time at or prior to Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and except that Sections 1, 7, and 8 shall survive any such termination and will remain in full force and effect. Section 6. Indemnification and Contribution. -------------------------------- (a) The Company agrees to indemnify and hold harmless each Underwriter and each of its partners, officers, directors, and employees and each person, if any, who controls any Underwriter within the meaning of the 1933 Act or the 1934 Act against any losses, claims, damages or liabilities, and any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of the Notes), which arises out 15 of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, or any amendment or supplement thereto, (B) the Prospectus and any amendment or supplement thereto, or (C) any application or other document, or any amendment or supplement thereto, executed by the Company or based upon information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify the Notes under the securities or blue sky laws thereof (each, an "Application") or (ii) the omission or alleged omission to state in the Registration Statement, or any amendment or supplement thereto, the Prospectus or any amendment or supplement thereto, or any Application, a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse as incurred each Underwriter and each such controlling person for any legal and other expenses incurred in investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to any Underwriter in any such case to the extent that any such loss, claim, damage or liability arises out of, or is based upon, any untrue statement or alleged untrue statement made in the Prospectus, including any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of such Underwriter specifically for inclusion and actually included therein; and provided further that, as to any Prospectus that has been amended or supplemented as provided herein, this indemnity agreement shall not inure to the benefit of any Underwriter on account of any loss, claim, damage, liability or action arising out of the sale of Notes to any person by such Underwriter if (A) such Underwriter failed to send or give a copy of the final Prospectus as so amended or supplemented to that person at or prior to the confirmation of the sale of such Notes to such person in any case where such delivery is required by the 1933 Act, and (B) the untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in any preliminary Prospectus was corrected in an amendment or supplement thereto (but only if the sale to such person occurred after the Company provided such Underwriter and the Underwriter received copies of such amendment or supplement for distribution). This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Company and each of the Company's directors, each of its officers and each person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by such Underwriter and specifically included in the Prospectus. This indemnity shall be in addition to any liability which such Underwriter may otherwise have. The Company acknowledges that the statements set forth under the heading "Underwriting" in the Prospectus Supplement constitute the only information furnished in writing by the several Underwriters for inclusion in the Prospectus. (c) Promptly after receipt by an indemnified party under this Section 6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against one or more indemnifying parties under this Section 6, notify such indemnifying party or parties of the commencement thereof; but the omission so to notify the indemnifying party or parties will not relieve it or them from any liability which it or they may 16 have to any indemnified party otherwise than under subsection (a) or (b) of this Section 6 or to the extent that the indemnifying party was not adversely affected by such omission. In case any such action is brought against an indemnified party and it notifies an indemnifying party or parties of the commencement thereof, the indemnifying party or parties against which a claim is to be made will be entitled to participate therein and, to the extent that it or they may wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be one or more legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 6 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Underwriters in the case of paragraph (a) of this Section 6, representing the indemnified parties under such paragraph (a) who are parties to such action or actions), or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the consent of the indemnifying party, which will not be unreasonably withheld, unless such indemnified party waived its rights under this Section 6 in writing in which case the indemnified party may effect such a settlement without such consent. (d) If the indemnification provided for in the preceding paragraphs of this Section 6 is unavailable or insufficient to hold harmless an indemnified party under paragraph (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then the Company or the Underwriters shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) to which the Company and the Underwriters may be subject in such proportion so that the Underwriters are responsible for that portion represented by the percentage that the total discounts and/or commissions received by the Underwriters bears to the sum of such discounts and/or commissions and the purchase price of the Notes specified on the cover page of the Prospectus and the Company is responsible for the balance; provided, however, that (y) in no case shall any Underwriter be responsible for any amount in excess of the total discounts and/or commissions received by it with respect to the Notes purchased by such Underwriter under this Agreement and (z) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be 17 entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6, each person who controls an Underwriter within the meaning of the 1933 Act shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the 1933 Act or the 1934 Exchange Act, each officer of the Company and each director of the Company shall have the same rights to contribution as the Company, subject in each case to clause (y) of this paragraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this paragraph (d), notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this paragraph (d). Section 7. Representations, Warranties and Agreements to Survive ----------------------------------------------------- Delivery. All representations, warranties and agreements contained in this - -------- Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company and shall survive delivery of the Notes to the Underwriters. Section 8. Termination of Agreement. ------------------------ (a) The Underwriters may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Underwriters, impracticable to market the Notes or to enforce contracts for the sale of the Notes, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the applicable exchange, or if trading generally on the New York Stock Exchange, the American Stock Exchange or on the NASDAQ National Market has been suspended, limited or restricted or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by said exchanges or such system or by order of the Commission, the NASD or any governmental authority, or (iv) if a banking moratorium has been declared by either Federal, New York or North Carolina authorities, or (v) if there has been any decrease in the ratings of any of the securities of the Company or of the Notes by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or if any such organization shall have publicly announced that it has under surveillance or review its rating of any of the Company's securities or any of the Notes. 18 (b) If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and except that Sections 1, 6, and 7 shall survive any such termination and will remain in full force and effect. Section 9. Default by One or More of the Underwriters. If one or ------------------------------------------ more of the Underwriters shall fail at Closing Time to purchase the Notes that it or they are obligated to purchase under this Agreement (the "Defaulted Notes"), the lead Underwriter shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the lead Underwriter shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Notes does not exceed 10% of the Notes, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the number of Defaulted Notes exceeds 10% of the Notes, this Agreement shall terminate without liability on the part of any non-defaulting Underwriters. No action taken pursuant to this Section shall relieve any defaulting Underwriters from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the lead Underwriter shall have the right to postpone Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. Section 10. Notices. All notices and other communications hereunder ------- shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, World Financial Center, New York, New York 10281- 1209, attention of Syndicate Department; notices to the Company shall be directed to it at Wachovia Corporation, 100 North Main Street, Winston-Salem, North Carolina 27101, attention of William M. Watson, Jr., Esq. Section 11. Parties. This Agreement shall inure to the benefit of ------- and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers, directors and trustees referred to in Section 6 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company 19 and their respective successors, and said controlling persons and officers, directors and trustees and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor by reason merely of such purchase. Section 12. Governing Law and Time. This Agreement shall be ---------------------- governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Except as otherwise set forth herein, specified times of day refer to New York City time. Section 13. Counterparts. This Agreement may be executed by any one ------------ or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 20 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters and the Company in accordance with its terms. Very truly yours, WACHOVIA CORPORATION By:_______________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By:______________________________________________ Authorized Signatory For itself and the other Underwriters named in Schedule A hereto. SCHEDULE A Principal Name of Underwriter Amount - -------------------- ------ Merrill Lynch, Pierce, Fenner & Smith Incorporated ......................... $ .................................................. .................................................. .................................................. .................................................. .................................................. Total .................................... $ EX-4.(B) 3 INDENTURE DATED JULY 15, 1998 EXHIBIT 4(b) ================================================================================ WACHOVIA CORPORATION TO THE CHASE MANHATTAN BANK, Trustee -------------- INDENTURE Dated as of July 15, 1998 -------------- Providing for the issuance of subordinated debt securities in series ================================================================================ TABLE OF CONTENTS Page ---- Parties................................................................. 1 Recitals of the Company................................................. 1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...... 1 Section 101. Definitions.............................................. 1 Act...................................................... 1 Additional Senior Obligations............................ 2 Affiliate................................................ 2 control.................................................. 2 Authenticating Agent..................................... 2 Board of Directors....................................... 2 Board Resolution......................................... 2 Book-Entry Security...................................... 2 Business Day............................................. 2 Commission............................................... 2 Company.................................................. 2 Company Request or Company Order......................... 3 Corporate Trust Office................................... 3 corporation.............................................. 3 Defaulted Interest....................................... 3 Depositary............................................... 3 Event of Default......................................... 3 Holder................................................... 3 Indenture................................................ 3 1989 Indenture........................................... 3 1993 Indenture........................................... 3 interest................................................. 3 Interest Payment Date.................................... 3 Maturity................................................. 3 Officers' Certificate.................................... 4 Opinion of Counsel....................................... 4 Original Issue Discount Security......................... 4 Outstanding.............................................. 4 Paying Agent............................................. 5 Person................................................... 5 Place of Payment......................................... 5 - ----------------- NOTE: This table of contents shall not, for any purposes, be deemed to be a part of the Indenture. -i- Page ---- Predecessor Security..................................... 5 Primary Federal Regulator................................ 5 Ranking Junior to the Securities......................... 5 Ranking on a Parity with the Securities.................. 5 Redemption Date.......................................... 5 Redemption Price......................................... 5 Regular Record Date...................................... 6 Responsible Officer...................................... 6 Securities............................................... 6 Security Register", "Security Registrar" and "Co-Security Registrar.............................. 6 Senior Indebtedness...................................... 6 Special Record Date...................................... 6 Stated Maturity.......................................... 6 Subsidiary............................................... 6 Trustee.................................................. 6 Trust Indenture Act...................................... 7 Vice President........................................... 7 Voting Stock............................................. 7 Section 102. Compliance Certificates and Opinions..................... 7 Section 103. Form of Documents Delivered to Trustee................... 7 Section 104. Acts of Holders.......................................... 8 Section 105. Notices, Etc., to Trustee and Company.................... 8 Section 106. Notice to Holders; Waiver................................ 9 Section 107. Conflict With Trust Indenture Act........................ 9 Section 108. Effect of Headings and Table of Contents................. 9 Section 109. Successors and Assigns................................... 9 Section 110. Separability Clause...................................... 9 Section 111. Benefits of Indenture.................................... 10 Section 112. Governing Law............................................ 10 Section 113. Legal Holidays........................................... 10 ARTICLE TWO SECURITY FORMS........................... 10 Section 201. Forms Generally.......................................... 10 Section 202. Form of Face of Security................................. 11 Section 203. Form of Reverse of Security.............................. 14 Section 204. Form of Trustee's Certificate of Authentication.......... 17 Section 205. Issuance of Book-Entry Securities........................ 