e8-k

0000950144-01-508003.txt : 20011026 0000950144-01-508003.hdr.sgml : 20011026 ACCESSION NUMBER: 0000950144-01-508003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20011018 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELLSOUTH CORP CENTRAL INDEX KEY: 0000732713 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 581533433 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08607 FILM NUMBER: 1763503 BUSINESS ADDRESS: STREET 1: 1155 PEACHTREE ST NE STREET 2: ROOM 15G03 CITY: ATLANTA STATE: GA ZIP: 30309-3610 BUSINESS PHONE: 4042492000 MAIL ADDRESS: STREET 1: 1155 PEACHTREE STREET NE CITY: ATLANTA STATE: GA ZIP: 30309-3610 8-K 1 g72203e8-k.htm BELLSOUTH CORPORATION e8-k

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
October 18, 2001

BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)


Georgia	1-8607	58-1533433

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


Room 15G03, 1155 Peachtree Street, N. E., Atlanta, Georgia		30309-3610

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code
(404) 249-2000

TABLE OF CONTENTS


SIGNATURE
Indenture dated as of August 15, 2001
Indenture dated as of August 15, 2001
Statement of Eligibility of Trustee
Statement of Eligibility of Trustee
Third Quarter 2001 Financial Results

Cautionary Language Concerning Forward-Looking Statements

In addition to historical information, this document contains forward-looking statements regarding events and financial trends that may affect our future operating results, financial position and cash flows. These statements are based on our assumptions and estimates and are subject to risks and uncertainties. For these statements, we claim the protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995.

There are possible developments that could cause our actual results to differ materially from those forecast or implied in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are current only as of the date of this filing. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

While the below list of cautionary statements is not exhaustive, some factors that could affect future operating results, financial position and cash flows and could cause actual results to differ materially from those expressed in the forward-looking statements are:

• a change in economic conditions in domestic or international markets where we operate or have material investments which would affect demand for our services;

• significant deterioration in foreign currencies relative to the U.S. dollar in foreign countries in which we operate;

• changes in U.S. or foreign laws or regulations, or in their interpretations, which could result in the loss, or reduction in value, of our licenses, concessions or markets, or in an increase in competition, compliance costs or capital expenditures;

• a decrease in the growth rate of demand for the services which we offer;

• the intensity of competitive activity and its resulting impact on pricing strategies and new product offerings;

• protracted delay in our entry into the interLATA long distance market;

• higher than anticipated start-up costs or significant up-front investments associated with new business initiatives;

• the outcome of pending litigation;

• unanticipated higher capital spending from, or delays in, the deployment of new technologies;

• the impact of terrorist attacks on our business; and

• the impact of the wireless joint venture with SBC Communications, known as Cingular Wireless, including marketing and product development efforts and financial capacity.

Item 5. Other Events and Regulation FD Disclosure

On October 18, 2001, BellSouth announced earnings for the third quarter and year-to-date periods of 2001. See the attached financial results at Exhibit 99-a.

Item 7. Financial Statements and Exhibits


Exhibit No.
4-a		Indenture dated as of August 15, 2001 between BellSouth Corporation and The Chase Manhattan Bank, as Trustee

4-b		Indenture dated as of August 15, 2001 between BellSouth Corporation and SouthTrust Bank, as Trustee
25-a		Statement of Eligibility of Trustee (The Chase Manhattan Bank)

25-b		Statement of Eligibility of Trustee (SouthTrust Bank)