17 ARTICLE THREE THE SECURITIES........................... 18 Section 301. Amount Unlimited; Issuable in Series..................... 18 Section 302. Denominations............................................ 19 Section 303. Execution, Authentication, Delivery and Dating........... 20 -ii- Page ---- Section 304. Temporary Securities..................................... 21 Section 305. Registration, Registration of Transfer and Exchange...... 21 Section 306. Mutilated, Destroyed, Lost and Stolen Securities......... 23 Section 307. Payment of Interest; Interest Rights Preserved........... 24 Section 308. Persons Deemed Owners.................................... 25 Section 309. Cancellation............................................. 25 Section 310. Computation of Interest.................................. 25 Section 311. Regarding Beneficial Ownership Interests in Book-Entry Securities................................... 25 ARTICLE FOUR SATISFACTION AND DISCHARGE..................... 26 Section 401. Satisfaction and Discharge of Indenture.................. 26 Section 402. Application of Trust Money............................... 27 ARTICLE FIVE REMEDIES.............................. 27 Section 501. Events of Default........................................ 27 Section 502. Acceleration of Maturity; Rescission and Annulment....... 28 Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee................................................. 29 Section 504. Trustee May File Proofs of Claim......................... 29 Section 505. Trustee May Enforce Claims Without Possession of Securities.............................................. 30 Section 506. Application of Money Collected........................... 30 Section 507. Limitation on Suits...................................... 30 Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.................................... 31 Section 509. Restoration of Rights and Remedies....................... 31 Section 510. Rights and Remedies Cumulative........................... 31 Section 511. Delay or Omission Not Waiver............................. 32 Section 512. Control by Holders....................................... 32 Section 513. Waiver of Past Defaults.................................. 32 Section 514. Undertaking for Costs.................................... 32 Section 515. Waiver of Stay or Extension Laws......................... 33 ARTICLE SIX THE TRUSTEE............................. 33 Section 601. Certain Duties and Responsibilities...................... 33 Section 602. Notice of Defaults....................................... 34 Section 604. Not Responsible for Recitals or Issuance of Securities.............................................. 35 Section 605. May Hold Securities...................................... 35 -iii- Page ---- Section 606. Money Held in Trust...................................... 35 Section 607. Compensation and Reimbursement........................... 36 Section 608. Disqualification; Conflicting Interests.................. 36 Section 609. Corporate Trustee Required; Eligibility.................. 36 Section 610. Resignation and Removal; Appointment of Successor........ 37 Section 611. Acceptance of Appointment by Successor................... 38 Section 612. Merger, Conversion, Consolidation or Succession to Business................................................ 39 Section 613. Preferential Collection of Claims Against Company........ 39 Section 614. Appointment of Authenticating Agent...................... 39 ARTICLE SEVEN LISTS OF HOLDERS AND REPORTS BY TRUSTEE AND COMPANY......... 41 Section 701. Company to Furnish Trustee Names and Addresses of Holders................................................. 41 Section 702. Preservation of Information; Communications to Holders... 41 Section 703. Reports by Trustee....................................... 42 Section 704. Reports by Company....................................... 42 ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE........ 42 Section 801. Company May Consolidate, Etc. Only on Certain Terms...... 42 Section 802. Successor Corporation Substituted........................ 43 Section 803. Assumption by Subsidiary of Company's Obligations........ 43 ARTICLE NINE SUPPLEMENTAL INDENTURES...................... 44 Section 901. Supplemental Indentures Without Consent of Holders....... 44 Section 902. Supplemental Indentures With Consent of Holders.......... 46 Section 903. Execution of Supplemental Indentures..................... 47 Section 904. Effect of Supplemental Indentures........................ 47 Section 905. Conformity With Trust Indenture Act...................... 47 Section 906. Reference in Securities to Supplemental Indentures....... 47 ARTICLE TEN COVENANTS.............................. 47 Section 1001. Payment of Principal, Premium and Interest............... 47 Section 1002. Maintenance of Office or Agency.......................... 47 Section 1003. Money for Securities Payments to be Held in Trust........ 48 Section 1004. Corporate Existence...................................... 49 -iv- Section 1005. Statement as to Compliance............................... 49 Section 1006. Waiver of Certain Covenants.............................. 50 ARTICLE ELEVEN REDEMPTION OF SECURITIES...................... 50 Section 1101. Applicability of Article................................. 50 Section 1102. Election to Redeem; Notice to Trustee.................... 50 Section 1103. Selection by Trustee of Securities to be Redeemed........ 50 Section 1104. Notice of Redemption..................................... 51 Section 1105. Deposit of Redemption Price.............................. 51 Section 1106. Securities Payable on Redemption Date.................... 51 Section 1107. Securities Redeemed in Part.............................. 52 ARTICLE TWELVE SINKING FUNDS............................ 52 Section 1201. Applicability of Article................................. 52 Section 1202. Satisfaction of Sinking Fund Payments With Securities.... 52 Section 1203. Redemption of Securities for Sinking Fund................ 53 ARTICLE THIRTEEN SUBORDINATION OF SECURITIES..................... 53 Section 1301. Agreement to Subordinate................................. 53 Section 1302. Obligation of the Company Unconditional.................. 55 Section 1303. Notice to Trustee of Facts Prohibiting Payment........... 55 Section 1304. Application by Trustee of Moneys Deposited With It....... 56 Section 1305. Subrogation to Rights of Holders of Senior Indebtedness and Additional Senior Obligations.......... 56 Section 1306. Subordination Rights Not Impaired by Acts or Omissions of Company, Holders of Senior Indebtedness or Holders of Additional Senior Obligations........................... 56 Section 1307. Authorization of Trustee to Effectuate Subordination of Securities.............................................. 56 Section 1308. Right of Trustee to Hold Senior Indebtedness and Additional Senior Obligations...................................... 57 Section 1309. Article Thirteen Not to Prevent Events of Default........ 57 Section 1310. Article Applicable to Paying Agents...................... 57 Section 1311. Reliance on Judicial Order or Certificate of Liquidating Agent................................................... 57 Section 1312. Trustee Not Fiduciary for Holders of Senior Indebtedness or Holders of Additional Senior Obligations................ 57 Section 1313. Payment Permitted If No Default.......................... 58 -v- Page ---- Section 1314. Regarding Securities Issued Under the 1989 Indenture or the 1993 Indenture.......................................... 58 ARTICLE FOURTEEN HOLDERS' MEETINGS.......................... 58 Section 1401. Purposes for Which Meetings May be Called................ 58 Section 1402. Manner of Calling Meetings............................... 59 Section 1403. Call of Meetings by Company or Holders................... 59 Section 1404. Who May Attend and Vote at Meetings...................... 59 Section 1405. Regulations May be Made by Trustee....................... 59 Section 1406. Evidence of Actions by Holders........................... 59 Section 1407. Exercise of Rights of Trustee and Holders Not to be Hindered or Delayed..................................... 60 -vi- INDENTURE, dated as of July 15, 1998, between WACHOVIA CORPORATION, a corporation duly organized and existing under the laws of the State of North Carolina (herein called the "Company"), having its principal office at 100 North Main Street, Winston-Salem, North Carolina 27101, and The Chase Manhattan Bank, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured subordinated debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions. ----------- For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and (4) the words "herein", "hereof", and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 104. 2 "Additional Senior Obligations" means all indebtedness of the Company for claims in respect of derivative products such as interest and foreign exchange rate contracts, commodity contracts and similar arrangements, whether outstanding on the date of execution of this Indenture or thereafter created, assumed or incurred, provided, however, that Additional Senior Obligations shall not include claims in respect of Senior Indebtedness or any obligation (i) Ranking Junior to the Securities or (ii) Ranking on a Parity with the Securities. For purposes of this definition, "claim" shall have the meaning assigned thereto in Section 101(4) of the Bankruptcy Code of 1978, as amended and in effect on the date of execution of this Indenture. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities. "Board of Directors" means either the board of directors of the Company, any duly authorized committee of that board or any officer of the Company duly authorized by the board of directors of the Company or a duly authorized committee of that board to take a specified action or make a specified determination (the authorization of such offices being evidenced by a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the board of directors of the Company or a duly authorized committee of that board and to be in full force and effect on the date of such certification and delivered to the Trustee). "Board Resolution" means a copy of the resolution or action certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted or taken by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Book-Entry Security" means a Security in the form prescribed in Section 205 evidencing all or part of a series of Securities, issued to the Depositary for such series or its nominee, and registered in the name of such Depositary or its nominee. "Business Day", when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are generally authorized or obligated by law to close. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, "Company" shall mean such successor corporation. 3 "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President, a Vice Chairman or a Vice President, and by its Treasurer, an Assistant Treasurer, its Comptroller, an Assistant Comptroller, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 450 West 33rd Street, Fifteenth Floor, New York, New York 10001-2697, Attention: Global Trust Services; except, that, with respect to presentation of Securities for registration of transfer and exchange, and the location of the Securities Register, such term means the office or agency of the Security Registrar in said Borough, at which at any particular time its corporate agency business shall be conducted. "corporation" includes corporations, associations, companies and business trusts. "Defaulted Interest" has the meaning specified in Section 307. "Depositary" means, with respect to the Securities of any series issuable or issued in the form of a Book-Entry Security, the Person designated as Depositary by the Company pursuant to Section 301 until a successor Depositary shall have been appointed pursuant to Section 305, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Securities of that series. "Event of Default" has the meaning specified in Section 501. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 301. "1989 Indenture" means the Indenture dated as of August 22, 1989, as supplemented and amended by the First Supplemental Indenture dated as of September 15, 1989. "1993 Indenture" means the Indenture dated as of March 1, 1993. "interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an instalment of interest on such Security. "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an instalment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. 4 "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President, a Vice Chairman or a Vice President, and by the Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary of the Company, or a Subsidiary, as the case may be, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be an employee of or counsel for the Company, or who may be other counsel satisfactory to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided, that if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 502; (ii) the principal amount of a Security denominated in a foreign currency or currencies shall be the U.S. dollar equivalent, determined on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security; and (iii) Securities owned by or held for the account of the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned or so held which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an 5 Officers' Certificate listing and identifying all Securities, if any, known by the Company to be owned by or held for the account of the Company or any other obligor upon the Securities, or any Affiliate of the Company or of such obligor and the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein and not otherwise excluded from the provisions hereof are Outstanding for the purposes of any such determination. "Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment", when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest on the Securities of that series are payable as specified as contemplated by Section 301. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Primary Federal Regulator" means the Company's primary federal banking regulator (which at the date of this Indenture is the Board of Governors of the Federal Reserve System), or any successor body or institution performing substantially the same regulatory function with respect to the Company and to the adequacy of its capital as said Board of Governors performs on the date hereof. "Ranking Junior to the Securities", when used with respect to any obligation of the Company, means any obligation of the Company which (a) ranks junior to and not equally with or prior to the Securities in right of payment upon the happening of any event of the kind specified in the first sentence of the first paragraph of Section 1301, and (b) is specifically designated as ranking junior to the Securities by express provisions in the instrument creating or evidencing such obligation. "Ranking on a Parity with the Securities", when used with respect to any obligation of the Company, means any obligation of the Company which (a) ranks equally with and not prior to the Securities in right of payment upon the happening of any event of the kind specified in the first sentence of the first paragraph of Section 1301, and (b) is specifically designated as ranking on a parity with the Securities by express provision in the instrument creating or evidencing such obligation. The securing of any obligations of the Company, otherwise Ranking on a Parity with the Securities or Ranking Junior to the Securities, is not deemed to prevent such obligations from constituting obligations Ranking on a Parity with the Securities or Ranking Junior to the Securities. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. 6 "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "Responsible Officer", when used with respect to the Trustee, means the chairman of the trust committee, any vice president, secretary, assistant secretary, managing director, treasurer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to any particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Register", "Security Registrar" and "Co-Security Registrar" have the respective meanings specified in Section 305. "Senior Indebtedness" means (a) all indebtedness of the Company for money borrowed, whether outstanding on the date of execution of this Indenture or thereafter created, assumed or incurred except (i) the Securities, (ii) the Company's 7% Subordinated Notes due 1999, issued and outstanding under the 1989 Indenture, (iii) the Company's 6 3/8% Subordinated Notes due 2003, 6 3/8% Subordinated Notes due 2009, 6.80% Subordinated Notes due 2005 and 6.605% Subordinated Notes due October 1, 2025, issued and outstanding under the 1993 Indenture, (iv) any obligation Ranking on a Parity with the Securities, or (v) any obligation Ranking Junior to the Securities and (b) any deferrals, renewals or extensions of any such Senior Indebtedness. As used in the preceding sentence, the term "indebtedness of the Company for money borrowed" shall mean any obligation of, or any obligation guaranteed by, the Company for the repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, and any deferred obligation for the payment of the purchase price of property or assets acquired other than in the ordinary course of business. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any instalment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of principal or interest is due and payable. "Subsidiary" means a corporation, state banking corporation or national banking association more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. "Trustee" means the Person named as "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939, as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 7 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". "Voting Stock", means stock of the class or classes having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of the subject corporation, state banking corporation or national banking association (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). Section 102. Compliance Certificates and Opinions. ------------------------------------ Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 103. Form of Documents Delivered to Trustee. -------------------------------------- In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. 8 Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless each counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 104. Acts of Holders. --------------- (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. Section 105. Notices, Etc., to Trustee and Company. ------------------------------------- Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, 9 (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to the attention of its General Counsel at 100 North Main Street, Winston-Salem, North Carolina 27101 or at any other address previously furnished in writing to the Trustee by the Company. Section 106. Notice to Holders; Waiver. ------------------------- Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. Section 107. Conflict With Trust Indenture Act. --------------------------------- If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Section 108. Effect of Headings and Table of Contents. ---------------------------------------- The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. Successors and Assigns. ---------------------- All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. 10 Section 110. Separability Clause. ------------------- In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 111. Benefits of Indenture. --------------------- Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the holders of Senior Indebtedness and Additional Senior Obligations and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. Governing Law. ------------- This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. Section 113. Legal Holidays. -------------- In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. ARTICLE TWO SECURITY FORMS Section 201. Forms Generally. --------------- The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. The Trustee's certificates of authentication shall be in substantially the form set forth in this Article. 11 The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. Section 202. Form of Face of Security. ------------------------ THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY. [If the Security is an Original Issue Discount Security, insert -- FOR PURPOSES OF SECTION 1273 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS SECURITY IS % OF ITS PRINCIPAL AMOUNT AND THE ISSUE DATE IS ____________, 19__.] 12 WACHOVIA CORPORATION ___________ Subordinated _____________ due __________________ No. _______________ $___________ WACHOVIA CORPORATION, a North Carolina corporation (hereinafter called the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ______________, or registered assigns, the principal sum of ___________________ Dollars on _________________ [If the Security is to bear interest prior to Maturity, insert--, and to pay interest thereon from _____________, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ______________ and ____________ in each year, commencing ________________, at the rate of _____% per annum, [If applicable, insert method of calculation of floating rate,] until the principal hereof is paid or made available for payment [If applicable, insert--, and (to the extent that the payment of such interest shall be legally enforceable) at the rate of ____% per annum on any overdue principal and premium and on any overdue instalment of interest]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the ___________ or ____________ (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture]. [If the Security is not to bear interest prior to Maturity, insert-- The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Security shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.] Payment of the principal of (and premium, if any) and [if applicable, insert-- any such] interest on this Security will be made at the offices or agencies of the Trustee maintained for that purpose in New York, New York [describe relevant currency] [if applicable, insert--; provided, however, that at the option of the Company payment of interest may be made by check drawn upon any Paying Agent and mailed on or prior to an Interest Payment Date to the address of the Person entitled thereto as such address shall appear in the Security Register.] 13 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an authenticating agent, by the manual signature of an authorized signer, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: WACHOVIA CORPORATION By ___________________________ [Seal] Attest: _________________________ 14 Section 203. Form of Reverse of Security. --------------------------- This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of July 15, 1998 (herein called the "Indenture") between the Company and The Chase Manhattan Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Indebtedness, the holders of Additional Senior Obligations and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof[, limited in aggregate principal amount to $________]. [If applicable, insert-- The Securities of this series are subject to redemption upon not less than 30 days notice by mail, [if applicable, insert-- (1) on _______________ in any year commencing with the year ____ and ending with the year ____ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after ___________, ____], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [on or before _________________, ____% and if redeemed] during the 12-month period beginning ______________ of the years indicated, Redemption Price Redemption Price ------- ------- Year Year and thereafter at a Redemption Price equal to ____% of the principal amount, together in the case of any such redemption [If applicable, insert-- (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business, on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [If applicable, insert-- The Securities of this series are subject to redemption upon not less than 30 days notice by mail, (1) on _____________ in any year commencing with the year ___________ and ending with the year __________ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after _____________], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning ____________ of the years indicated, 15 Redemption Price Redemption Price For Redemption Through For Redemption Otherwise Operation Than Through Operation Year of the Sinking Fund of the Sinking Fund - ------ ----------------------- ------------------------- and thereafter at a Redemption Price equal to ____% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the Company may not, prior to _________, redeem any Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ____% per annum.] [The sinking fund for this series provides for the redemption on ____________ in each year beginning with the year _____ and ending with the year ____ of [not less than] $_______ [("mandatory sinking fund") and not more than $_________] aggregate principal amount of Securities of this series. [Securities of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made.] In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of the Indenture or of this Security) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. The indebtedness evidenced by this Security is unsecured and, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness and, under certain circumstances, to Additional Senior Obligations, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions and (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided. 16 [If the Security is not an Original Issue Discount Security,-- If a Bankruptcy Event of Default (as defined in the Indenture) with respect to the Company shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] [If the Security is an Original Issue Discount Security,-- If a Bankruptcy Event of Default (as defined in the Indenture) with respect to the Company shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to -- insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.] The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 66 2/3% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $_________ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same. 17 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Indenture provides that a Subsidiary may assume the obligations of the Company under the Indenture and the Securities, subject to the satisfaction of certain conditions, including the Company's guaranteeing of the Subsidiary's obligations under this Security and the Indenture. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security shall be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. Section 204. Form of Trustee's Certificate of Authentication. ----------------------------------------------- This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. By ____________________________ [NAME OF TRUSTEE] as Trustee Section 205. Issuance of Book-Entry Securities. --------------------------------- Any Book-Entry Security authenticated and issued hereunder shall, in addition to the provisions contained in Section 202 and 203, bear a legend in substantially the following form, subject to modification by the Depositary: "This Security is a Book-Entry Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary. This Security is exchangeable for Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Indenture and may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary." Any Book-Entry Security issued hereunder may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and may also provide that the aggregate may from time to time be reduced to reflect exchanges or increased to reflect the issuance of additional uncertificated Securities of such series. Any endorsement of a Book- Entry Security to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee and in such manner as shall be specified in such 18 Security or the Company Order to be delivered to the Trustee pursuant to Section 303. Any instructions by the Company with respect to a Book-Entry Security, after its initial issuance, shall be in writing but need not comply with Section 102. Each Depositary designated pursuant to Section 301 for a Book-Entry Security must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation. Book-Entry Securities may be issued only in registered form and in either temporary or permanent form. ARTICLE THREE THE SECURITIES Section 301. Amount Unlimited; Issuable in Series. ------------------------------------ The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906, or 1107); (3) the date or dates on which the principal of the Securities of the series is payable; (4) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date; (5) the place or places, if any, in addition to New York, New York, where the principal of (and premium, if any) and interest on Securities of the series shall be payable; (6) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company; (7) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the 19 period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (8) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; (9) the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on the Securities of the series shall be payable if other than the currency of the United States of America; (10) if the amount or payments of principal of and any premium or interest on the Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined; (11) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; (12) the form of the Securities, and the extent, if any, to which any of the Securities will be issuable in Book-Entry form and, in such case, the Depositary for such Book-Entry Security or Securities, and the terms and conditions, if any, upon which such Book-Entry Security may be exchanged in whole or in part for definitive Securities, if other than as set forth in Section 305; and (13) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and set forth in such Officers' Certificate or in any such indenture supplemental hereto. At the option of the Company, interest on the Securities of any series that bears interest may be paid by mailing a check to the address of the person entitled thereto as such address shall appear in the Securities Register. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. The Securities shall be subordinated to Senior Indebtedness and, under certain circumstances, to Additional Senior Obligations as provided in Article Thirteen. Section 302. Denominations. ------------- The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by Section 301. In the absence of any such 20 provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof. Section 303. Execution, Authentication, Delivery and Dating. ---------------------------------------------- The Securities shall be executed on behalf of the Company by its President or one of its Executive Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order and subject to the provisions hereof shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating: (a) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; (b) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and (c) that all conditions precedent to the authentication and delivery of such Securities have been complied with and that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors rights and to general equity principles. If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Each Security shall be dated the date of its authentication. 