99-a		Third Quarter 2001 Financial Results

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


BELLSOUTH CORPORATION

By:	W. Patrick Shannon

	W. Patrick Shannon Vice President — Finance and Supply Chain Management October 22, 2001

EX-4.A 3 g72203ex4-a.txt INDENTURE DATED AS OF AUGUST 15, 2001 BELLSOUTH CORPORATION and THE CHASE MANHATTAN BANK Trustee INDENTURE Dated as of August 15, 2001 Providing for Issuance of Securities in Series Page 1 TABLE OF CONTENTS*
Page ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions............................................... 6 SECTION 1.02. Other Definitions......................................... 8 SECTION 1.03. Incorporation by Reference of Trust Indenture Act......... 9 SECTION 1.04. Rules of Construction..................................... 9 ARTICLE 2 THE SECURITIES SECTION 2.01. Issuable in Series........................................ 9 SECTION 2.02. Establishment of Terms and Form of Series of Securities... 10 SECTION 2.03. Execution, Authentication and Delivery.................... 12 SECTION 2.04. Registrar and Paying Agent................................ 14 SECTION 2.05. Payment on Securities..................................... 14 SECTION 2.06. Paying Agent to Hold Money in Trust....................... 15 SECTION 2.07. Securityholder Lists; Ownership of Securities............. 15 SECTION 2.08. Transfer and Exchange..................................... 16 SECTION 2.09. Replacement Securities.................................... 18 SECTION 2.10. Outstanding Securities.................................... 18 SECTION 2.11. Treasury Securities....................................... 19 SECTION 2.12. Temporary Securities...................................... 19 SECTION 2.13. Cancellation.............................................. 20 SECTION 2.14. Defaulted Interest........................................ 20 SECTION 2.15. CUSIP Numbers............................................. 20 ARTICLE 3 REDEMPTION SECTION 3.01. Notice to Trustee......................................... 21 SECTION 3.02. Selection of Securities to be Redeemed.................... 21 SECTION 3.03. Notice of Redemption...................................... 21 SECTION 3.04. Effect of Notice of Redemption............................ 22 SECTION 3.05. Deposit of Redemption Price............................... 22 SECTION 3.06. Securities Redeemed in Part............................... 22
Page 2
Page ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities..................................... 22 SECTION 4.02. Lien on Assets............................................ 22 SECTION 4.03. Reports by the Company.................................... 23 SECTION 4.04. Calculation of Original Issue Discount.................... 23 ARTICLE 5 SUCCESSORS SECTION 5.01. When the Company May Merge, etc........................... 24 ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default......................................... 24 SECTION 6.02. Acceleration.............................................. 25 SECTION 6.03. Other Remedies Available to Trustee....................... 25 SECTION 6.04. Waiver of Existing Defaults; Rescission of Acceleration... 25 SECTION 6.05. Control by Majority....................................... 25 SECTION 6.06. Limitation on Suits by Securityholders.................... 26 SECTION 6.07. Rights of Holders to Receive Payment...................... 26 SECTION 6.08. Collection Suits by Trustee............................... 27 SECTION 6.09. Trustee May File Proofs of Claim.......................... 27 SECTION 6.10. Priorities................................................ 27 SECTION 6.11. Undertaking for Costs..................................... 27 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee......................................... 28 SECTION 7.02. Rights of Trustee......................................... 29 SECTION 7.03. Individual Rights of Trustee.............................. 30 SECTION 7.04. Trustee's Disclaimer...................................... 30 SECTION 7.05. Notice of Defaults........................................ 30 SECTION 7.06. Reports by Trustee to Holders............................. 30 SECTION 7.07. Compensation and Indemnity................................ 30 SECTION 7.08. Replacement of Trustee.................................... 31 SECTION 7.09. Successor Trustee, Agents by Merger, etc.................. 33 SECTION 7.10. Eligibility............................................... 33
Page 3
Page ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. Termination of the Company's Obligations.................. 33 SECTION 8.02. Application of Trust Money................................ 34 SECTION 8.03. Repayment to the Company.................................. 34 SECTION 8.04. Indemnity for Government Obligations...................... 34 ARTICLE 9 AMENDMENTS AND WAIVERS SECTION 9.01. Without Consent of Holders................................ 34 SECTION 9.02. With Consent of Holders................................... 35 SECTION 9.03. Revocation and Effect of Consents......................... 36 SECTION 9.04. Notation on or Exchange of Securities..................... 36 SECTION 9.05. Trustee Protected......................................... 36 ARTICLE 10 SINKING FUNDS SECTION 10.01. Applicability of Article.................................. 36 SECTION 10.02. Satisfaction of Sinking Fund Payments with Securities..... 36 SECTION 10.03. Redemption of Securities for Sinking Fund................. 37 ARTICLE 11 MISCELLANEOUS SECTION 11.01. Trust Indenture Act Controls.............................. 37 SECTION 11.02. Notices................................................... 37 SECTION 11.03. Acts of Securityholders................................... 38 SECTION 11.04. Determination of Voting Rights; Conduct of Meetings....... 39 SECTION 11.05. Certificate and Opinion as to Conditions Precedent........ 39 SECTION 11.06. Statements Required in Certificate or Opinion............. 39 SECTION 11.07. Rules by Trustee and Agents............................... 40 SECTION 11.08. Legal Holidays............................................ 40 SECTION 11.09. Governing Law............................................. 40
Page 4
Page SECTION 11.10. No Adverse Interpretation of Other Agreements............. 40 SECTION 11.11. No Recourse Against Others................................ 40 SECTION 11.12. Securities in Foreign Currencies.......................... 40 SECTION 11.13. Currencies................................................ 40 SECTION 11.14. Execution in Counterparts................................. 40 SIGNATURES................................................................ 41
--------------- * This Table of Contents Does not Constitute Part of the Indenture. Page 5 INDENTURE dated as of August 15, 2001 between BELLSOUTH CORPORATION, Georgia corporation ("Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation ("Trustee"). RECITALS The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness ("Securities") as herein provided. All things necessary to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done. For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the Holders of the Securities. ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. "Affiliate" means any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Company. "Agent" means any authenticating agent, Paying Agent, Registrar or co-Registrar. "Authorized Newspaper" means a newspaper of general circulation, in an official language of the country of publication or in the English language, customarily published on days other than Legal Holidays in such country. Whenever successive weekly publications in an Authorized Newspaper are required hereunder, they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or different Authorized Newspapers. "Board of Directors" means the Board of Directors of the Company or any duly authorized committee thereof. "Board Resolution" means a copy of a resolution of the Board of Directors, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect. "Company" means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions hereof and thereafter means the successor. "Company Order" means an order signed by two Officers of the Company. "Default" means any event which is, or after notice or passage of time would be, an Event of Default. Page 6 "Depositary" means, with respect to the Securities of any Series issuable or issued in the form of one or more Registered Global Securities, the Person designated as Depositary pursuant to Section 2.02 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, 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 Registered Global Securities of that Series. "Holder" or "Securityholder" means the bearer of an Unregistered Security or of a coupon appertaining thereto or the person in whose name a Registered Security is registered on the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time and shall include the forms and terms of a particular Series of Securities established as contemplated hereunder. "Officer" means the chairman of the board of directors, the chief executive officer, the president, the chief financial officer, any vice-president, the treasurer, the general counsel, the secretary of the Company or, in the absence of the secretary or treasurer, any assistant secretary or assistant treasurer. "Officers' Certificate" means a certificate signed by two Officers of the Company. "Opinion of Counsel" means a written opinion of legal counsel who is acceptable to the Company. Counsel may be an employee of or counsel to the Company. "Original Issue Discount Security" means any Security which provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02. The term "principal" of a Security means the principal amount of the Security plus, when appropriate, the premium, if any, on the Security. "Registered Global Security" means a Security evidencing all or a part of a Series of Registered Securities, issued to the Depositary for such Series in accordance with Section 2.03 and bearing the legend prescribed in Section 2.03. "Registered Security" means any Security issued hereunder and registered by the Registrar. "Responsible Officer," when used with respect to the Trustee, shall mean any officer of the Trustee with direct responsibility for the administration of this Indenture, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with a particular subject. "SEC" means the Securities and Exchange Commission. "Series" or "Series of Securities" means a series of Securities. "Securities" means the debentures, notes and other obligations of the Page 7 Company issued, authenticated and delivered under this Indenture. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more of its other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "TIA" means the Trust Indenture Act of 1939, as amended, as in effect on the date of this Indenture (15 U.S.C. Section 77aaa et. seq.); provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendments, the Trust Indenture ct of 1939 as so amended. "Trustee" means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions hereof and thereafter means the successor and if, at any time, there is more than one Trustee, "Trustee" as used with respect to the Securities of any Series shall mean the Trustee with respect to that Series. "U.S. person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or a political subdivision thereof, or an estate or trust the income of which is subject to United States federal income taxation regardless of its source. "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions and all other area subject to its jurisdiction. "Unregistered Security" means any Security issued hereunder which is not a Registered Security. "Yield to Maturity" of a Series of Securities means the yield to maturity, calculated by the Company at the time of issuance of such Series or, if applicable, at the most recent determination of interest on such Series in accordance with accepted financial practice. SECTION 1.02. Other Definitions.
Term Section ---- ------- "Bankruptcy Law"............................................ 6.01 "Custodian"................................................. 6.01 "Event of Default".......................................... 6.01 "Legal Holiday"............................................. 11.08 "Paying Agent".............................................. 2.04 "Registrar"................................................. 2.04 "U.S. Government Obligations"............................... 8.01
Page 8 SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Securities. "indenture security holder" means a Holder or a Securityholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings assigned to them therein. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with accounting principles generally accepted in the United States of America; and (3) words in the singular include the plural, and words in the plural include the singular. ARTICLE 2 THE SECURITIES SECTION 2.01. 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 may be Registered Securities and Unregistered Securities within a Series. The Securities may be subject to such restrictions, and contain such legends, as may be required by United States laws and regulations. Except as provided in or pursuant to Section 2.01, 2.02 or 2.03, all Securities of a Series shall be identical in all respects. Securities of different Series may differ in any respect; provided that all Series of Securities shall be equally and ratably entitled to the benefits of this Indenture. Page 9 SECTION 2.02. Establishment of Terms and Form of Series of Securities. (a) At or prior to the issuance of Securities of any Series, the following shall be established by a Board Resolution, by Company Order or by an indenture supplemental hereto: (1) the title of the Securities of the Series (which title shall distinguish the Securities of the Series from the Securities of all other Series and from all other securities issued by the Company); (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 2.08, 2.09, 2.12, 3.06 or 9.04); (3) the date or dates on which the principal of the Securities of the Series is payable or whether the Securities of a Series are due upon demand by the Holder; (4) the rate or rates at which the Securities of the Series shall bear interest, if any, or the method of calculating such rate or rates of interest, the date or dates from which such interest shall accrue, the dates on which such interest shall be payable and, with respect to Registered Securities, the record date for the interest payable on any interest payment date and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months; (5) the place or places where the principal of and interest on Registered Securities and Unregistered Securities, if any, 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 upon the happening of a specified event or at the option of a Holder thereof and the 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 in other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the Series shall be issuable; (9) 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 6.02; Page 10 (10) whether Securities of the Series shall be issuable as Registered Securities (and, if so, whether such Securities shall be issuable as Registered Global Securities), or Unregistered Securities (with or without interest coupons), or both, and any restrictions applicable to the offering, sale or delivery of Unregistered Securities and whether, and the terms upon which, Unregistered Securities of a Series may be exchanged for Registered Securities of the same Series and vice versa; (11) whether and under what circumstances the Company will pay additional amounts on the Securities of that Series held by a person who is not a U.S. person in respect of taxes or similar charges withheld or deducted and, if so, whether the Company will have the option to redeem such Securities rather than pay such additional amounts; (12) the form of the Securities (or forms thereof if Unregistered Securities and Registered Securities shall be issuable in such Series), including such legends as may be required by United States laws or regulations, the form of any coupons or temporary Security which may be issued and the forms of any certificates which may be required hereunder or under United States laws or regulations in connection with the offering, sale, delivery or exchange of Unregistered Securities; (13) the currency or currencies, including composite currencies, in which payment of the principal of and interest on the Securities of the Series shall be payable (if other than the currency of the United States); (14) if the amount or payments of principal of 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; (15) whether Securities of the Series are issuable as, or exchangeable for, one or more Registered Global Securities and, in such case, the terms upon which interests in such Registered Global Security or Registered Global Securities shall be exchangeable by the Company or the Holder thereof for definitive Securities; (16) any other terms of the Series (which terms shall not be inconsistent with the provisions of this Indenture), including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that Series; (17) any Depositaries with respect to the Securities of such Series; and (18) applicable CUSIP numbers. (b) If the terms and form or forms of any Securities are established by or pursuant to a Board Resolution, the Company shall deliver a copy of such Board Resolution to the Trustee at or prior to the issuance of such Securities with the form or forms of Security which have been approved attached thereto. If a Board Resolution authorized Officers to approve the terms and form or forms of the Securities, the Company shall deliver a copy of such Board Resolution and an Officers' Certificate approving the terms and form or forms of Security with such form or forms of Securities attached thereto. Page 11 (c) All Securities of any one Series need not be issued at the same time, and unless otherwise provided, a Series may be reopened for issuances of additional Securities of such Series. (d) Unregistered Securities and their coupons must have the following statement on their face: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Section 165(j) and 1287 of