21 No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. If the Company shall establish pursuant to Section 301 that the Securities of a series are to be issued in whole or in part in the form of one or more Book-Entry Securities, then the Company shall execute and the Trustee shall, in accordance with this Section and a Company Order for the authentication and delivery of such Book-Entry Securities with respect to such series, authenticate and deliver one or more Book-Entry Securities in permanent or temporary form that (i) shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of the Outstanding Securities of such series to be represented by one or more Book-Entry Securities, (ii) shall be registered in the name of the Depositary for such Book-Entry Security or Securities or the nominee of such Depositary and (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions. Section 304. Temporary Securities. -------------------- Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. Section 305. Registration, Registration of Transfer and Exchange. --------------------------------------------------- The Company shall cause to be kept at the office of the Security Registrar designated pursuant to this Section 305 or Section 1002 a register (being the combined register of the Security Registrar and any Co-Security Registrars and herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and for transfers of Securities. The Trustee is hereby initially appointed "Security Registrar" for the purpose of registering Securities as herein provided. Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee shall 22 authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of a like aggregate principal amount. At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Security Registrar or any Co-Security Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Security Registrar or such Co-Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. Neither the Company, the Security Registrar nor any Co-Security Registrar shall be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. If at any time the Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for the Securities of such series shall no longer be eligible under Section 205, the Company shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 301(13) shall no longer be effective with respect to the Securities of such series and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver Securities of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of the Book-Entry Security or Securities representing such series in exchange for such Book-Entry Security or Securities. The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Book-Entry Securities shall no longer be represented by such Book-Entry Security or Securities. In such event, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver Securities of such series of like tenor and terms in definitive form in an 23 aggregate principal amount equal to the principal amount of the Book-Entry Security or Securities representing such series in exchange for such Book-Entry Security or Securities. If specified by the Company pursuant to Section 301 with respect to a series of Securities, or if an Event of Default, or an event which with notice, lapse of time or both would be an Event of Default with respect to the Securities of such series has occurred and is continuing, a Person owning a beneficial interest in a Book-Entry Security for Securities of such series may instruct the Depositary for such series of Securities to surrender such Book- Entry Security for such series of Securities in exchange in whole or in part for Securities of such series of like tenor in definitive registered form. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge: (a) to the Person specified by such Depositary a new Security or Securities of the same series, of like tenor, of any authorized denomination as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Book- Entry Security; and (b) to such Depositary a new Book-Entry Security of like tenor in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Book-Entry Security and the aggregate principal amount of Securities delivered pursuant to clause (a) above. Upon the exchange of a Book-Entry Security for Securities in definitive form, such Book-Entry Security shall be cancelled by the Trustee. Securities issued in exchange for a Book-Entry Security pursuant to this Section shall be registered in such names and in such authorized denominations, and delivered to such addresses, as the Depositary for such Book-Entry Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee in writing. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered or to the Depositary. Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Book-Entry Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary. Section 306. Mutilated, Destroyed, Lost and Stolen Securities. ------------------------------------------------ If any mutilated Security is surrendered to the Trustee and there is delivered to the Company and the Trustee such security or indemnity as may be required by them to save each of them and any agent of either of them harmless then the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the 24 Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 307. Payment of Interest; Interest Rights Preserved. ---------------------------------------------- Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose name the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall not be more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed 25 payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date thereof to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to the Clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. Section 308. Persons Deemed Owners. --------------------- Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes, whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 309. Cancellation. ------------ All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order. Section 310. Computation of Interest. ----------------------- Except as otherwise contemplated by this Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year of twelve 30-day months. 26 Section 311 Regarding Beneficial Ownership Interests in Book-Entry ------------------------------------------------------ Securities. - ---------- Neither the Company, the Trustee, any Authenticating Agent, and Paying Agent nor the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Book-Entry Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. ARTICLE FOUR SATISFACTION AND DISCHARGE Section 401 Satisfaction and Discharge of Indenture. --------------------------------------- This Indenture shall upon Company Request cease to be of further effect (except as to (i) remaining rights of registration of transfer, substitution and exchange of Securities, (ii) rights hereunder of Holders to receive payments of principal of (and premium, if any) and interest on the Securities, and other rights, duties and obligations of the Holders as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee, and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company; and the Company, in the case of (i), (ii), or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. 27 In the event there are Securities of two or more series hereunder, the Trustee shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Securities of all series as to which it is Trustee and if the other conditions thereto are met. In the event there are two or more Trustees hereunder, then the effectiveness of any such instrument shall be conditioned upon receipt of such instruments from all Trustees hereunder. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1008 shall survive. Section 402 Application of Trust Money. -------------------------- Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee. ARTICLE FIVE REMEDIES Section 501 Events of Default. ----------------- "Event of Default", whenever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article 13 or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or (4) default in the performance, or breach, of any covenant or warranty of the Company in the Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by 28 the Holders of at least 10% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5) the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary case under the Federal or state bankruptcy laws, as now or hereafter constituted, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (6) the commencement by the Company of a voluntary case under the Federal or state bankruptcy laws, as now or hereafter constituted, or the consent by the Company to the entry of a decree or order for relief in an involuntary case under any such law; or (7) any other Event of Default provided with respect to Securities of such series specified as contemplated by Section 301. Section 502 Acceleration of Maturity; Rescission and Annulment. -------------------------------------------------- If an Event of Default described in clauses (5) or (6) of Section 501 with respect to Securities of any series at the time Outstanding (a "Bankruptcy Event of Default") occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all Securities of that series, (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities, (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and 29 (2) all Bankruptcy Events of Default with respect to Securities of that series have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 503 Collection of Indebtedness and Suits for Enforcement by ------------------------------------------------------- Trustee. - ------- The Company covenants that if (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 504 Trustee May File Proofs of Claim. -------------------------------- In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized 30 (i) to file and prove a claim of the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and other amounts due the Trustee under Section 607. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of the Holder in any such proceeding. Section 505 Trustee May Enforce Claims Without Possession of ------------------------------------------------ Securities. - ---------- All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 506 Application of Money Collected. ------------------------------ Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereof of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee hereunder; and SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively. 31 Section 507. Limitation on Suits. ------------------- No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holder or Holders of any other series, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 508. Unconditional Right of Holders to Receive Principal, ---------------------------------------------------- Premium and Interest. - -------------------- Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 509. Restoration of Rights and Remedies. ---------------------------------- If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee, and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. 32 Section 510. Rights and Remedies Cumulative. ------------------------------ Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 511. Delay or Omission Not Waiver. ---------------------------- No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 512. Control by Holders. ------------------ The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 513. Waiver of Past Defaults. ----------------------- The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default: (1) in the payment of the principal of (or premium, if any) or interest on any Security of such series, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. 33 Section 514. Undertaking for Costs. --------------------- All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney's fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date). Section 515. Waiver of Stay or Extension Laws. -------------------------------- The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the exercise of any power herein granted to the Trustee, but will suffer and permit the exercise of every such power as though no such law had been enacted. ARTICLE SIX THE TRUSTEE Section 601. Certain Duties and Responsibilities. ----------------------------------- (a) Except during the continuance of an Event of Default with respect to Securities of any series, (1) the Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. 34 (b) In case an Event of Default with respect to Securities of any series has occurred and is continuing, the Trustee shall exercise, with respect to Securities of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that (1) this Subsection shall not be construed to limit the effect to Subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the Direction of the Holders of majority in principal amount of the Outstanding Securities of any series, determined as provided in Section 512, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 602. Notice of Defaults. ------------------ Within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as their names and addresses appear in the Security Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, --------- -------- except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security of such series or in the payment of any sinking fund instalment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders of Securities of such series; and provided, further, that in the case of any default of the character specified in - --------- -------- Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. 35 Section 603. Certain Rights of Trustee. ------------------------- Subject to the provisions of Section 601: (a) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer's Certificate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel 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 reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the 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 Trustee, in its direction, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, custodian, nominee or attorney appointed with due care by it hereunder. Section 604. Not Responsible for Recitals or Issuance of Securities. ------------------------------------------------------ The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity of sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating 36 Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 605 May Hold Securities. ------------------- The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 603 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. Section 606 Money Held in Trust. ------------------- Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. Section 607 Compensation and Reimbursement. ------------------------------ The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of any express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee and its officers, employees and directors for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of the powers or duties of the Trustee hereunder. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except for funds held in trust for the benefit of the Holders of Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default hereunder, the fees, charges, expenses and indemnities provided for in this Section 607 (including the charges of Trustee's counsel) are intended to constitute expenses of the administration under any applicable Federal or state bankruptcy, insolvency or other similar law. 37 The provision of this Section 607 shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee, any Paying Agent or any Authenticating Agent, as the case may be. Section 608 Disqualification; Conflicting Interests. --------------------------------------- If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being the trustee under the indenture dated as of August 15, 1996 and with respect to all series of securities issued or issuable under such indenture. Section 609 Corporate Trustee Required; Eligibility. --------------------------------------- There shall at all times be a Trustee hereunder which shall be a corporation which satisfies the requirements of Section 310(a) of the Trust Indenture Act and which has a combined capital and surplus of not less than $50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of a supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 610 Resignation and Removal; Appointment of Successor. ------------------------------------------------- (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (d) If at any time (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or 38 (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all other similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal, or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all other similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. (g) Upon the appointment of a successor Trustee (except pursuant to Section 612), all fees, charges and expenses to date of the retiring Trustee shall become immediately due and payable. (h) The retiring Trustee shall have no liability for the acts or omissions of any successor Trustee hereunder except with respect to successors pursuant to Section 612. Section 611 Acceptance of Appointment by Successor. -------------------------------------- (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without 39 any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers, and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 607. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer, and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder, and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor Trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraphs (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 612 Merger, Conversion, Consolidation or Succession to -------------------------------------------------- Business. - -------- Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust 40 business of the Trustee, shall be the successor of the Trustee 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. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 613 Preferential Collection of Claims Against Company. ------------------------------------------------- If the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company or of any other obligor on the Securities, the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company or any such other obligor on the Securities. Section 614 Appointment of Authenticating Agent. ----------------------------------- At any time when any of the Securities remain Outstanding, the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, registration of transfer or partial redemption thereof and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such notice of resignation or upon such termination, or in case at any time such Authenticating 41 Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. The provisions of Sections 308, 603, 604, 605, 607 and 612 shall be applicable to each Authenticating Agent. Pursuant to each appointment made under this Section, the Securities of each series covered by such appointment may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. [NAME OF TRUSTEE] as Trustee By:______________________________ As Authenticating Agent By:______________________________ Authorized Officer In the event that the Trustee is also acting as Paying Agent or Transfer Agent and Registrar hereunder, the rights and protections afforded to the Trustee pursuant to Article VI shall also be afforded to such Paying Agent or Transfer Agent and Registrar. ARTICLE SEVEN LISTS OF HOLDERS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Company to Furnish Trustee Names and Addresses of ------------------------------------------------- Holders. - ------- The Company will furnish or cause to be furnished to the Trustee 42 (a) semi-annually, not more than 15 days after each Regular Record Date, in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and (b) at such times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; excluding from any such list names and addresses received by the Trustee in its capacity as Co-Security Registrar. Section 702. Preservation of Information; Communications to Holders. ------------------------------------------------------ (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Co-Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders made pursuant to the Trust Indenture Act. Section 703. Reports by Trustee. ------------------ (a) Within 60 days after May 15 of each year commencing with the year 1999, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, a brief report dated as of such May 15 that complies with the Trust Indenture Act. (b) The Trustee shall transmit by mail to all Holders such other reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange. Section 704. Reports by Company. ------------------ The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act; provided that any such information, documents or reports required to be filed 43 with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Company May Consolidate, Etc. Only on Certain Terms. --------------------------------------------------- The Company shall not consolidate with or merge into any other corporation or sell, convey, exchange, transfer or lease its properties and assets substantially as an entirety to any Person, unless: (1) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default; shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 802. Successor Corporation Substituted. --------------------------------- Upon any consolidation by the Company with or merger by the Company into any other corporation or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities. Section 803. Assumption by Subsidiary of Company's Obligations. ------------------------------------------------- A Subsidiary may assume the obligations of the Company for the due and punctual payment of the principal of (and premium, if any) and interest on the Securities and the performance of 44 the Company's other obligations under this Indenture and the Securities (except its obligations under Section 1004, which, as contemplated by Subsection (2) below, shall continue to bind the Company), to be performed or observed, provided that: - -------- (1) such Subsidiary shall expressly assume such obligations by an indenture supplemental hereto, executed and delivered to the Trustee; (2) the Company shall guarantee the obligations of such Subsidiary under the Securities and this Indenture, which guarantee shall also include an undertaking by the Company to continue to comply with the covenants set forth in Section 1004; (3) in addition to assuming obligations under the Securities and this Indenture, such Subsidiary shall agree to indemnify the Holder of each Security against (a) any tax, assessment or governmental charge imposed as a result of or relating to the act of such assumption and (b) costs or expenses incurred directly in connection with the act of assumption; (4) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; (5) the Company shall deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, to the effect that (a) such assumption, (b) such guarantee and (c) such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with and such supplemental indenture and guarantee by the Company have been duly authorized and delivered by the Company, and each constitutes a valid and legally binding instrument of the Company, enforceable in accordance with its terms subject to bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights generally, and subject, as to enforcement, to general principles of equity, and any other customary exceptions which such counsel states do not materially prejudice the rights of the Holders under this Indenture and the Securities; and (6) such Subsidiary shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to the effect that (a) such Subsidiary has obtained all governmental and regulatory approvals and consents necessary for its assumption of liability as principal debtor in respect of the Securities in place of the Company; (b) such approvals and consents are at the time of assumption in full force and effect; and (c) such supplemental indenture has been duly authorized and delivered by such Subsidiary, constitutes a valid and legally binding instrument of such Subsidiary, enforceable in accordance with its terms subject to bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights generally and subject, as to enforcement, to general principles of equity, and any other customary exceptions which such counsel states do not materially prejudice the rights of the Holders under this Indenture and the Securities. Upon compliance with, and subject to, the requirements set forth above in this Section 803, such Subsidiary shall succeed to and be substituted for the Company, with the same effect as if it had been named as the Company herein and in the Securities in place of the Company; and the Company shall thereupon be relieved of any further obligation or liability hereunder or upon the Securities (except as provided in Subsection (2) above and in its guarantee as aforesaid). Such Subsidiary may cause to be signed, and may issue in its own name, any or all of the Securities issuable hereunder which theretofore 45 shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Subsidiary, instead of the Company, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered as provided herein, with the guarantee of the Company endorsed thereon, and any Securities which such Subsidiary thereafter shall cause to be signed and delivered, with the guarantee of the Company endorsed thereon, to the Trustee for that purpose. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date thereof. In the event a Subsidiary shall assume the obligations of the Company in accordance with this Section 803, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate. ARTICLE NINE SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures Without Consent of Holders. -------------------------------------------------- Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities or to evidence the assumption by a Subsidiary of the Company's obligations in accordance with Section 803; or (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Events of Default; or (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; or (5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities; provided that any -------- such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holders of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or (6) to secure the Securities; or 46 (7) to establish the form or terms of Securities of any series as permitted by Section 201 and 301; or (8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); (9) to cure any ambiguity, to correct or supplement any provision contained herein or in any supplemental indenture which may be inconsistent with any other provision herein or in any supplemental indenture, or to make any other provisions with respect to matters or questions arising under this Indenture or under any supplemental indenture, provided such -------- action shall not adversely affect the interests of the Holders of Securities of any series in any material respect; and (10) to provide for the terms and conditions upon which Securities which qualify as capital under rules, regulations, orders, interpretive rulings and guidelines of the Primary Federal Regulator as from time to time in effect may be issued and the terms and characteristic of any such Securities; provided, however, that any such Securities shall be --------- -------- subordinated to Senior Indebtedness, and under certain circumstances, Additional Senior Obligations, as provided in Article Thirteen; provided -------- further, that no such supplemental indenture shall effect any change in any -------- Securities which may at the time be outstanding under this Indenture. Section 902. Supplemental Indentures With Consent of Holders. ----------------------------------------------- With the consent of the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, --------- -------- that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any instalment of principal or of interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or 47 (3) modify the provisions of this Indenture with respect to subordination of the Securities in a manner adverse to the Holders of such series, or (4) modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require --------- -------- the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in Section 1006 or the deletion of this provision, in accordance with the requirements of Section 611(b) and 901(8). A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 903. Execution of Supplemental Indentures. ------------------------------------ In executing or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Officer's Certificate stating that all conditions precedent to the execution of such supplemental indenture have been fulfilled and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 904. Effect of Supplemental Indentures. --------------------------------- Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 905. Conformity With Trust Indenture Act. ----------------------------------- Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. Section 906. Reference in Securities to Supplemental Indentures. -------------------------------------------------- Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the 48 Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. ARTICLE TEN COVENANTS Section 1001. Payment of Principal, Premium and Interest. ------------------------------------------ The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture. Section 1002. Maintenance of Office or Agency. ------------------------------- The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt, written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission --------- -------- shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designations or rescission and of any change in the location of any such other office or agency. The Company hereby designates as a Place of Payment for each series of Securities, the Borough of Manhattan, The City of New York, and appoints the Trustee at its Corporate Trust Office as Paying Agent in such city. Section 1003. Money for Securities Payments to be Held in Trust. ------------------------------------------------- If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. 