the Internal Revenue Code of 1986, as amended." SECTION 2.03. Execution, Authentication and Delivery. (a) Securities shall be executed on behalf of the Company by its Chief Executive Officer, President or a Vice-President, and its Chief Financial Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary. Signatures shall be manual or facsimile. A facsimile of the Company's seal shall be reproduced on the Securities and may, but need not, be attested. The coupons of Unregistered Securities shall bear the facsimile signature of the Treasurer or an Assistant Treasurer of the Company. (b) If an Officer, an Assistant Treasurer or an Assistant Secretary of the Company whose signature is on a Security or coupon no longer holds that office at the time the Security is authenticated, the Security or coupon shall be valid nevertheless. (c) A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent and no coupon shall be valid until the Security to which it appertains has been so authenticated. Such signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Each Registered Security shall be dated the date of its authentication, and each Unregistered Security shall be dated as provided in connection with the establishment of the Series thereof. (d) The Trustee or an authenticating agent shall at any time, and from time to time, authenticate and deliver Securities of any Series executed and delivered by the Company for original issue in an aggregate principal amount not in excess of the principal amount authorized for such Series upon receipt by the Trustee of (i) a Company Order for the authentication and delivery of such Securities, (ii) if the terms and form or forms of the Securities of such Series have been established by or pursuant to a Board Resolution as permitted by Section 2.02, a copy of such Board Resolution and any Officers' Certificate that may be required pursuant to Section 2.02(b) or an executed supplemental indenture, if any; (iii) an Officers' Certificate delivered in accordance with Section 11.05, and (iv) an Opinion of Counsel to the effect that: (1) if the form or forms and terms of a particular issue of such Securities of such Series have been established by a supplemental indenture, Board Resolution or Company Order as permitted by Section 2.02, that such form or forms and terms have been established in conformity with the provisions of this Indenture; (2) if the terms of a particular issue of Securities of that Series have been or are to be established by or pursuant to a supplemental indenture, Board Resolution or Company Order as permitted by Section 2.02, that upon delivery of such supplemental indenture, Board Resolution or Company Order such form or forms and terms will have been established in conformity with the provisions of this Indenture; and Page 12 (3) such Securities, when authenticated and delivered by the Trustee or an authenticating agent and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company entitled to the benefits of this Indenture. If the terms and form or forms of such Securities have been established by or pursuant to a supplemental indenture, Board Resolution or Company Order as permitted by Section 2.02, the Trustee or an authenticating agent shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will materially and adversely affect the Trustee's own rights, duties or immunities under the Securities and this Indenture. Notwithstanding the foregoing, until the Company has delivered an Opinion of Counsel to the Trustee and the Registrar stating that, as a result of the action described, the Company would not suffer adverse consequences under the provisions of United States law or regulations in effect at the time of the delivery of Unregistered Securities, (i) delivery of Unregistered Securities by the Trustee or Registrar will be made only outside the United States and its possessions and (ii) Unregistered Securities will be released by the Trustee or Registrar in definitive form to the person entitled to physical delivery thereof only upon presentation of a certificate in the form prescribed by the Company. (e) The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, any Company Order or supplemental indenture pursuant to Section 2.02 or in any additional Board Resolution, Company Order or supplemental indenture which shall reopen a Series of Securities pursuant to Section 2.02. (f) The Trustee may appoint an authenticating agent or agents to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent or agents. An authenticating agent has the same rights as an Agent to deal with the Company or any Affiliate. The term "authenticating agent" includes any co-authenticating agent. If it shall be established pursuant to Section 2.02 that the Securities of a Series are to be issued in the form of one or more Registered Global Securities, then the Company shall execute and the Trustee or an authenticating agent shall, in accordance with this Section and Section 2.02 with respect to such Series, authenticate and deliver one or more Registered Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such Series issued and not yet cancelled, having identical terms, (ii) shall be registered in the name of the Depositary for such Registered Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions and (iv) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the nominee of the 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 Depositary or a nominee of such successor Depositary." Page 13 Each Depositary designated pursuant to Section 2.02 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. SECTION 2.04. Registrar and Paying Agent. The Company shall designate an office or agency where Registered Securities may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where (subject to Sections 2.05(c) and 2.08(b)) Securities may be presented for payment or for exchange ("Paying Agent"). With respect to a Series of any Securities issued in whole or in part as Unregistered Securities, the Company shall maintain one or more Paying Agents which shall be acceptable to the Trustee (such acceptance shall not be unreasonably withheld) located outside the United States and its possessions to which the Unregistered Securities or coupons appertaining thereto may be presented for payment and will provide the necessary funds therefor to such Paying Agent upon reasonable notice. The Registrar shall keep a register with respect to each Series of Securities issued in whole or in part as Registered Securities and as to their transfer and exchange. The Company may appoint one or more co-Registrars acceptable to the Trustee and one or more additional Paying Agents for each Series of Securities and the Company may terminate the appointment of any co-Registrar or Paying Agent at any time upon notice. The term "Registrar" includes any co-Registrar. The term "Paying Agent" includes any additional Paying Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar or Paying Agent, the Trustee or one or more agents designated by the Trustee shall act as such. SECTION 2.05. Payment on Securities. (a) Subject to the following provisions, the Company will pay to the Trustee or any Paying Agent the amounts, in such coin or currency as is at the time legal tender for the payment of public or private debt, in the manner, at the times and for the purposes set forth herein and in the text of the Securities for each Series, and the Company hereby authorizes and directs the Trustee or such Paying Agent from funds so paid to it to make or cause to be made payment of the principal of and interest, if any, on the Securities and coupons on each Series as set forth herein and in the text of such Securities and coupons. Except as otherwise provided with respect to any Series of Securities, the Trustee will arrange directly with any Paying Agents for the payment, or the Trustee will make payment, from funds furnished by the Company, of the principal of and interest, if any, on the Securities and coupons of each Series by wire transfer or check drawn upon a bank specified by the Company and acceptable to the Trustee. (b) Interest, if any, on Registered Securities of a Series shall be paid on each interest payment date for such Series to the Holder thereof at the close of business on the relevant record dates specified in the Securities of such Series. The Company may pay such interest by check mailed to such Holder's address as it appears on the register for Securities of such Series. Principal of Registered Securities shall be payable only against presentation and surrender thereof at the office of the Paying Agent, unless the Company shall have otherwise instructed the Trustee in writing. (c) To the extent provided in the Securities of a Series, (i) interest, if any, on Unregistered Securities shall be paid only against presentation and surrender of the coupons for such interest installments as are Page 14 evidenced thereby as they mature and (ii) original issue discount (as defined in Section 1273 of the Internal Revenue Code of 1986, as amended), if any, on Unregistered Securities shall be paid only against presentation and surrender of such Securities; in either case at the office of a Paying Agent located outside of the United States and its possessions, unless the Company shall have otherwise instructed the Trustee in writing. Principal of Unregistered Securities shall be paid only against presentation and surrender thereof as provided in the Securities of a Series. If at the time a payment of principal of or interest, if any, or original issue discount, if any, on an Unregistered Security or coupon shall become due, the payment of the full amount so payable at the office or offices of all the Paying Agents outside the United States and its possessions is illegal or effectively precluded because of the imposition of exchange controls or other similar restrictions on the payment of such amount in the United States currency, then the Company may instruct the Trustee in writing to make such payments at the office of a Paying Agent located in the United States, provided that the Company has determined that provision for such payment in the United States would not cause such Unregistered Security to be treated as a "registration-required obligation" under United States law and regulations. Unless otherwise instructed by the Company, no payments of interest, original issue discounts, or principal with respect to Unregistered Securities shall be made by a Paying Agent (i) by a transfer of funds into an account maintained by the payee in the United States, (ii) mailed to an address in the United States or (iii) paid to a United States address by electronic funds transfer. SECTION 2.06. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent for any Series of Securities other than the Trustee to agree in writing that it will hold all sums held by it for the payment of principal of and interest on Securities of that Series in trust for the benefit of the persons entitled thereto until such sums are paid to such persons or otherwise disposed of as herein provided, and that the Paying Agent will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. If the Company acts as Paying Agent, it shall segregate the money held by it for the payment of principal of and interest on any Series of Securities and hold such money as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon so doing the Paying Agent shall have no further liability for the money so paid. SECTION 2.07. Securityholder Lists; Ownership of Securities. (a) The Trustee shall preserve the most recent list received by or furnished to it of the names and addresses of Holders of each Series of Securities. If the Trustee is not the Registrar or if Unregistered Securities are outstanding under the Indenture, the Company shall furnish to the Trustee on or before each interest payment date, and at such other times as the Trustee may request in writing, a list, in such form and as of such date as the Trustee may reasonably require, containing all the information in the possession or control of the Registrar, any co-Registrar, the Company or any of its Paying Agents other than the Trustee as to the names and addresses of Holders of Securities. (b) Ownership of Registered Securities of a Series shall be proved by the register for such Series kept by the Registrar. Ownership of Unregistered Securities may be proved by the production of such Unregistered Securities or by a certificate or affidavit executed by the person holding such Unregistered Securities or by a depository with whom such Unregistered Securities were deposited, if the certificate or affidavit is satisfactory to the Trustee. The Page 15 Company, the Trustee, and any agent of the Company or the Trustee may treat the bearer of any Unregistered Security or coupon and the person in whose name a Registered Security is registered as the absolute owner thereof for all purposes. SECTION 2.08. Transfer and Exchange. (a) When Registered Securities of a Series are presented to the Registrar with a request to register their transfer or to exchange them for an equal principal amount of Registered Securities of the same Series (containing identical terms and provisions and date of maturity) of other authorized denominations, the Registrar shall register the transfer or make the exchange upon receipt of a written instrument of transfer duly executed by the Securityholder or such Securityholder's attorney duly authorized in writing. (b) If both Registered and Unregistered Securities are authorized for a Series of Securities and the terms of such Securities permit, Unregistered Securities may be exchanged for an equal principal amount of Registered Securities or Unregistered Securities (containing identical terms and provisions) of the same Series and date of maturity in any authorized denominations upon delivery to the Registrar (or a Paying Agent, if the exchange is for Unregistered Securities) of the Unregistered Security with all unmatured coupons and all matured coupons in default appertaining thereto and if all other requirements of the Registrar (or such Paying Agent) and of such Securities for such exchange are met. Notwithstanding the foregoing, the exchange of Unregistered Securities for Registered Securities will be subject to the satisfaction of the provisions of United States law and regulations in effect at the time of such exchange, and no exchange will be made until the Company has notified the Trustee and the Registrar in writing that, as a result of such exchange, the Company would not suffer adverse consequences under such provisions of United States law or regulations. (c) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities upon surrender of Securities for registration of transfer or for exchange as provided in this Section. The Company will not make any charge for any registration of transfer or exchange but may require the payment by the party requesting such registration of transfer or exchange of a sum sufficient to cover any tax or other governmental charge payable in connection therewith, but not for any exchange pursuant to Section 2.12, 3.06 or 9.04. (d) Neither the Company nor the Registrar shall be required (i) to issue, register the transfer of or exchange Securities of any Series for the period beginning at the opening of business 15 days immediately preceding the selection of any such Securities to be redeemed and ending at the close of business on the day of first publication of the relevant notice of redemption or, if there is no publication, the mailing of the relevant notice of redemption, or (ii) to register the transfer of or exchange Securities selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part. (e) Unregistered Securities or any coupons appertaining thereto shall be transferable by delivery. (f) Notwithstanding any other provision of this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive Page 16 registered form, a Registered Global 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. If at any time the Depositary for any Registered Securities of a Series represented by one or more Registered Global Securities notifies the Company that it is unwilling or unable to continue as Depositary for such Registered Securities or if at any time the Depositary for such Registered Securities shall no longer be eligible under Section 2.03, the Company shall appoint a successor Depositary with respect to such Registered Securities. If a successor Depositary for such Registered Securities is not appointed within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 2.02 that such Registered Securities be represented by one or more Registered Global Securities shall no longer be effective and the Company will execute, and the Trustee or an authenticating agent, upon receipt of an Officers' Certificate for the authentication and delivery of definitive Securities of such Series, will authenticate and deliver, Securities of such Series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities in exchange for such Registered Global Security or Securities. The Company may at any time and in its sole discretion determine that the Registered Securities of any Series issued in the form of one or more Registered Global Securities shall no longer be represented by a Registered Global Security or Securities. In such event the Company will execute, and the Trustee or an authenticating agent, upon receipt of an Officers' Certificate for the authentication and delivery of definitive Securities of such Series, will authenticate and deliver, Securities of such Series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities, in exchange for such Registered Global Security or Securities. If specified by the Company pursuant to Section 2.02 with respect to Securities represented by a Registered Global Security, the Depositary for such Registered Global Security may surrender such Registered Global Security in exchange in whole or in part for Securities of the same Series in definitive registered form on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Trustee or an authenticating agent shall authenticate and deliver, without service charge, (i) to the person specified by such Depositary a new Registered Security or Securities of the same Series, of any authorized denominations as requested by such person, in an aggregate principal amount equal to and in exchange