49 Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its actions or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provision of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any) or interest on the Securities of that series; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for three years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease, provided, however, that the Trustee or such --------- -------- Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 1004. Corporate Existence. ------------------- Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, --------- -------- that the Company shall not be required to preserve any such right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the 50 conduct of the business of the Company and its Subsidiaries considered as a whole and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 1005. Statement as to Compliance. -------------------------- The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement, which need not comply with Section 102, signed by the Chairman of the Board, the President, a Vice Chairman or a Vice President and by the Treasurer, an Assistant Treasurer, the Comptroller or an Assistant Comptroller of the Company, stating as to each signer thereof, that (1) a review of the activities of the Company during such year and of performance under this Indenture has been made under his supervision, and (2) to the best of his knowledge, based on such review, (a) the Company has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to him and the nature and status thereof, and (b) no event has occurred and is continuing which is, or after notice or lapse of time or both would become, an Event of Default, or, if such an event has occurred and is continuing, specifying each such event known to him and the nature and status thereof. Section 1006. Waiver of Certain Covenants. --------------------------- The Company may omit in any particular instance to comply with any term, provision or condition set forth in Section 1004 with respect to the Securities of any series if before the time for such compliance the Holders of at least 66 2/3% in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. ARTICLE ELEVEN REDEMPTION OF SECURITIES Section 1101. Applicability of Article. ------------------------ Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article or Article Twelve. Section 1102. Election to Redeem; Notice to Trustee. ------------------------------------- The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed. In the case of any redemption of 51 Securities at the election of the Company prior to the expiration of any restriction on redemptions provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. Section 1103. Selection by Trustee of Securities to be Redeemed. ------------------------------------------------- If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 1104. Notice of Redemption. -------------------- Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price and the amount of any accrued interest to the Redemption Date, (3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed, (4) that on the Redemption Date, the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price and any accrued interest to the Redemption Date, and (6) that the redemption is for a sinking fund, if such is the case. 52 Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 1105. Deposit of Redemption Price. --------------------------- Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. Section 1106. Securities Payable on Redemption Date. ------------------------------------- Notice of redemption having been given as aforesaid, the Securities to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that instalments of interest whose --------- -------- Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender therefor for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. Section 1107. Securities Redeemed in Part. --------------------------- Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, of any authorized denomination as required by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE TWELVE SINKING FUNDS Section 1201. Applicability of Article. ------------------------ The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series. 53 The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. Section 1202. Satisfaction of Sinking Fund Payments With Securities. ----------------------------------------------------- The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such Series; provided, that such Securities have not been previously so credited. --------- Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 1203. Redemption of Securities for Sinking Fund. ----------------------------------------- Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 1106 and 1107. ARTICLE THIRTEEN SUBORDINATION OF SECURITIES Section 1301. Agreement to Subordinate. ------------------------ The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of a Security likewise covenants and agrees by his acceptance thereof, that the obligation of the Company to make any payment on account of the principal of (and premium, if any) and interest on each and all of the Securities shall be subordinate and junior in right of payment to the Company's obligations to the holders of Senior Indebtedness and, under the circumstances described in clause (ii) of this sentence, to the holders of Additional Senior Obligations, to the extent provided herein, and that in the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling 54 of assets and liabilities or similar proceedings or any liquidation or winding- up of or relating to the Company as a whole, whether voluntary or involuntary, (i) all obligations to holders of Senior Indebtedness shall be entitled to be paid in full before any payment shall be made on account of the principal of (and premium, if any) or interest on the Securities and, (ii) if after giving effect to the operation of clause (i) above, (A) any amount of cash, property or securities remains available for payment or distribution in respect of the Securities ("Excess Proceeds") and (B) creditors in respect of Additional Senior Obligations have not received payment in full of amounts due or to become due thereon or payment of such amounts have not been duly provided for, then such Excess Proceeds shall first be applied to pay or provide for the payment in full of all such Additional Senior Obligations before any payment shall be made on account of the principal of (and premium, if any) or interest on the Securities. In the event of any such proceeding, after payment in full of all sums owing with respect to Senior Indebtedness and Additional Senior Obligations, the Holders of the Securities, together with the holders of any obligations of the Company Ranking on a Parity with the Securities, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid principal of (and premium, if any) and interest on the Securities before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company Ranking Junior to the Securities. In addition, in the event of any such proceeding, if any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities, shall be received by the Trustee or the Holders of the Securities before all Senior Indebtedness and Additional Senior Obligations are paid in full and if the Holder or the Trustee, as the case may be, receiving such payment is aware at the time of receipt that all Senior Indebtedness and Additional Senior Obligations have not been paid in full, then such payment or distribution shall, if received by any Holder, be held in trust for the benefit of the holders of Senior Indebtedness and/or Additional Senior Obligations, as the case may be or, if received by the Trustee, shall be held by it and delivered forthwith to the trustee in bankruptcy, receiver, assignee, agent or other Person making payment or distribution of the assets of the Company, and, in each case, shall be applied to the payment of all Senior Indebtedness and Additional Senior Obligations remaining unpaid, until all such Senior Indebtedness and Additional Senior Obligations shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness and Additional Senior Obligations. For purposes of this paragraph only, the words, "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other company provided for by a plan of reorganization or readjustment which are subordinated in right of payment to all Senior Indebtedness and Additional Senior Obligations which may at the time be outstanding to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. The subordination provisions of the foregoing paragraph shall not be applicable to amounts at the time due and owing on the Securities on account of the unpaid principal of (and premium, if any) or interest on the Securities for the payment of which funds have been deposited in trust with the Trustee or have been set aside by the Company in trust in accordance with the provisions of this Indenture; nor shall such provisions impair any rights, interests, remedies or powers of any secured creditor of the Company in respect of any security the creation of which is not prohibited by the provisions of this Indenture. If there shall have occurred and be continuing (a) a default in any payment with respect to any Senior Indebtedness or (b) an event of default with respect to any Senior Indebtedness as a result of which the maturity thereof is accelerated, unless and until such payment default or event of default 55 shall have been cured or waived or shall have ceased to exist, no payments shall be made by the Company with respect to the principal of (or premium, if any) or interest on the Securities. The provisions of this paragraph shall not apply to any payment with respect to which the first paragraph of this Section would be applicable. The securing of any obligations of the Company Ranking on a Parity with the Securities or obligations Ranking Junior to the Securities shall not be deemed to prevent such obligations from constituting obligations of the Company Ranking on a Parity with the Securities or obligations Ranking Junior to the Securities. The consolidation of the Company with, or the merger of the Company into, another Person or the liquidation or dissolution of the Company following the conveyance or transfer of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article Eight shall not be deemed a dissolution, winding-up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities of the Company for the purposes of this Section if the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance, or transfer, comply with the conditions set forth in Article Eight. Section 1302. Obligation of the Company Unconditional. --------------------------------------- Nothing contained in this Article or elsewhere in this Indenture is intended to or shall impair, as between the Company and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay the Holders of the Securities the principal of (and premium, if any) and interest on the Securities when, where and as the same shall become due and payable, all in accordance with the terms of the Securities, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors other than the holders of Senior Indebtedness and Additional Senior Obligations, nor shall anything herein or therein prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon an Event of Default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness and Additional Senior Obligations in respect of cash, property, or securities of the Company received upon the exercise of any such remedy. Section 1303. Notice to Trustee of Facts Prohibiting Payment. ---------------------------------------------- The Company shall give prompt written notice to a Responsible Officer of the Trustee located at the Corporate Trust Office of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received at its Corporate Trust Office written notice thereof from the Company or a holder of Senior Indebtedness or Additional Senior Obligations or from any trustee therefor, and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 601, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (and premium, if any) or interest on any Security), then, anything herein contained to the contrary 56 notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it during or after such three Business Day period. Subject to the provisions of Section 601, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness or Additional Senior Obligations (or a trustee therefor) to establish that such notice has been given by a holder of Senior Indebtedness or Additional Senior Obligations (or a trustee therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness or Additional Senior Obligations to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness or Additional Senior Obligations held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 1304. Application by Trustee of Moneys Deposited With It. -------------------------------------------------- Anything in this Indenture to the contrary notwithstanding, any deposit of moneys by the Company with the Trustee or any other agent (whether or not in trust) for any payment of the principal of (and premium, if any) or interest on any Securities shall, except as provided in Section 1303, be subject to the provisions of Section 1301. Section 1305. Subrogation to Rights of Holders of Senior Indebtedness ------------------------------------------------------- and Additional Senior Obligations. - --------------------------------- Subject to the payment in full of all Senior Indebtedness and Additional Senior Obligations, the Holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness and the rights of holders of Additional Senior Obligations to receive payments or distributions of assets of the Company applicable to such Senior Indebtedness or Additional Senior Obligations, as the case may be, until the principal of (and premium, if any) and interest on the Securities shall be paid in full. For purposes of such subrogation, none of the payments or distributions to the holders of the Senior Indebtedness or to the holders of Additional Senior Obligations to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article, or of payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness or to the holders of Additional Senior Obligations by Holders of the Securities or the Trustee shall, as among the Company, its creditors other than holders of Senior Indebtedness, holders of Additional Senior Obligations and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness or the Additional Senior Obligations, as the case may be; it being understood that the provisions of this Article are intended solely for the purpose of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Indebtedness and the holders of Additional Senior Obligations on the other hand. 57 Section 1306. Subordination Rights Not Impaired by Acts or Omissions ------------------------------------------------------ of Company, Holders of Senior Indebtedness or Holders of Additional Senior - -------------------------------------------------------------------------- Obligations. - ----------- No right of any present or future holders of any Senior Indebtedness or Additional Senior Obligations to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. Section 1307. Authorization of Trustee to Effectuate Subordination of ------------------------------------------------------- Securities. - ---------- Each Holder of a Security, by his acceptance thereof, authorizes and expressly directs the Trustee on his behalf to take such actions as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes. If, in the event of any proceeding or other action relating to the Company referred to in the first sentence of Section 1301, a proper claim or proof of debt in the form required in such proceeding or action is not filed by or on behalf of the Holders of the Securities prior to fifteen days before the expiration of the time to file such claim or claims, then the holder or holders of Senior Indebtedness and Additional Senior Obligations shall have the right to file and are hereby authorized to file appropriate claim for and on behalf of the Holders of the Securities; provided, that no such filing by any holders of Senior Indebtedness or Additional Senior Obligations shall preclude the Trustee from filing such a proof of claim on behalf of the Holders of Securities. Section 1308. Right of Trustee to Hold Senior Indebtedness and ------------------------------------------------ Additional Senior Obligations. - ----------------------------- The Trustee in its individual capacity shall be entitled to all of the rights set forth in this Article in respect of any Senior Indebtedness or Additional Senior Obligations at any time held by it in its individual capacity to the same extent as any other holder of such Senior Indebtedness or Additional Senior Obligations, and nothing in this Indenture shall be construed to deprive the Trustee of any of its rights as such holder. Nothing in this Article shall subordinate to Senior Indebtedness or Additional Senior Obligations the claims of the Trustee under Section 607. Section 1309. Article Thirteen Not to Prevent Events of Default. ------------------------------------------------- The failure to make a payment pursuant to the Securities by reason of any provision in this Article shall not be construed as preventing the occurrence of an Event of Default. Section 1310. Article Applicable to Paying Agents. ----------------------------------- In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the content otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Section 1308 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. 