for such person's beneficial interest in the Registered Global Security; and (ii) to such Depositary a new registered Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Registered Global Security and the aggregate principal amount of Registered Securities authenticated and delivered pursuant to clause (i) above. Page 17 Upon the exchange of a Registered Global Security for Securities in definitive registered form, in authorized denominations, such Registered Global Security shall be cancelled by the Trustee. Securities in definitive registered form issued in exchange for a Registered Global Security pursuant to this Section 2.08 shall be registered in such names and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Company or the Trustee. The Trustee or an authenticating agent shall deliver such Securities to or as directed by the persons in whose names such Securities are so registered. SECTION 2.09. Replacement Securities. (a) If a mutilated Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee, the Company shall issue and the Trustee shall authenticate and deliver in exchange therefor a replacement Registered Security, if such surrendered security was a Registered Security, or a replacement Unregistered Security with coupons corresponding to the coupons appertaining to the surrendered Security, if such surrendered Security was an Unregistered Security, of the same Series and containing identical terms and provisions, if the requirements of the Trustee are met. (b) If the Holder of a Security claims that the Security or any coupon appertaining thereto has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Registered Security, if such Holder's claim pertains to a Registered Security, or a replacement Unregistered Security with coupons corresponding to the coupons appertaining to the lost, destroyed or wrongfully taken Unregistered Security or the Unregistered Security to which such lost, destroyed or wrongfully taken coupon appertains, if such Holders' claim pertains to an Unregistered Security, of the same Series and containing identical terms and conditions, if the requirements of the Trustee are met; provided, however, that the Trustee or the Company may require such Holder to provide to the Trustee and the Company security or indemnity sufficient in the judgement of the Company and the Trustee to protect the Company, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Security or any coupon appertaining thereto is replaced. The Company may charge the party requesting a replacement Security for its expenses in replacing a Security. (c) Every replacement Security is an additional obligation of the Company. (d) The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons. SECTION 2.10. Outstanding Securities. (a) Securities outstanding at any time are all Securities authenticated by the Trustee or any other authenticating agent except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. (b) If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a protected purchaser. (c) If a Paying Agent (other than the Company) holds on a redemption date or maturity date money sufficient to pay all amounts due on Securities of Page 18 any Series on that date, then on and after that date all Securities of such Series due on such date cease to be outstanding and interest on them ceases to accrue. (d) A Security does not cease to be outstanding because the Company or an Affiliate holds the Security. (e) In determining whether the Holders of the requisite principal amount of outstanding Securities of any Series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or whether sufficient funds are available for redemption or for any other purpose, the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02. (f) No Securities in respect of which deposits have been made pursuant to Section 8.01(a) shall be deemed to be outstanding. SECTION 2.11. Treasury Securities. In determining whether the Holders of the requisite principal amount of Securities of any Series have concurred in any direction, waiver or consent, Securities of such Series owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities of such Series which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Securities of such Series owned by the Company which have been pledged in good faith may be considered by the Trustee, if the pledgee establishes to the satisfaction of the Trustee the pledgee's right to so act with respect to such Securities and that the pledgee is not the Company or an Affiliate. SECTION 2.12. Temporary Securities. (a) Until definitive Registered Securities of any Series are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate temporary Registered Securities of such Series. Temporary Registered Securities of any Series shall be substantially in the form of definitive Registered Securities of such Series but may have variations that the Company considers appropriate for temporary Securities. Every temporary Registered Security shall be executed by the Company and authenticated by the Trustee, and registered by the Registrar, upon the same conditions, and with like effect, as a definitive Registered Security. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Registered Securities of the same Series and date of maturity in exchange for temporary Registered Securities. (b) Until definitive Unregistered Securities of any Series are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate one or more temporary Unregistered Securities, which may have coupons attached or which may be in the form of a single temporary global Unregistered Security of that Series. The temporary Unregistered Security or Securities of any Series shall be substantially in the form of definitive Unregistered Securities of such Series but may have variations that the Company considers appropriate for temporary Securities and shall be delivered to one of the Paying Agents located outside the United States and its possessions or to such other person or persons as the Company shall direct against such certification as the Company may from time to time prescribe. The temporary Page 19 Unregistered Security or Securities of a Series shall be executed by the Company and authenticated by the Trustee upon the same conditions, and with like effect, as a definitive Unregistered Security of such Series, except as provided herein or in the Company Order, Board Resolution or supplemental indenture relating thereto. A temporary Unregistered Security or Securities shall be exchangeable for definitive Unregistered Securities at the time and on the conditions, if any, specified in the temporary Security. Upon any exchange of a part of a temporary Unregistered Security of a Series for definitive Unregistered Securities of such Series, the temporary Unregistered Security shall be endorsed by the Trustee or an authenticating agent for the Trustee to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of the definitive Unregistered Securities of such Series so exchanged and endorsed. SECTION 2.13. Cancellation. The Company at any time may deliver Securities and coupons to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities and coupons surrendered to them for registration of transfer, for exchange or for payment. The Trustee shall cancel all Securities and coupons surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of cancelled Securities and coupons in its customary manner; provided, however, that any Unregistered Securities of a Series delivered to the Trustee for exchange prior to maturity shall be retained by the Trustee for reissue as provided herein or in the Securities of such Series. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for cancellation. SECTION 2.14. Defaulted Interest. If the Company defaults on a payment of interest on a Series of Securities, the Company shall pay the defaulted interest as provided in such Securities or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed and acceptable to the Trustee. With respect to Registered Securities, the Trustee may pay the defaulted interest, plus any interest payable on the defaulted interest, to the Holders of such Registered Securities on a subsequent special record date. The Company shall fix the record date and the payment date. At least 15 days before the record date the Company shall mail to such Holders a notice that states the record date, the payment date and the amount of interest to be paid. SECTION 2.15 CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. Page 20 ARTICLE 3 REDEMPTION SECTION 3.01. Notice to Trustee. The Company may, with respect to any Series of Securities, reserve the right to redeem and pay such Series of Securities or any part thereof, or may covenant to redeem and pay the Series of Securities or any part thereof, before maturity at such time and on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee of the redemption date and the principal amount of the Series of Securities to be redeemed. The Company shall give such notice at least 60 days before the redemption date (or such shorter notice as may be acceptable to the Trustee). SECTION 3.02. Selection of Securities to be Redeemed. If less than all the Securities of a Series with the same issue date, interest rate and stated maturity are to be redeemed, the Trustee, not more than 60 days prior to the redemption date, shall select the Securities of the Series to be redeemed pro rata or by lot or in such other manner as the Company shall direct. The Trustee shall make the selection from Securities of the Series that are outstanding and that have not previously been called for redemption. Securities of the Series and portions of them selected by the Trustee shall be in amounts of $1,000 or integral multiples of $1,000 or with respect to Securities of any Series issuable in other denominations pursuant to Section 2.02(a)(8), in amounts equal to the minimum principal denomination for each such Series and in integral multiples thereof. Provisions of this Indenture that apply to Securities of that Series called for redemption also apply to portions of Securities of that Series called for redemption. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption. SECTION 3.03. Notice of Redemption. (a) At least 30 days but not more than 90 days before a redemption date, unless a shorter period is specified in the Securities to be redeemed, the Company shall mail a notice of redemption by first-class mail to each Holder of Registered Securities that are to be redeemed. (b) If Unregistered Securities are to be redeemed, notice of redemption shall be published in an Authorized Newspaper in each of The City of New York, London and, if such Securities to be redeemed are listed on the Luxembourg Stock Exchange, Luxembourg twice in different calendar weeks, the first publication to be not less than 30 nor more than 90 days before the redemption date. (c) All notices shall identify the Series of Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if less than all the outstanding Securities of a Series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed, including CUSIP numbers; (4) the name and address of the Paying Agent; (5) that the Securities of the Series called for redemption and all unmatured coupons, if any, appertaining thereto must be surrendered to the Paying Agent to collect the redemption price; Page 21 (6) that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date; and (7) if the redemption is pursuant to a mandatory or optional sinking fund payment. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed or published, Securities of a Series called for redemption become due and payable on the redemption date at the redemption price. Upon surrender to the Paying Agent of such Securities, together with all unmatured coupons, if any, appertaining thereto, such Securities shall be paid at the redemption price plus accrued interest to the redemption date, but installments of interest due on or prior to the redemption date will be payable, in the case of Unregistered Securities, to the bearers of the coupons for such interest upon surrender thereof and, in the case of Registered Securities, to the Holders of such Securities of record at the close of business on the relevant record dates. SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New York time, on the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and interest accrued to the redemption date on all Securities to be redeemed on that date. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder of that Security a new Security or Securities of the same Series, the same form and the same maturity in authorized denominations equal in aggregate principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities. The Company shall pay or cause to be paid the principal of and interest on the Securities on the dates and in the manner provided herein and in the Securities. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date immediately available funds designated for and sufficient to pay the installment. The Company shall pay interest on overdue principal of a Security of any Series at the rate of interest (or, in the case of Original Issue Discount Securities, Yield to Maturity) borne by the Securities of that Series, and, to the extent lawful, it shall pay interest on overdue installments of interest at the same rate. SECTION 4.02. Lien on Assets. If at any time the Company mortgages, pledges or otherwise subjects to any lien the whole or any part of any property or assets now owned or hereafter acquired by it, except as hereinafter provided in this Section 4.02, the Company Page 22 will secure the outstanding Securities, and any other obligations of the Company which may then be outstanding and entitled to the benefit of a covenant similar in effect to this covenant, equally and ratably with the indebtedness or obligations secured by such mortgage, pledge or lien, for as long as any such indebtedness or obligation is so secured. The foregoing covenant does not apply to (1) the creation, extension, renewal or refunding of purchase-money mortgages or liens, or (2) to the making of any deposit or pledge to obtain the benefits of any law relating to workers' compensation, unemployment insurance, old age pensions or other social security, or (3) with any court, board, commission or governmental agency as security incident to the proper conduct of any proceeding before it or (4) any liens on the Company's property or assets that arise solely as a result of a merger of an entity that has existing liens on its property or assets with or into the Company. Nothing contained in this Indenture prevents an Affiliate of the Company from mortgaging, pledging or subjecting to any lien any property or assets, whether or not acquired by such Affiliate from the Company. SECTION 4.03. Reports by the Company. The Company agrees: (a) to file with the Trustee, within 15 days after the Company is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Company may be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). (b) To the extent required by the Trust Indenture Act of 1939 as to the Securities of any Series, the Company will annually furnish to the Trustee on or before the date the Company is required to file its annual report with the Trustee pursuant to Section 4.03(a) a brief certificate (which need not comply with Section 11.06) from the principal executive, financial or accounting officer of the Company as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture). (c) The Company shall deliver to the Trustee, as soon as possible and in any event within five days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers' Certificate setting forth the details of such Event of Default or default and the action which the company proposes to take with respect thereto. SECTION 4.04. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time. Page 23 ARTICLE 5 SUCCESSORS SECTION 5.01. When the Company May Merge, etc. The Company may not consolidate with, merge into or be merged into, or transfer or lease its properties and assets substantially as an entirety to, any person, unless (i) the surviving person is a corporation organized under the laws of the United States, any State thereof or the District of Columbia, (ii) the surviving person, if other than the Company, assumes by supplemental indenture all the obligations of the Company under the Securities and any coupons appertaining thereto and under this Indenture and, (iii) after giving effect thereto, no Default or Event of Default shall have occurred and be continuing. The surviving, transferee or lessee corporation shall be the successor to the Company and the Company, except in the case of a lease, shall be relieved of all obligations under this Indenture and the Securities. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. An "Event of Default" occurs with respect to the Securities of any Series if: (1) the Company defaults in the payment of interest on any Security of that Series when the same becomes due and payable and the Default continues for a period of 90 days; (2) the Company defaults in the payment of the principal of any Security of that Series when the same becomes due and payable at maturity, upon redemption or otherwise; (3) the Company fails to comply with any of its other agreements in the Securities of that Series, or in any supplemental indenture under which the Securities of that Series may have been issued or in this Indenture (other than an agreement included solely for the benefit of a Series of Securities other than that Series) and the Default continues for the period and after the notice specified below; (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors, or (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: Page 24 (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the Company or for all or substantially all of its property, or (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A Default under clause (3) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of all the outstanding Securities of that Series notify the Company (and the Trustee in the case of notification by such Holders) of the Default and the Company does not cure the Default within 90 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. Acceleration. If an Event of Default occurs with respect to the Securities of any Series and is continuing, the Trustee, by notice to the Company, or the Holders of at least 25% in principal amount of all of the outstanding Securities of that Series, by notice to the Company and the Trustee, may declare the principal (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 if that Series) of, and any accrued interest on, all the Securities of that Series to be due and payable. Upon such declaration, such principal (or, in the case of Original Issue Discount Securities, such specified amount) and any accrued interest shall be due and payable immediately. SECTION 6.03. Other Remedies Available to Trustee. (a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of and interest on the Securities of the Series that is in Default or to enforce the performance of any provision of the Securities of that Series or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. To the extent permitted by law, all available remedies are cumulative. SECTION 6.04. Waiver of Existing Defaults; Rescission of Acceleration. The Holders of a majority in principal amount of any Series of Securities by notice to the Trustee and the Company may waive an existing Default with respect to that Series and rescind an acceleration under Section 6.02 and its consequences except a Default in the payment of principal of or interest on any Security (other than such as may have become due solely because of the acceleration), provided such waiver or rescission would not conflict with any judgment or decree. SECTION 6.05. Control by Majority. (a) The Holders of a majority in principal amount of the Securities of Page 25 each Series affected (with each such Series voting as a class) may 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 it with respect to Securities of that Series. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture. (b) With respect to the Securities of any Series all or part of which is represented by a Registered Global Security, the following provision shall apply. Upon receipt by the Trustee of (i) any written notice directing the time, method or place of conducting any proceeding or exercising any trust or power pursuant to Section 6.06 with respect to Securities of any Series or (ii) any written demand, request or notice with respect to any matter on which the Holders of any Series of Securities are entitled to act under this Indenture, a record date shall be established for determining Holders of outstanding Securities of such Series entitled to join in such notice, demand or request, which record date shall be at the close of business on the day the Trustee receives such notice, demand or request. The Holders on such record date, or their duly designated proxies, and only such persons, shall be entitled to join in such notice, demand or request, whether or not such Holders remain Holders after such record date; provided, however, that unless the Holders of the requisite principal amount of the outstanding Securities of such Series shall have joined in such notice, demand or request prior to the day which is the 90th day after such record date, such notice, demand or request shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, (A) after expiration of such 90-day period, a new notice, demand or request identical to a notice, demand or request which has been cancelled pursuant to the proviso to the preceding sentence or (B) during any such 90-day period, a new notice, demand or request contrary to or different from such notice, demand or request, in either of which events a new record date shall be established pursuant to the provisions of this subsection. SECTION 6.06. Limitation on Suits by Securityholders. A Securityholder may pursue a remedy with respect to this Indenture or the Securities of any Series only if: (1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to Securities of that Series; (2) the Holders of at least 25% in principal amount of the Securities of that Series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense to be, or which may be, incurred by the Trustee in pursuing the remedy; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period, the Holders of a majority in principal amount of the Securities of that Series do not give the Trustee a direction inconsistent with the request. SECTION 6.07. Rights of Holders to Receive Payment. Page 26 Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of the principal of and interest on a Security, on or after the respective due dates expressed in the Security, and the right of any Holder of a coupon to receive payment of interest due as provided in such coupon, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suits by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs with respect to Securities of any Series and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of the principal of and interest on Securities of that Series remaining unpaid. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relating to the Company, its creditors or its property. SECTION 6.10. Priorities. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to Holders of Securities in respect of which or for the benefit of which such money has been collected for amounts due and unpaid on such Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and Third: to the Company. The Trustee may fix a record date (with respect to Registered Securities) and payment date for any payment to Holders of Securities pursuant to this Article. SECTION 6.11. Undertaking for Costs. 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 or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Company, the Trustee, a Holder pursuant to Section 6.07 or a Holder or Holders of more than 10% in principal amount of the Securities of any Series. Page 27 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of its rights and powers vested in it under 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. (b) Except during the continuance of Event of Default: (1) The Trustee need perform only those duties that 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 conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, with respect to certificates or opinions specifically required to be provided to the Trustee hereunder, the Trustee shall examine the certificates and opinions to determine whether or not they substantially conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section. (2) The Trustees shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (4) The Trustee shall not be required to take notice or be deemed to have notice of any Default hereunder with respect to any Series, except failure by the Company to cause to be made any of the payments to the Trustee required to be made hereunder, unless the Trustee shall be notified in writing of such Default by the Company or by the holders of 25% in aggregate principal amount of Securities of such Series then outstanding or unless a Responsible Officer of the Trustee shall have actual knowledge of such Default. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power hereunder unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it (and shall not be obligated to invest such money) except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. Page 28 (g) 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. This Section 7.01 is in furtherance of and subject to Sections 315 and 316 of the TIA. SECTION 7.02. Rights of Trustee. In furtherance of and subject to Sections 315 and 316 of the TIA, and except as otherwise provided in Section 7.01: (a) The Trustee may conclusively rely and shall be protected in acting or refraining from acting upon on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in any document. (b) Before the Trustee acts or refrains from acting, it may consult with counsel of its own selection or require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on a Board Resolution, an Officers' Certificate, a Company Order, an Opinion of Counsel or the written advice of counsel. (c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (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 security or indemnity satisfactory to the Trustee 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 discretion, 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 reasonable to such inquiry or investigation, during normal business hours, personally or by agent or attorney and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (g) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and Page 29 (h) The Trustee may request that the Company deliver an Officers' Certificate setting for the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any agent may do the same with like rights. SECTION 7.04. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, shall not be accountable for the Company's use of the proceeds from the Securities and shall not be responsible for any statement in the Securities (other than its certificate of authentication if it shall authenticate the Securities). SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing with respect to the Securities of any Series and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to each Holder of a Security of that Series entitled to receive reports pursuant to the TIA (and, if Unregistered Securities of that Series are outstanding, shall cause to be published at least once in Authorized Newspaper in each of The City of New York, London and, if Securities of that Series are listed on the Luxembourg Stock Exchange, Luxembourg) notice of the Default within 90 days after it occurs, unless such Default shall have been cured or waived. Except in the case of a Default in payment on the Securities of any Series, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding such notice is in the interests of Securityholders of that Series. SECTION 7.06. Reports by Trustee to Holders. (a) To the extent required by TIA Section 313(a), on May 15 each year, commencing on May 15, 2002, the Trustee shall mail to each Securityholder of each Series entitled to receive reports pursuant to the TIA a brief report, dated as of such date, that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). (b) At the time that it mails such a report to Securityholders of any Series, the Trustee shall file a copy of that report with the SEC and with each stock exchange on which the Securities of that Series are listed. The Company shall provide written notice to the Trustee when the Securities of any Series are listed on any stock exchange or delisted therefrom. SECTION 7.07. Compensation and Indemnity. (a) The Company shall pay to the Trustee from time to time such compensation for its services as the Company and the Trustee shall from time to time agree in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it in connection with the performance of its duties under this Indenture. Such expenses shall include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. Page 30 (b) The Company shall indemnify the Trustee and hold it harmless against any and all loss, claims, damage, expense or liability incurred by it arising out of or in connection with its acceptance or administration of the trust or trusts hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity; provided, however, that the failure of the Trustee to so notify the Company of any claim of which a Responsible Officer of the Trustee has knowledge shall not relieve the Company of its obligations to indemnify the Trustee, except to the extent the Company has been materially prejudiced by such failure. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. (c) The Company need not reimburse any expense or indemnify against any loss or liability determined to have been caused by the Trustee through its own negligence or willful misconduct. (d) To secure the payment obligations of the Company pursuant to this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities of a Series. (e) If the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(4) or (5) occurs, such expenses and the compensation for such services shall constitute expenses of administration under any Bankruptcy Law. (f) The provisions of this Section shall survive the termination of this Indenture and the resignation or removal of the Trustee. SECTION 7.08. Replacement of Trustee. (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. (b) The Trustee may resign with respect to the Securities of any Series by so notifying the Company. The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with respect to Securities of any Series if: (1) the Trustee fails to comply with Section 7.10 hereof or Section 310(b) of the TIA; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason with respect to Securities of any Series, the Company shall promptly appoint a successor Trustee for such Series. Within one year after a successor Trustee with respect to the Securities of Page 31 any Series takes office, the Holders of a majority in principal amount of Securities of that Series may appoint a successor Trustee with respect to the Securities of that Series to replace the successor Trustee appointed by the Company. (d) If a successor Trustee with respect to the Securities of any Series does not take office within 60 days after the retiring Trustee provides written notice of its resignation pursuant to subsection (b) above or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the Securities of the applicable Series may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such Series. (e) If the Trustee with respect to the Securities of any Series fails to comply with Section 7.10 hereof or Section 310(b) of the TIA, any Securityholder of the applicable Series may petition any court of competent jurisdiction for the removal of such Trustee and the appointment of a successor Trustee. (f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee for any Series of Securities shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to all Series of Securities for which the successor Trustee is to be acting as Trustee under this Indenture. The retiring Trustee shall promptly upon payment of amounts due it hereunder transfer all property held by it as Trustee with respect to such Series of Securities to the successor Trustee subject to the lien provided for in Section 7.07. The Company shall give notice of each appointment of a successor Trustee for any Series of Securities by mailing written notice of such event by first-class mail to the Holders of Securities of such Series entitled to receive reports pursuant to the TIA and, if any Unregistered Securities are outstanding, by publishing notice of such event once in an Authorized Newspaper in each of The City of New York, London, and, if Securities of that Series are listed on the Luxembourg Stock Exchange, Luxembourg. (g) All provisions of this Section 7.08 except subparagraphs (b)(1), (e) and (h) and the words "subject to the lien provided for in Section 7.07" in subparagraph (f) shall apply also to any Paying Agent located outside the United States as required by Section 2.04 (h) 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 such successor Trustee shall execute and deliver a supplemental indenture wherein such 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, such 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 Series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall Page 32 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 and 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. SECTION 7.09. Successor Trustee, Agents by Merger, etc. If the Trustee or any Agent consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business assets to, another corporation, the successor corporation, without any further act, shall be the successor Trustee or Agent, as the case may be. SECTION 7.10. Eligibility This Indenture shall always have a Trustee with respect to such Series of Securities which satisfies the requirements of TIA Section 310(a)(1). The Trustee shall always have a combined capital and surplus of at least $100,000,000, as set forth in its most recent published annual report of condition. ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. Termination of the Company's Obligations. (a) The Company reserves the right to terminate all of its obligations under (i) this Indenture and the Securities, or (ii) the Securities of any Series, if the Company irrevocably deposits in trust with the Trustee money in an amount and in the currency in which Securities of such Series are denominated, or in the event of dollar-denominated Securities, U.S. Government Obligations sufficient to pay, when due, the principal of and any interest on all the Securities or all the Securities of that Series, as the case may be, to maturity or redemption (together with irrevocable instructions to the Trustee requiring redemption at the earliest possible redemption date, if any, in accordance with Article 3) and if all other conditions set forth in the Securities of that Series are met. However, the Company's obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 7.07, 7.08, 8.03 and 8.04 shall survive until the Securities are no longer outstanding. Thereafter the Company's obligations in Section 7.07, 8.03 and 8.04 shall survive. (b) Before or after a deposit the Company shall make arrangements satisfactory to the Trustee for the redemption of Securities at the earliest possible redemption date, if any, in accordance with Article 3. (c) After a deposit by the Company in accordance with this Section in respect to the Securities of a Series, the Trustee upon written request of the Company shall acknowledge in writing the discharge of the Company's obligations under the Securities of the Series in respect of which the deposit has been made and this Indenture with respect to the Securities of that Series except for those surviving obligations specified above. (d) In order to have money available on a payment date to pay principal of and interest on the Securities of any Series, the U.S. Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money; however, such U.S. Government Obligations shall not be callable at the issuer's option. Page 33 (e) "U.S. Government Obligations" means: (i) direct obligations of the United States for the payment of which the full faith and credit of the United States are pledged; or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentally of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States. SECTION 8.02. Application of Trust Money. The Trustee shall hold in trust all money or U.S. Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities of each Series in respect of which the deposit shall have been made. SECTION 8.03. Repayment to the Company. (a) The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. (b) If permitted under applicable law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years after such principal or interest became due. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. SECTION 8.04. Indemnity for Government Obligations. The Company shall pay and shall indemnify the Trustee and each Securityholder of each Series in respect of which the deposit shall have been made against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such obligations. ARTICLE 9 AMENDMENTS AND WAIVERS SECTION 9.01. Without Consent of Holders The Company and the Trustee may enter into one or more supplemental indentures without consent of any Securityholder for any of the following purposes: (1) to cure any ambiguity, defect or inconsistency herein or in the Securities of any Series; (2) to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as provided in Section 2.02, and to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any Series Securities; (3) to secure the Securities pursuant to Section 4.02; Page 34 (4) to comply with Section 5.01; (5) to provide for uncertificated Securities in addition to or in place of certificated Securities outstanding; (6) to add to the rights of the Holders of any Series of Securities or to surrender any right or power herein conferred on the Company; or (7) to make any change that does not adversely affect the rights of any Securityholder. SECTION 9.02. With Consent of Holders. (a) With the written consent of the Holders of a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture (with each Series voting as a class), the Company and the Trustee may enter into a supplemental indenture to add any provisions to or to change or eliminate any provisions of this Indenture or of any supplemental indenture or to modify, in each case in any manner not covered by Section 9.01, the rights of the Securityholders of each such Series. The Holders of a majority in principal amount of the outstanding Securities of each Series affected by such waiver (with each Series voting as a class), by notice to the Trustee, may waive compliance by the Company with any provision of this Indenture, any supplemental indenture or the Securities of any such Series except a Default in the payment of the principal of or interest on any Security. However, without the consent of each Securityholder affected, an amendment or waiver may not: (1) reduce the amount of Securities whose Holders must consent to an amendment or waiver; (2) reduce the rate of or change the time for payment of interest on any Security; (3) reduce the principal of or change the fixed maturity of any Security; (4) waive a Default in the payment of the principal of or interest on any Security; (5) make any Security payable in money other than that stated in the Security; or (6) make any change in Section 6.04, 6.07 or 9.02(a) (third sentence). (b) It is not necessary under this Section 9.02 for the Securityholders to consent to the particular form of any proposed supplemental indenture, but it is sufficient if they consent to the substance thereof. (c) Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section 9.02, the Company shall transmit by mail a notice, setting forth in general terms the substance of such supplemental indenture, to all Holders of Registered Securities, as the names and addresses of such Holders appear on the register for each Series of Securities, and to such Holders of Unregistered Securities as are entitled to receive reports pursuant to the TIA. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. Page 35 SECTION 9.03. Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder of each Series affected by such amendment or waiver. SECTION 9.04. Notation on or Exchange of Securities. The Trustee may place an appropriate notation about an amendment or waiver on any Security or any Series thereafter authenticated. The Company in exchange for Securities of that Series may issue and the Trustee shall authenticate new Securities of that Series that reflect the amendment or waiver. SECTION 9.05. Trustee Protected. The Trustee need not sign any supplemental indenture that the Trustee reasonably believes likely to affect its rights or increase its duties or obligations under this Indenture in any material way. 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 shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. ARTICLE 10 SINKING FUNDS SECTION 10.01. 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, permitted or required by any form of Security of such Series issued pursuant to this Indenture. The minimum amount of any sinking fund payment provided for by the terms of Securities of any Series is herein referred to as "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of such Series is herein referred to as in "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 10.02. 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 10.02. Satisfaction of Sinking Fund Payments with Securities. The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such Series to be made pursuant to the terms of such Securities as provided for by the terms of such Series, (1) deliver outstanding Securities of such Series (other than any of such Securities previously called for redemption or any of such Securities in respect of which cash shall have been released to the Company) and (2) apply as a credit Securities of such Series which have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities or through the Page 36 application of permitted optional sinking fund payments pursuant to the terms of such Securities, 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 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. If as a result of the delivery or credit of Securities of any Series in lieu of cash payments pursuant to this Section 10.02, the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment; provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required to be released to the Company. SECTION 10.03. 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 mandatory 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 of Securities of that Series pursuant to Section 10.02, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment. The Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days before each such 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 3.02 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 3.03. Such notice have been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.04, 3.05 and 3.06. ARTICLE 11 MISCELLANEOUS SECTION 11.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA (an "incorporated provision"), the incorporated provision shall control. SECTION 11.01. Notices. (a) Any notice or communication by the Company, any Securityholder or the Trustee to the other is duly given if in writing and delivered in person, mailed by First-class mail, or sent by facsimile: if to the Company to: BellSouth Corporation 1155 Peachtree Street, N.E. Atlanta, Georgia 30309-3610 Attn: Treasurer Page 37 if to the Trustee to: The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Attn: Institutional Trust Services (b) The Company or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications. (c) Any notice or communication to Holder of Securities entitled to receive reports pursuant to the TIA shall be mailed by first-class mail to the addresses for Holders of Registered Securities shown on the register kept by the Registrar and to addresses filed with the Trustee for other Holders. Failure to so mail a notice or communication or any defect in such notice or communication shall not affect its sufficiency with respect to other Holders of Securities of that or any other Series entitled to receive notice. (d) If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. (e) If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and to each Agent at the same time. (f) If it shall be impractical in the opinion of the Trustee or the Company to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall constitute a sufficient publication of such notice. (g) All other notices or communications will be in writing. SECTION 11.03. Acts of Securityholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders 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. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of Unregistered Securities, shall be sufficient for any purpose of this Indenture and 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 the certificate of any 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 an officer of a corporation or a member of a partnership, on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. Page 38 (c) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done 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 11.04. Determination of Voting Rights; Conduct of Meetings. (a) At any meeting of Securityholders, each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Securities held or represented. If any Securities entitled to vote at such meeting are Original Issue Discount Securities, such Holders shall have such votes as are determined by reference to such portion of the principal amount as may be specified in the terms of each such Series which would be due and payable at the time of such meeting. However, no vote shall be cast or counted in respect of any Security which is challenged as not outstanding and ruled to be not outstanding. (b) The Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders and the appointment of proxies in regard thereto. A chairman and secretary of the meeting shall be elected by vote of the Holders of a majority of the votes represented and entitled to vote at the meeting. SECTION 11.05. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, including the execution of an indenture supplemental hereto, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and stating that such proposed action is authorized under and complies with the terms of this Indenture; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and stating that such proposed action is authorized under and complies with the terms of this Indenture. SECTION 11.06. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (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 such person, 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 or not, in the opinion of such person, such condition or covenant has been complied with. Page 39 SECTION 11.07. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series. The Paying Agent or Registrar may make reasonable rules and set reasonable requirements for its functions. SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in Atlanta, Georgia or New York, New York are not required to be open. If a payment date is a Legal Holiday at a place of payment, payment may be made at such place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 11.09. Governing Law. The laws of the State of New York shall govern this Indenture, the Securities and any coupons appertaining thereto. SECTION 11.10. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any Affiliate. No such indenture, loan or debt agreement may be used to interpret this Indenture. SECTION 11.11. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligation of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. SECTION 11.12. Securities in Foreign Currencies. Whenever this Indenture provides for (i) any action by, or the determination of any of the rights of, Holders of Securities of any Series in which some or all of such Securities are denominated in a currency other than U.S. dollars or (ii) any distribution to Holders of Securities, unless otherwise specified as contemplated by Section 2.02 for Securities for such Series, any amount in respect of any Security denominated in a currency other than United States dollars shall be treated for any such action or distribution as that amount of United States dollars that could be obtained for such amount on such reasonable basis of exchange and as of the record date for such action, determination of rights or distribution (or, if there shall be no applicable record date, such other date reasonably proximate to the date or such action, determination of rights or distribution) as the Company may specify in a written notice to the Trustee or, in absence of such written notice, as the Trustee may determine. SECTION 11.13. Currencies. Except as may otherwise be provided in the form of Securities of any particular Series pursuant to the provisions of this Indenture, all references in this Indenture or in the Securities to "dollars," "$" or any similar reference shall be to the currency of the United States of America. SECTION 11.14. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one instrument. Page 40 [SIGNATURE PAGE TO INDENTURE DATED AS OF AUGUST 15, 2001] BELLSOUTH CORPORATION By /s/ Linda S. Harty ----------------------------------- Title Vice President and Treasurer THE CHASE MANHATTAN BANK By /s/ Gregory Shea ------------------------------------- Title Assistant Vice President Page 41 EX-4.B 4 g72203ex4-b.txt INDENTURE DATED AS OF AUGUST 15, 2001 BELLSOUTH CORPORATION and SOUTHTRUST BANK Trustee INDENTURE Dated as of August 15, 2001 Providing for Issuance of Securities in Series Page 1 TABLE OF CONTENTS* ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
Page SECTION 1.01. Definitions............................................... 6 SECTION 1.02. Other Definitions......................................... 8 SECTION 1.03. Incorporation by Reference of Trust Indenture Act......... 9 SECTION 1.04. Rules of Construction..................................... 9 ARTICLE 2 THE SECURITIES SECTION 2.01. Issuable in Series........................................ 9 SECTION 2.02. Establishment of Terms and Form of Series of Securities... 10 SECTION 2.03. Execution, Authentication and Delivery.................... 12 SECTION 2.04. Registrar and Paying Agent................................ 14 SECTION 2.05. Payment on Securities..................................... 14 SECTION 2.06. Paying Agent to Hold Money in Trust....................... 15 SECTION 2.07. Securityholder Lists; Ownership of Securities............. 15 SECTION 2.08. Transfer and Exchange..................................... 16 SECTION 2.09. Replacement Securities.................................... 18 SECTION 2.10. Outstanding Securities.................................... 18 SECTION 2.11. Treasury Securities....................................... 19 SECTION 2.12. Temporary Securities...................................... 19 SECTION 2.13. Cancellation.............................................. 20 SECTION 2.14. Defaulted Interest........................................ 20 SECTION 2.15. CUSIP Numbers............................................. 20 ARTICLE 3 REDEMPTION SECTION 3.01. Notice to Trustee......................................... 20 SECTION 3.02. Selection of Securities to be Redeemed.................... 21 SECTION 3.03. Notice of Redemption...................................... 21 SECTION 3.04. Effect of Notice of Redemption............................ 22 SECTION 3.05. Deposit of Redemption Price............................... 22 SECTION 3.06. Securities Redeemed in Part............................... 22
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Page ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities..................................... 22 SECTION 4.02. Lien on Assets............................................ 22 SECTION 4.03. Reports by the Company.................................... 23 SECTION 4.04. Calculation of Original Issue Discount.................... 23 ARTICLE 5 SUCCESSORS SECTION 5.01. When the Company May Merge, etc........................... 24 ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default......................................... 24 SECTION 6.02. Acceleration.............................................. 25 SECTION 6.03. Other Remedies Available to Trustee....................... 25 SECTION 6.04. Waiver of Existing Defaults; Rescission of Acceleration... 25 SECTION 6.05. Control by Majority....................................... 25 SECTION 6.06. Limitation on Suits by Securityholders.................... 26 SECTION 6.07. Rights of Holders to Receive Payment...................... 26 SECTION 6.08. Collection Suits by Trustee............................... 27 SECTION 6.09. Trustee May File Proofs of Claim.......................... 27 SECTION 6.10. Priorities................................................ 27 SECTION 6.11. Undertaking for Costs..................................... 27 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee......................................... 27 SECTION 7.02. Rights of Trustee......................................... 29 SECTION 7.03. Individual Rights of Trustee.............................. 30 SECTION 7.04. Trustee's Disclaimer...................................... 30 SECTION 7.05. Notice of Defaults........................................ 30 SECTION 7.06. Reports by Trustee to Holders............................. 30 SECTION 7.07. Compensation and Indemnity................................ 30 SECTION 7.08. Replacement of Trustee.................................... 31 SECTION 7.09. Successor Trustee, Agents by Merger, etc.................. 33 SECTION 7.10. Eligibility............................................... 33