58 Section 1311. Reliance on Judicial Order or Certificate of -------------------------------------------- Liquidating Agent. - ----------------- Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 601, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness, Additional Senior Obligations and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. Section 1312. Trustee Not Fiduciary for Holders of Senior Indebtedness ------------------------------------------------------- or Holders of Additional Senior Obligations. - ------------------------------------------- The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness or the holders of Additional Senior Obligations and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other Person, cash, property or securities to which any holders of Senior Indebtedness or Additional Senior Obligations shall be entitled by virtue of this Article or otherwise. Section 1313. Payment Permitted If No Default. ------------------------------- Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities shall prevent the Company, at any time except during the case of any insolvency, receivership, conservatorship, reorganization, readjustment or debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company referred to in Section 1301 from making payments at any time of principal of (and premium, if any) or interest on the Securities. Section 1314. Regarding Securities Issued Under the 1989 Indenture or ------------------------------------------------------- the 1993 Indenture. - ------------------ For purposes of the 1989 Indenture and the 1993 Indenture, the Securities will not be "Senior Indebtedness" (as such term is defined in Section 101 of the 1989 Indenture and Section 101 of the 1993 Indenture), but the Securities will be treated as "Ranking on a Parity with the Securities" (as such term is defined in Section 101 of the 1989 Indenture and Section 101 of the 1993 Indenture), except to the extent that, upon the happening of any event of the kind specified in the first sentence of the first paragraph of Section 1301, the Holders of the Securities may, under certain circumstances in which there are obligations of the Company to creditors other than holders of Senior Indebtedness and holders of Additional Senior Obligations, be entitled to be paid from the remaining assets of the Company before any payment is made on account of securities issued under the 1989 Indenture or the 1993 Indenture. 59 ARTICLE FOURTEEN HOLDERS' MEETINGS Section 1401. Purposes for Which Meetings May be Called. ----------------------------------------- A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article for any of the following purposes: (1) to give any notice to the Company or to the Trustee, or to give any direction to the Trustee, or to waive or consent to the waiving of any Event of Default hereunder and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article Five; (2) to remove the Trustee or appoint a successor trustee, pursuant to the provisions of Article Six; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 901 and 902; or (4) to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Securities under any other provision of this Indenture or under applicable law. Section 1402. Manner of Calling Meetings. -------------------------- The Trustee may at any time call a meeting of Holders to take any action specified in Section 1401. Notice of every meeting of the Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed by the Trustee to the Company and to the Holders not less than 20 nor more than 60 days prior to the date fixed for the meeting. Any meeting shall be valid without notice if the Holders of all of the Outstanding Securities are present in person or by proxy, or if notice is waived before or after the meeting by the Holders of all of the Outstanding Securities, and if the Company and the Trustee are either present or have, before or after the meeting, waived notice. Section 1403. Call of Meetings by Company or Holders. -------------------------------------- In case at any time the Company, pursuant to a resolution of its Board of Directors, or the Holders of not less than 30% in aggregate principal amount of the Outstanding Securities, shall have requested the Trustee to call a meeting of Holders to take any action authorized in Section 1401 by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of such meeting within 20 days after receipt of such request, then the Company or such Holders in the amount above specified may determine the time and the place in New York, New York or in Winston-Salem, North Carolina for such meeting and may call such meeting to take any action authorized in Section 1401, by mailing notice thereof as provided in Section 1402. 60 Section 1404. Who May Attend and Vote at Meetings. ----------------------------------- To be entitled to vote at any meeting of Holders a person shall (a) be a Holder of one or more Securities with respect to which the meeting is being held, or (b) be a person appointed by an instrument in writing as proxy by such Holder of one or more Securities. The only persons who shall be entitled to be present or to speak at any meeting of Holders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 1405. Regulations May be Made by Trustee. ---------------------------------- Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders, in regard to proof of the holding of Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. At any meeting each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Outstanding Securities held or represented by him. Section 1406. Evidence of Actions by Holders. ------------------------------ Whenever the Holders of a specified percentage in aggregate principal amount of the Securities may take any action, the fact that the Holders of such percentage have acted may be evidence by (a) instruments of similar tenor executed by Holders in person or by attorney or written proxy, or (b) the Holders voting in favor thereof at any meeting of Holders called and held in accordance with the provisions of the rules for meetings of Holders, or (c) by a combination thereof. The Trustee may require proof of any matter concerning the execution of any instrument by a Holder or his attorney or proxy as it shall deem necessary. Section 1407. Exercise of Rights of Trustee and Holders Not to be --------------------------------------------------- Hindered or Delayed. - ------------------- Nothing in this Article contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Securities. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 61 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. WACHOVIA CORPORATION By: /s/ Donald K. Truslow --------------------------------------- [SEAL] Attest: /s/ Alice Washington Grogan - -------------------------------- THE CHASE MANHATTAN BANK, as Trustee By: /s/ Joanne Adamis ------------------------------------ [SEAL] Attest: /s/ Gregory P. Shea - --------------------------------- 62 STATE OF ) ) ss: COUNTY OF ) On the day of , 1998, before me personally came , to me known, who, being by me duly sworn, did depose and say that is of Wachovia Corporation, one of the corporations described in and which executed the foregoing instrument; that knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that signed name thereto by like authority. ------------------------------- Notary Public, My Commission Expires , 199 STATE OF ) ) ss: COUNTY OF ) On the day of , 1998, before me personally came , to me known, who, being by me duly sworn, did depose and say that is a of The Chase Manhattan Bank, one of the corporations described in and which executed the foregoing instrument; that knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that signed name thereto by like authority. ------------------------------- Notary Public, My Commission Expires , 199 WACHOVIA CORPORATION Reconciliation and tie between Trust Indenture Act of 1939 and Indenture dated as of July 15, 1998 Trust Indenture Indenture Act Section Section Section 310(a)(1)............................... 609 (a)(2)............................... 609 (a)(3)............................... Not Applicable (a)(4)............................... Not Applicable (b).................................. 608, 610 Section 311(a).................................. 613 (b).................................. 613 Section 312(a).................................. 701, 702(a) (b).................................. 702(b) (c).................................. 702(c) Section 313(a).................................. 703(a) (b).................................. 703(b) (c).................................. 703(a), 703(b) (d).................................. 703(c) Section 314(a).................................. 704 (b).................................. Not Applicable (c)(1)............................... 102 (c)(2)............................... 102 (c)(3)............................... Not Applicable (d).................................. Not Applicable (e).................................. 102 Section 315(a).................................. 601(a) (b).................................. 602 (c).................................. 601(b) (d).................................. 601(c) (d)(1)............................... 601(a)(1) (d)(2)............................... 601(c)(2) (d)(3)............................... 601(c)(3) (e).................................. 514 Section 316(a).................................. 101 (a)(1)(A)............................ 502, 513 (a)(1)(B)............................ 513 (a)(2)............................... Not Applicable (b).................................. 508 Section 317(a)(1)............................... 503 (a)(2)............................... 504 (b).................................. 1003 Section 318(a).................................. 107 - --------------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. EX-5.(A) 4 OPINION OF WILLIAM M. WATSON, JR Exhibit 5(a) May 24, 1999 Wachovia Corporation 100 North Main Street Winston-Salem, North Carolina 27101 Ladies and Gentlemen: In connection with the registration under the Securities Act of 1993, as amended (the "Act"), of $1,700,000,000 aggregate principal amount of debt securities consisting of senior debt securities and/or subordinated debt securities (the "Debt Securities") of Wachovia Corporation, a North Carolina corporation (the "Company"), I, as Senior Vice President, Counsel and Secretary of the Company, have examined such corporate records, certificates and other documents, and such questions of law, as I have considered necessary or appropriate for purposes of this opinion. Each capitalized term used herein, unless otherwise defined herein, has the meaning ascribed to it in the Registration Statement filed with the Securities and Exchange Commission as of the date hereof (the "Registration Statement"). For the purposes of giving the opinion set forth below, I have assumed the following with respect to the sale of Debt Securities: (i) that the sale will be pursuant to the terms and conditions as contemplated in the Registration Statement, which will have become and remain effective under the Act; (ii) that all necessary Company actions, approvals, and authorizations will have been taken or obtained, and that such actions will be in conformity with applicable law; (iii) that all necessary filings and approvals with any regulatory authority will have been made or obtained, including, without limitation, the fixing of terms with respect to any security, and that such actions will be in conformity with applicable law; (iv) any actions, approvals or authorizations required by any applicable indenture will have been taken or obtained; (v) that the required consideration will have been received by the Company; and (vi) that all parties, other than the Company, will have taken or obtained any and all necessary actions, authorizations and approvals, that such actions will be in conformity with applicable law and that any document executed and delivered by such parties will be enforceable against such parties. Based upon the foregoing, and subject to the qualifications and limitations stated herein, it is my opinion that the Debt Securities, when authorized and sold as contemplated in the Registration Statement, will be validly issued by the Company and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms. My opinion set forth in the preceding paragraph is subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether 2 considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. Insofar as the opinion set forth herein relates to issues governed by the law of the State of New York, I have relied on the accompanying opinion of Simpson Thacher & Bartlett. I consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to me under the caption "Legal Matters" in the Prospectus. In giving such consent, I do not thereby admit that I am in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ William M. Watson, Jr. William M. Watson, Jr. EX-5.(B) 5 OPINION OF SIMPSON THACHER & BARTLETT Exhibit 5(b) May 24,1999 Wachovia Corporation 100 North Main Street Winston-Salem, North Carolina 27101 Ladies and Gentlemen: This opinion is delivered to you in connection with the Registration Statement on Form S-3 (the "Registration Statement") filed by Wachovia Corporation, a North Carolina corporation (the "Company"), with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, relating to the proposed issuance by the Company of $1,700,000,000 aggregate principal amount of debt securities consisting of senior debt securities and/or subordinated debt securities (the "Securities"). The Securities will be issued under either a senior indenture or a subordinated indenture (the "Indentures"), each between the Company and The Chase Manhattan Bank, as Trustee. We have examined the Registration Statement and the Indentures, which have been filed with the Commission as exhibits to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other and further investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company. In rendering the opinion set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. We also have assumed that the Indentures are the valid and legally binding obligations of the Trustee. We have assumed further that (1) the Company has duly authorized, executed and delivered the Indentures and (2) execution, delivery and performance by the Company of the Indentures and the Securities do not and will not violate the laws of the State of North Carolina or any other applicable laws (excepting the laws of the State of New York and the Federal laws of the United States). Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that assuming (a) the taking of all necessary corporate action to approve the issuance and terms of the Securities, the terms of the offering thereof and related matters by the Board of Directors of the Company, a duly constituted and acting committee of such Board or duly authorized officers of the Company (such Board of Directors, committee or authorized officers being hereinafter referred to as the Board) and (b) the due execution, authentication, issuance and delivery of the Securities, upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the Board and otherwise in accordance with the provisions of the Indentures and such agreement, the Securities will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms. Our opinion set forth above is subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York and the Federal law of the United States. William M. Watson, Jr., Senior Vice President, Counsel and Secretary of the Company, is authorized to rely on this opinion letter as to matters of New York law in rendering his opinion filed as Exhibit 5(a) to the Registration Statement. We hereby consent to the filing of this opinion letter as Exhibit 5(b) to the Registration Statement and to the use of our name under the caption "Legal Matters" in the Prospectus included in the Registration Statement. Very truly yours, /S/ SIMPSON THACHER & BARTLETT SIMPSON THACHER & BARTLETT EX-12 6 WACHOVIA CORPORATION RATIO OF EARNINGS Exhibit 12 WACHOVIA CORPORATION RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended March 31, Year Ended December 31, (A) EXCLUDING INTEREST ON 1999 1998 1997 1996 1995 1994 DEPOSITS ------------------- ------------- ------------ ------------ -------------- ------------ Earnings: Income before income taxes $368,745 $1,303,781 $ 869,119 $1,100,308 $1,023,290 $ 885,402 Less capitalized interest (43) (593) (167) -- (1,530) (362) Fixed charges 220,610 976,201 884,806 900,277 885,040 603,157 -------- ---------- ---------- ---------- ---------- ---------- Earnings as adjusted $589,312 $2,279,389 $1,753,758 $2,000,585 $1,906,800 $1,488,197 ======== ========== ========== ========== ========== ========== Fixed charges: Interest on purchased and other short term borrowed funds $103,170 $ 563,846 $ 478,162 $ 482,236 $ 527,765 $ 318,301 Interest on long-term debt 111,773 390,662 387,107 399,796 340,211 267,841 Portion of rents 5,667 21,693 19,537 18,245 17,064 17,015 representative of the -------- ---------- ---------- ---------- ---------- ---------- interest factor (1/3) of rental expense Fixed charges $220,610 $ 976,201 $ 884,806 $ 900,277 $ 885,040 $ 603,157 ======== ========== ========== ========== ========== ========== Ratio of earnings to fixed charges 2.67 x 2.33 x 1.98 x 2.22 x 2.15 x 2.47 x (B) INCLUDING INTEREST ON DEPOSITS Adjusted earnings from $589,312 $2,279,389 $1,753,758 $2,000,585 $1,906,800 $1,488,197 (A) above Add interest on deposits 307,367 1,359,705 1,303,549 1,203,739 1,143,179 782,864 -------- ---------- ---------- ---------- ---------- ---------- Earnings as adjusted $896,679 $3,639,094 $3,057,307 $3,204,324 $3,049,979 $2,271,061 ======== ========== ========== ========== ========== ========== Fixed charges: Fixed charges from (A) $220,610 $ 976,201 $ 884,806 $ 900,277 $ 885,040 $ 603,157 above Interest on deposits 307,367 1,359,705 1,303,549 1,203,739 1,143,179 782,864 -------- ---------- ---------- ---------- ---------- ---------- Adjusted fixed charges $527,977 $2,335,906 $2,188,355 $2,104,016 $2,028,219 $1,386,021 ======== ========== ========== ========== ========== ========== Adjusted earnings to adjusted fixed charges 1.70 x 1.56 x 1.40 x 1.52 x 1.50 x 1.64 x
EX-23.(A) 7 CONSENT OF INDEPENDENT AUDITORS - ERNST & YOUNG Exhibit 23(a) Consent of Independent Auditors We consent to the reference to our firm under the caption "Experts" in the Registration Statements (Form S-3) and related Prospectus of Wachovia Corporation for the registration of $2,500,000 of debt securities and to the incorporation by reference therein of our report dated January 14, 1999, with respect to the consolidated financial statements of Wachovia Corporation incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Ernst & Young LLP Winston-Salem, North Carolina May 19, 1999 EX-23.(B) 8 CONSENT OF INDEPENDENT AUDITORS - KPMG Exhibit 23(b) CONSENT OF INDEPENDENT AUDITORS The Board of Directors Wachovia Corporation: We consent to the use of our reports with respect to Central Fidelity National Bank and Central Fidelity Banks, Inc. incorporated herein by reference. /s/ KPMG LLP KPMG LLP Richmond, Virginia May 17, 1999 EX-24.(A) 9 POWER OF ATTORNEY OF DIRECTORS OF WACHOVIA CORP Exhibit 24(a) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of Wachovia Corporation (the "Corporation"), and each of us, do hereby appoint Kenneth W. McAllister and William M. Watson, Jr., and each of them, our true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for us and in our name, place and stead in our capacities as directors of Wachovia Corporation, to a new Registration Statement on Form S-3, or other applicable form, relating to an offering of not more than $2.5 billion of the Corporation's senior and/or subordinated debt securities, with the Securities and Exchange Commission, and to sign and file all amendments to the Registration Statement, with any exhibits and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to take all actions necessary to effect the purposes of this Power of Attorney, as fully to all intents and purposes as we might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. This the 12th day of May 1999. /s/ L .M. Baker, Jr. - ---------------------------------------------- L. M. Baker, Jr. /s/ Peter C. Browning - ------------------------------------------- Peter C. Browning /s/ John L. Clendenin - ------------------------------------------ John L. Clendenin /s/ George W. Henderson, III - ------------------------------------- George W. Henderson, III /s/ Robert A. Ingram - ------------------------------------------- Robert A. Ingram /s/ Elizabeth Valk Long - ----------------------------------------- Elizabeth Valk Long /s/ Lloyd U. Noland, III - ------------------------------------------ Lloyd U. Noland, III /s/ John C. Whitaker, Jr. - ------------------------------------------ John C. Whitaker, Jr. /s/ James S. Balloun - ------------------------------------------------ James S. Balloun /s/ John T. Casteen III - ------------------------------------------------ John T. Casteen III /s/ Thomas K. Hearn, Jr. - -------------------------------------------- Thomas K. Hearn, Jr. /s/ W. Hayne Hipp - ---------------------------------------------- W. Hayne Hipp /s/ George R. Lewis - ---------------------------------------------- George R. Lewis /s/ John G. Medlin, Jr. - ---------------------------------------------- John G. Medlin, Jr. /s/ Sherwood H. Smith, Jr. - ------------------------------------------- Sherwood H. Smith, Jr. EX-24.(B) 10 POWER OF ATTORNEY OF OFFICERS OF WACHOVIA CORP Exhibit 24 (b) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of Wachovia Corporation (the "Corporation"), and each of us, do hereby appoint Kenneth W. McAllister and William M. Watson, Jr., and each of them, our true and lawful attorneys-in-fact (with full power of substitution and resubstitution) to act for us and in our name, place and stead in the capacities set forth opposite our names, to execute for us and in our behalf, a new Registration Statement on Form S-3, or other applicable form, relating to an offering of not more than $2.5 billion of the Corporation's senior and/or subordinated debt securities, with the Securities and Exchange Commission, and to sign and file all amendments to the Registration Statement, with any exhibits and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them individually, full power and authority to take all actions necessary to effect the purposes of this Power of Attorney, as fully to all intents and purposes as we might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. This the 21st day of May 1999. /s/ Robert S. McCoy, Jr. Vice Chairman and - --------------------------------- Chief Financial Officer Robert S. McCoy, Jr. (Principal Financial Officer) /s/ Donald K. Truslow Senior Executive Vice - --------------------------------- President, Comptroller, and Donald K. Truslow Treasurer (Principal Financial Officer) EX-25.(A) 11 SENIOR DEBT SECURITIES FORM T-1 EXHIBIT 25(a) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ___________________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ________________________________________ THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ____________________________________________ Wachovia Corporation (Exact name of obligor as specified in its charter) North Carolina 56-1473727 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 100 North Main Street Winston-Salem North Carolina 27101 (Address of principal executive offices) (Zip Code) --------------------------------------------- Senior Debt Securities (Title of the indenture securities) --------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 12th day of May, 1999. THE CHASE MANHATTAN BANK By /s/ Joanne Adamis ------------------------ Joanne Adamis Second Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 1998, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin......................................................... $ 13,915 Interest-bearing balances................................................. 7,805 Securities: Held to maturity securities.................................................... 1,429 Available for sale securities.................................................. 56,327 Federal funds sold and securities purchased under agreements to resell...................................................... 21,733 Loans and lease financing receivables: Loans and leases, net of unearned income.................................. $131,095 Less: Allowance for loan and lease losses................................. 2,711 Less: Allocated transfer risk reserve..................................... 0 -------- Loans and leases, net of unearned income, allowance, and reserve.................................................... 128,384 Trading Assets................................................................. 48,949 Premises and fixed assets (including capitalized leases)................................................................... 3,095 Other real estate owned........................................................ 239 Investments in unconsolidated subsidiaries and associated companies...................................................... 199 Customers' liability to this bank on acceptances outstanding............................................................... 1,209 Intangible assets.............................................................. 2,081 Other assets................................................................... 11,352 -------- TOTAL ASSETS................................................................... $296,717 ========
- 4 - LIABILITIES Deposits In domestic offices.......................... $105,879 Noninterest-bearing...................$39,175 Interest-bearing.......................66,704 In foreign offices, Edge and Agreement, subsidiaries and IBF's....................... 79,294 Noninterest-bearing ...................$4,082 Interest-bearing.......................75,212 Federal funds purchased and securities sold under agreements to repurchase............................. 32,546 Demand notes issued to the U.S. Treasury............. 629 Trading liabilities.................................. 36,807 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less 4,478 With a remaining maturity of more than one year through three years........................ 213 With a remaining maturity of more than three years...................................... 115 Bank's liability on acceptances executed and outstanding......................................... 1,209 Subordinated notes and debentures.................... 5,408 Other liabilities.................................... 10,855 TOTAL LIABILITIES.................................... 277,433 ---------- EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock............................................... 1,211 Surplus (exclude all surplus related to preferred stock).. 11,016 Undivided profits and capital reserves..................... 6,762 Net unrealized holding gains (losses) on available-for-sale securities........................... 279 Cumulative foreign currency translation adjustments........ 16 TOTAL EQUITY CAPITAL....................................... 19,284 -------- TOTAL LIABILITIES AND EQUITY CAPITAL....................... $296,717 ======== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) THOMAS G. LABRECQUE ) DIRECTORS WILLIAM B. HARRISON, JR. ) - 5 - EX-25.(B) 12 SUBORDINATED DEBT SECURITIES FORM T-1 EXHIBIT 25(b) - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ___________________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ________________________________________ THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ____________________________________________ Wachovia Corporation (Exact name of obligor as specified in its charter) North Carolina 56-1473727 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 100 North Main Street Winston-Salem North Carolina 27101 (Address of principal executive offices) (Zip Code) --------------------------------------------- Subordinated Debt Securities (Title of the indenture securities) --------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 12th day of May, 1999. THE CHASE MANHATTAN BANK By /s/ Joanne Adamis ------------------------ Joanne Adamis Second Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 1998, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ................................. $ 13,915 Interest-bearing balances ......................... 7,805 Securities: .......................................... Held to maturity securities .......................... 1,429 Available for sale securities ........................ 56,327 Federal funds sold and securities purchased under agreements to resell .............................. 21,733 Loans and lease financing receivables; Loans and leases, net of unearned income $131,095 Less: Allowance for loan and lease losses 2,711 Less: Allocated transfer risk reserve ... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ............................ 128,384 Trading Assets ....................................... 48,949 Premises and fixed assets (including capitalized leases) ........................................... 3,095 Other real estate owned .............................. 239 Investments in unconsolidated subsidiaries and associated companies ............................. 199 Customers' liability to this bank on acceptances outstanding ...................................... 1,209 Intangible assets .................................... 2,081 Other assets ......................................... 11,352 ------ TOTAL ASSETS ......................................... $296,717 ========
- 4 - LIABILITIES Deposits In domestic offices.......................... $105,879 Noninterest-bearing...................$39,175 Interest-bearing.......................66,704 In foreign offices, Edge and Agreement, subsidiaries and IBF's....................... 79,294 Noninterest-bearing ...................$4,082 Interest-bearing.......................75,212 Federal funds purchased and securities sold under agreements to repurchase............................. 32,546 Demand notes issued to the U.S. Treasury............. 629 Trading liabilities.................................. 36,807 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less 4,478 With a remaining maturity of more than one year through three years........................ 213 With a remaining maturity of more than three years...................................... 115 Bank's liability on acceptances executed and outstanding......................................... 1,209 Subordinated notes and debentures.................... 5,408 Other liabilities.................................... 10,855 TOTAL LIABILITIES.................................... 277,433 ---------- EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock............................................... 1,211 Surplus (exclude all surplus related to preferred stock).. 11,016 Undivided profits and capital reserves..................... 6,762 Net unrealized holding gains (losses) on available-for-sale securities........................... 279 Cumulative foreign currency translation adjustments........ 16 TOTAL EQUITY CAPITAL....................................... 19,284 -------- TOTAL LIABILITIES AND EQUITY CAPITAL....................... $296,717 ======== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) THOMAS G. LABRECQUE ) DIRECTORS WILLIAM B. HARRISON, JR. ) - 5 - -----END PRIVACY-ENHANCED MESSAGE-----