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Page ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. Termination of the Company's Obligations.................. 33 SECTION 8.02. Application of Trust Money................................ 34 SECTION 8.03. Repayment to the Company.................................. 34 SECTION 8.04. Indemnity for Government Obligations...................... 34 ARTICLE 9 AMENDMENTS AND WAIVERS SECTION 9.01. Without Consent of Holders................................ 34 SECTION 9.02. With Consent of Holders................................... 35 SECTION 9.03. Revocation and Effect of Consents......................... 35 SECTION 9.04. Notation on or Exchange of Securities..................... 36 SECTION 9.05. Trustee Protected......................................... 36 ARTICLE 10 SINKING FUNDS SECTION 10.01. Applicability of Article.................................. 36 SECTION 10.02. Satisfaction of Sinking Fund Payments with Securities..... 36 SECTION 10.03. Redemption of Securities for Sinking Fund................. 37 ARTICLE 11 MISCELLANEOUS SECTION 11.01. Trust Indenture Act Controls.............................. 37 SECTION 11.02. Notices................................................... 37 SECTION 11.03. Acts of Securityholders................................... 38 SECTION 11.04. Determination of Voting Rights; Conduct of Meetings....... 39 SECTION 11.05. Certificate and Opinion as to Conditions Precedent........ 39 SECTION 11.06. Statements Required in Certificate or Opinion............. 39 SECTION 11.07. Rules by Trustee and Agents............................... 39 SECTION 11.08. Legal Holidays............................................ 40 SECTION 11.09. Governing Law............................................. 40
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Page SECTION 11.10. No Adverse Interpretation of Other Agreements............. 40 SECTION 11.11. No Recourse Against Others................................ 40 SECTION 11.12. Securities in Foreign Currencies.......................... 40 SECTION 11.13. Currencies................................................ 40 SECTION 11.14. Execution in Counterparts................................. 40 SIGNATURES ...........................................................41
--------------- * This Table of Contents Does not Constitute Part of the Indenture. Page 5 INDENTURE dated as of August 15, 2001 between BELLSOUTH CORPORATION, Georgia corporation ("Company"), and SOUTHTRUST BANK, an Alabama banking corporation ("Trustee"). RECITALS The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness ("Securities") as herein provided. All things necessary to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done. For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the Holders of the Securities. ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. "Affiliate" means any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Company. "Agent" means any authenticating agent, Paying Agent, Registrar or co-Registrar. "Authorized Newspaper" means a newspaper of general circulation, in an official language of the country of publication or in the English language, customarily published on days other than Legal Holidays in such country. Whenever successive weekly publications in an Authorized Newspaper are required hereunder, they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or different Authorized Newspapers. "Board of Directors" means the Board of Directors of the Company or any duly authorized committee thereof. "Board Resolution" means a copy of a resolution of the Board of Directors, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect. "Company" means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions hereof and thereafter means the successor. "Company Order" means an order signed by two Officers of the Company. "Default" means any event which is, or after notice or passage of time would be, an Event of Default. Page 6 "Depositary" means, with respect to the Securities of any Series issuable or issued in the form of one or more Registered Global Securities, the Person designated as Depositary pursuant to Section 2.02 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, 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 Registered Global Securities of that Series. "Holder" or "Securityholder" means the bearer of an Unregistered Security or of a coupon appertaining thereto or the person in whose name a Registered Security is registered on the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time and shall include the forms and terms of a particular Series of Securities established as contemplated hereunder. "Officer" means the chairman of the board of directors, the chief executive officer, the president, the chief financial officer, any vice-president, the treasurer, the general counsel, the secretary of the company or, in the absence of the secretary or treasurer, any assistant secretary or assistant treasurer. "Officers' Certificate" means a certificate signed by two Officers of the Company. "Opinion of Counsel" means a written opinion of legal counsel who is acceptable to the Company. Counsel may be an employee of or counsel to the Company. "Original Issue Discount Security" means any Security which provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02. The term "principal" of a Security means the principal amount of the Security plus, when appropriate, the premium, if any, on the Security. "Registered Global Security" means a Security evidencing all or a part of a Series of Registered Securities, issued to the Depositary for such Series in accordance with Section 2.03 and bearing the legend prescribed in Section 2.03. "Registered Security" means any Security issued hereunder and registered by the Registrar. "Responsible Officer," when used with respect to the Trustee, shall mean any vice-president, the treasurer, the secretary, any trust officer, any assistant vice-president or any other officer or assistant officer associated with the corporate trust department of the Trustee who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with a particular subject. "SEC" means the Securities and Exchange Commission. "Series" or "Series of Securities" means a series of Securities. Page 7 "Securities" means the debentures, notes and other obligations of the Company issued, authenticated and delivered under this Indenture. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more of its other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "TIA" means the Trust Indenture Act of 1939, as amended, as in effect on the date of this Indenture (15 U.S.C. Section 77aaa et. seq.). "Trustee" means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions hereof and thereafter means the successor and if, at any time, there is more than one Trustee, "Trustee" as used with respect to the Securities of any Series shall mean the Trustee with respect to that Series. "U.S. person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or a political subdivision thereof, or an estate or trust the income of which is subject to United States federal income taxation regardless of its source. "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions and all other area subject to its jurisdiction. "Unregistered Security" means any Security issued hereunder which is not a Registered Security. "Yield to Maturity" of a Series of Securities means the yield to maturity, calculated by the Company at the time of issuance of such Series or, if applicable, at the most recent determination of interest on such Series in accordance with accepted financial practice. SECTION 1.02. Other Definitions.
Term Section ---- ------- "Bankruptcy Law"............................................ 6.01 "Custodian"................................................. 6.01 "Event of Default".......................................... 6.01 "Legal Holiday"............................................. 11.08 "Paying Agent".............................................. 2.04 "Registrar"................................................. 2.04 "U.S. Government Obligations"............................... 8.01
Page 8 SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Securities. "indenture security holder" means a Holder or a Securityholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings assigned to them therein. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with accounting principles generally accepted in the United States of America; and (3) words in the singular include the plural, and words in the plural include the singular. ARTICLE 2 THE SECURITIES SECTION 2.01. 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 may be Registered Securities and Unregistered Securities within a Series. The Securities may be subject to such restrictions, and contain such legends, as may be required by United States laws and regulations. Except as provided in or pursuant to Section 2.01, 2.02 or 2.03, all Securities of a Series shall be identical in all respects. Securities of different Series may differ in any respect; provided that all Series of Securities shall be equally and ratably entitled to the benefits of this Indenture. Page 9 SECTION 2.02. Establishment of Terms and Form of Series of Securities. (a) At or prior to the issuance of Securities of any Series, the following shall be established by a Board Resolution, by Company Order or by an indenture supplemental hereto: (1) the title of the Securities of the Series (which title shall distinguish the Securities of the Series from the Securities of all other Series and from all other securities issued by the Company); (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 2.08, 2.09, 2.12, 3.06 or 9.04); (3) the date or dates on which the principal of the Securities of the Series is payable or whether the Securities of a Series are due upon demand by the Holder; (4) the rate or rates at which the Securities of the Series shall bear interest, if any, or the method of calculating such rate or rates of interest, the date or dates from which such interest shall accrue, the dates on which such interest shall be payable and, with respect to Registered Securities, the record date for the interest payable on any interest payment date and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months; (5) the place or places where the principal of and interest on Registered Securities and Unregistered Securities, if any, 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 upon the happening of a specified event or at the option of a Holder thereof and the 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 in other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the Series shall be issuable; (9) 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 6.02; (10) whether Securities of the Series shall be issuable as Registered Securities (and, if so, whether such Securities shall be issuable as Registered Global Securities), or Unregistered Securities (with or Page 10 without interest coupons), or both, and any restrictions applicable to the offering, sale or delivery of Unregistered Securities and whether, and the terms upon which, Unregistered Securities of a Series may be exchanged for Registered Securities of the same Series and vice versa; (11) whether and under what circumstances the Company will pay additional amounts on the Securities of that Series held by a person who is not a U.S. person in respect of taxes or similar charges withheld or deducted and, if so, whether the Company will have the option to redeem such Securities rather than pay such additional amounts; (12) the form of the Securities (or forms thereof if Unregistered Securities and Registered Securities shall be issuable in such Series), including such legends as may be required by United States laws or regulations, the form of any coupons or temporary Security which may be issued and the forms of any certificates which may be required hereunder or under United States laws or regulations in connection with the offering, sale, delivery or exchange of Unregistered Securities; (13) the currency or currencies, including composite currencies, in which payment of the principal of and interest on the Securities of the Series shall be payable (if other than the currency of the United States); (14) if the amount or payments of principal of 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; (15) whether Securities of the Series are issuable as, or exchangeable for, one or more Registered Global Securities and, in such case, the terms upon which interests in such Registered Global Security or Registered Global Securities shall be exchangeable by the Company or the Holder thereof for definitive Securities; (16) any other terms of the Series (which terms shall not be inconsistent with the provisions of this Indenture), including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that Series; (17) any Depositaries with respect to the Securities of such Series; and (18) applicable CUSIP numbers. (b) If the terms and form or forms of any Securities are established by or pursuant to a Board Resolution, the Company shall deliver a copy of such Board Resolution to the Trustee at or prior to the issuance of such Securities with the form or forms of Security which have been approved attached thereto. If a Board Resolution authorized Officers to approve the terms and form or forms of the Securities, the Company shall deliver a copy of such Board Resolution and an Officers' Certificate approving the terms and form or forms of Security with such form or forms of Securities attached thereto. (c) All Securities of any one Series need not be issued at the same time, and unless otherwise provided, a Series may be reopened for issuances of additional Securities of such Series. Page 11 (d) Unregistered Securities and their coupons must have the following statement on their face: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Section 165(j) and 1287 of the Internal Revenue Code of 1986, as amended." SECTION 2.03. Execution, Authentication and Delivery. (a) Securities shall be executed on behalf of the Company by its Chief Executive Officer, President or a Vice-President, and its Chief Financial Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary. Signatures shall be manual or facsimile. A facsimile of the Company's seal shall be reproduced on the Securities and may, but need not, be attested. The coupons of Unregistered Securities shall bear the facsimile signature of the Treasurer or an Assistant Treasurer of the Company. (b) If an Officer, an Assistant Treasurer or an Assistant Secretary of the Company whose signature is on a Security or coupon no longer holds that office at the time the Security is authenticated, the Security or coupon shall be valid nevertheless. (c) A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent and no coupon shall be valid until the Security to which it appertains has been so authenticated. Such signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Each Registered Security shall be dated the date of its authentication, and each Unregistered Security shall be dated as provided in connection with the establishment of the Series thereof. (d) The Trustee or an authenticating agent shall at any time, and from time to time, authenticate and deliver Securities of any Series executed and delivered by the Company for original issue in an aggregate principal amount not in excess of the principal amount authorized for such Series upon receipt by the Trustee of (i) a Company Order for the authentication and delivery of such Securities, (ii) if the terms and form or forms of the Securities of such Series have been established by or pursuant to a Board Resolution as permitted by Section 2.02, a copy of such Board Resolution and any Officers' Certificate that may be required pursuant to Section 2.02(b) or an executed supplemental indenture, if any; (iii) an Officers' Certificate delivered in accordance with Section 11.05, and (iv) an Opinion of Counsel to the effect that: (1) if the form or forms and terms of a particular issue of such Securities of such Series have been established by a supplemental indenture, Board Resolution or Company Order as permitted by Section 2.02, that such form or forms and terms have been established in conformity with the provisions of this Indenture; (2) if the terms of a particular issue of Securities of that Series have been or are to be established by or pursuant to a supplemental indenture, Board Resolution or Company Order as permitted by Section 2.02, that upon delivery of such supplemental indenture, Board Resolution or Company Order such form or forms and terms will have been established in conformity with the provisions of this Indenture; and (3) such Securities, when authenticated and delivered by the Trustee or an authenticating agent and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will Page 12 constitute valid and binding obligations of the Company entitled to the benefits of this Indenture. If the terms and form or forms of such Securities have been established by or pursuant to a supplemental indenture, Board Resolution or Company Order as permitted by Section 2.02, the Trustee or an authenticating agent shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will materially and adversely affect the Trustee's own rights, duties or immunities under the Securities and this Indenture. Notwithstanding the foregoing, until the Company has delivered an Opinion of Counsel to the Trustee and the Registrar stating that, as a result of the action described, the Company would not suffer adverse consequences under the provisions of United States law or regulations in effect at the time of the delivery of Unregistered Securities, (i) delivery of Unregistered Securities by the Trustee or Registrar will be made only outside the United States and its possessions and (ii) Unregistered Securities will be released by the Trustee or Registrar in definitive form to the person entitled to physical delivery thereof only upon presentation of a certificate in the form prescribed by the Company. (e) The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, any Company Order or supplemental indenture pursuant to Section 2.02 or in any additional Board Resolution, Company Order or supplemental indenture which shall reopen a Series of Securities pursuant to Section 2.02. (f) The Trustee may appoint an authenticating agent or agents to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent or agents. An authenticating agent has the same rights as an Agent to deal with the Company or any Affiliate. The term "authenticating agent" includes any co-authenticating agent. If it shall be established pursuant to Section 2.02 that the Securities of a Series are to be issued in the form of one or more Registered Global Securities, then the Company shall execute and the Trustee or an authenticating agent shall, in accordance with this Section and Section 2.02 with respect to such Series, authenticate and deliver one or more Registered Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such Series issued and not yet cancelled, having identical terms, (ii) shall be registered in the name of the Depositary for such Registered Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions and (iv) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the nominee of the 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 Depositary or a nominee of such successor Depositary." Each Depositary designated pursuant to Section 2.02 must, at the time of its designation and at all times while it serves as Depositary, be a clearing Page 13 agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation. SECTION 2.04. Registrar and Paying Agent. The Company shall designate an office or agency where Registered Securities may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where (subject to Sections 2.05(c) and 2.08(b)) Securities may be presented for payment or for exchange ("Paying Agent"). With respect to a Series of any Securities issued in whole or in part as Unregistered Securities, the Company shall maintain one or more Paying Agents which shall be acceptable to the Trustee (such acceptance shall not be unreasonably withheld) located outside the United States and its possessions to which the Unregistered Securities or coupons appertaining thereto may be presented for payment and will provide the necessary funds therefor to such Paying Agent upon reasonable notice. The Registrar shall keep a register with respect to each Series of Securities issued in whole or in part as Registered Securities and as to their transfer and exchange. The company may appoint one or more co-Registrars acceptable to the Trustee and one or more additional Paying Agents for each Series of Securities and the Company may terminate the appointment of any co-Registrar or Paying Agent at any time upon notice. The term "Registrar" includes any co-Registrar. The term "Paying Agent" includes any additional Paying Agent. The company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar or Paying Agent, the Trustee or one or more agents designated by the Trustee shall act as such. SECTION 2.05. Payment on Securities. (a) Subject to the following provisions, the Company will pay to the Trustee or any Paying Agent the amounts, in such coin or currency as is at the time legal tender for the payment of public or private debt, in the manner, at the times and for the purposes set forth herein and in the text of the Securities for each Series, and the Company hereby authorizes and directs the Trustee or such Paying Agent from funds so paid to it to make or cause to be made payment of the principal of and interest, if any, on the Securities and coupons on each Series as set forth herein and in the text of such Securities and coupons. Except as otherwise provided with respect to any Series of Securities, the Trustee will arrange directly with any Paying Agents for the payment, or the Trustee will make payment, from funds furnished by the Company, of the principal of and interest, if any, on the Securities and coupons of each Series by wire transfer or check drawn upon a bank specified by the Company and acceptable to the Trustee. (b) Interest, if any, on Registered Securities of a Series shall be paid on each interest payment date for such Series to the Holder thereof at the close of business on the relevant record dates specified in the Securities of such Series. The Company may pay such interest by check mailed to such Holder's address as it appears on the register for Securities of such Series. Principal of Registered Securities shall be payable only against presentation and surrender thereof at the office of the Paying Agent, unless the Company shall have otherwise instructed the Trustee in writing. (c) To the extent provided in the Securities of a Series, (i) interest, if any, on Unregistered Securities shall be paid only against presentation and surrender of the coupons for such interest installments as are evidenced thereby as they mature and (ii) original issue discount (as defined in Section 1273 of the Internal Revenue Code of 1986, as amended), if any, on Unregistered Securities shall be paid only against presentation and surrender of Page 14 such Securities; in either case at the office of a Paying Agent located outside of the United States and its possessions, unless the Company shall have otherwise instructed the Trustee in writing. Principal of Unregistered Securities shall be paid only against presentation and surrender thereof as provided in the Securities of a Series. If at the time a payment of principal of or interest, if any, or original issue discount, if any, on an Unregistered Security or coupon shall become due, the payment of the full amount so payable at the office or offices of all the Paying Agents outside the United States and its possessions is illegal or effectively precluded because of the imposition of exchange controls or other similar restrictions on the payment of such amount in the United States currency, then the Company may instruct the Trustee to make such payments at the office of a Paying Agent located in the United States, provided that the Company has determined that provision for such payment in the United States would not cause such Unregistered Security to be treated as a "registration-required obligation" under United States law and regulations. Unless otherwise instructed by the Company, no payments of interest, original issue discounts, or principal with respect to Unregistered Securities shall be made by a Paying Agent (i) by a transfer of funds into an account maintained by the payee in the United States, (ii) mailed to an address in the United States or (iii) paid to a United States address by electronic funds transfer. SECTION 2.06. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent for any Series of Securities other than the Trustee to agree in writing that it will hold all sums held by it for the payment of principal of and interest on Securities of that Series in trust for the benefit of the persons entitled thereto until such sums are paid to such persons or otherwise disposed of as herein provided, and that the Paying Agent will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. If the Company acts as Paying Agent, it shall segregate the money held by it for the payment of principal of and interest on any Series of Securities and hold such money as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon so doing the Paying Agent shall have no further liability for the money so paid. SECTION 2.07. Securityholder Lists; Ownership of Securities. (a) The Trustee shall preserve the most recent list received by or furnished to it of the names and addresses of Holders of each Series of Securities. If the Trustee is not the Registrar or if Unregistered Securities are outstanding under the Indenture, the Company shall furnish to the Trustee on or before each interest payment date, and at such other times as the Trustee may request in writing, a list, in such form and as of such date as the Trustee may reasonably require, containing all the information in the possession or control of the Registrar, any co-Registrar, the Company or any of its Paying Agents other than the Trustee as to the names and addresses of Holders of Securities. (b) Ownership of Registered Securities of a Series shall be proved by the register for such Series kept by the Registrar. Ownership of Unregistered Securities may be proved by the production of such Unregistered Securities or by a certificate or affidavit executed by the person holding such Unregistered Securities or by a depository with whom such Unregistered Securities were deposited, if the certificate or affidavit is satisfactory to the Trustee. The Company, the Trustee, and any agent of the Company or the Trustee may treat the bearer of any Unregistered Security or coupon and the person in whose name a Registered Security is registered as the absolute owner thereof for all purposes. Page 15 SECTION 2.08. Transfer and Exchange. (a) When Registered Securities of a Series are presented to the Registrar with a request to register their transfer or to exchange them for an equal principal amount of Registered Securities of the same Series (containing identical terms and provisions and date of maturity) of other authorized denominations, the Registrar shall register the transfer or make the exchange upon receipt of a written instrument of transfer duly executed by the securityholder or such securityholder's attorney duly authorized in writing. (b) If both Registered and Unregistered Securities are authorized for a Series of Securities and the terms of such Securities permit, Unregistered Securities may be exchanged for an equal principal amount of Registered Securities or Unregistered Securities (containing identical terms and provisions) of the same Series and date of maturity in any authorized denominations upon delivery to the Registrar (or a Paying Agent, if the exchange is for Unregistered Securities) of the Unregistered Security with all unmatured coupons and all matured coupons in default appertaining thereto and if all other requirements of the Registrar (or such Paying Agent) and of such Securities for such exchange are met. Notwithstanding the foregoing, the exchange of Unregistered Securities for Registered Securities will be subject to the satisfaction of the provisions of United States law and regulations in effect at the time of such exchange, and no exchange will be made until the Company has notified the Trustee and the Registrar in writing that, as a result of such exchange, the Company would not suffer adverse consequences under such provisions of United States law or regulations. (c) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities upon surrender of Securities for registration of transfer or for exchange as provided in this Section. The Company will not make any charge for any registration of transfer or exchange but may require the payment by the party requesting such registration of transfer or exchange of a sum sufficient to cover any tax or other governmental charge payable in connection therewith, but not for any exchange pursuant to Section 2.12, 3.06 or 9.04. (d) Neither the Company nor the Registrar shall be required (i) to issue, register the transfer of or exchange Securities of any Series for the period beginning at the opening of business 15 days immediately preceding the selection of any such Securities to be redeemed and ending at the close of business on the day of first publication of the relevant notice of redemption or, if there is no publication, the mailing of the relevant notice of redemption, or (ii) to register the transfer of or exchange Securities selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part. (e) Unregistered Securities or any coupons appertaining thereto shall be transferable by delivery. (f) Notwithstanding any other provision of this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Registered Global 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 Page 16 such Depositary or any such nominee to a successor Depositary for such Series or a nominee of such successor Depositary. If at any time the Depositary for any Registered Securities of a Series represented by one or more Registered Global Securities notifies the Company that it is unwilling or unable to continue as Depositary for such Registered Securities or if at any time the Depositary for such Registered Securities shall no longer be eligible under Section 2.03, the Company shall appoint a successor Depositary with respect to such Registered Securities. If a successor Depositary for such Registered Securities is not appointed within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 2.02 that such Registered Securities be represented by one or more Registered Global Securities shall no longer be effective and the Company will execute, and the Trustee or an authenticating agent, upon receipt of an Officers' Certificate for the authentication and delivery of definitive Securities of such Series, will authenticate and deliver, Securities of such Series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities in exchange for such Registered Global Security or Securities. The Company may at any time and in its sole discretion determine that the Registered Securities of any Series issued in the form of one or more Registered Global Securities shall no longer be represented by a Registered Global Security or Securities. In such event the Company will execute, and the Trustee or an authenticating agent, upon receipt of an Officers' Certificate for the authentication and delivery of definitive Securities of such Series, will authenticate and deliver, Securities of such Series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities, in exchange for such Registered Global Security or Securities. If specified by the Company pursuant to Section 2.02 with respect to Securities represented by a Registered Global Security, the Depositary for such Registered Global Security may surrender such Registered Global Security in exchange in whole or in part for Securities of the same Series in definitive registered form on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Trustee or an authenticating agent shall authenticate and deliver, without service charge, (i) to the Person specified by such Depositary a new Registered Security or Securities of the same Series, of any authorized denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Registered Global Security; and (ii) to such Depositary a new registered Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Registered Global Security and the aggregate principal amount of Registered Securities authenticated and delivered pursuant to clause (i) above. Upon the exchange of a Registered Global Security for Securities in definitive registered form, in authorized denominations, such Registered Global Security shall be cancelled by the Trustee. Securities in definitive registered form issued in exchange for a Registered Global Security pursuant to this Page 17 Section 2.08 shall be registered in such names and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Company or the Trustee. The Trustee or an authenticating agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered. SECTION 2.09. Replacement Securities. (a) If a mutilated Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee, the Company shall issue and the Trustee shall authenticate and deliver in exchange therefor a replacement Registered Security, if such surrendered security was a Registered Security, or a replacement Unregistered Security with coupons corresponding to the coupons appertaining to the surrendered Security, if such surrendered Security was an Unregistered Security, of the same Series and containing identical terms and provisions, if the requirements of the Trustee are met. (b) If the Holder of a Security claims that the Security or any coupon appertaining thereto has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Registered Security, if such Holder's claim pertains to a Registered Security, or a replacement Unregistered Security with coupons corresponding to the coupons appertaining to the lost, destroyed or wrongfully taken Unregistered Security or the Unregistered Security to which such lost, destroyed or wrongfully taken coupon appertains, if such Holders' claim pertains to an Unregistered Security, of the same Series and containing identical terms and conditions, if the requirements of the Trustee are met; provided, however, that the Trustee or the Company may require such Holder to provide to the Trustee and the Company security or indemnity sufficient in the judgement of the Company and the Trustee to protect the Company, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Security or any coupon appertaining thereto is replaced. The Company may charge the party requesting a replacement Security for its expenses in replacing a Security. (c) Every replacement Security is an additional obligation of the Company. (d) The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons. SECTION 2.10. Outstanding Securities. (a) Securities outstanding at any time are all Securities authenticated by the Trustee or any other authenticating agent except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. (b) If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. (c) If a Paying Agent (other than the Company) holds on a redemption date or maturity date money sufficient to pay all amounts due on Securities of any Series on that date, then on and after that date all Securities of such Series due on such date cease to be outstanding and interest on them ceases to accrue. Page 18 (d) A Security does not cease to be outstanding because the Company or an Affiliate holds the Security. (e) In determining whether the Holders of the requisite principal amount of outstanding Securities of any Series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or whether sufficient funds are available for redemption or for any other purpose, the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02. (f) No Securities in respect of which deposits have been made pursuant to Section 8.01(a) shall be deemed to be outstanding. SECTION 2.11. Treasury Securities. In determining whether the Holders of the requisite principal amount of Securities of any Series have concurred in any direction, waiver or consent, Securities of such Series owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities of such Series which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Securities of such Series owned by the Company which have been pledged in good faith may be considered by the Trustee, if the pledgee establishes to the satisfaction of the Trustee the pledgee's right to so act with respect to such Securities and that the pledgee is not the Company or an Affiliate. SECTION 2.12. Temporary Securities. (a) Until definitive Registered Securities of any Series are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate temporary Registered Securities of such Series. Temporary Registered Securities of any Series shall be substantially in the form of definitive Registered Securities of such Series but may have variations that the Company considers appropriate for temporary Securities. Every temporary Registered Security shall be executed by the Company and authenticated by the Trustee, and registered by the Registrar, upon the same conditions, and with like effect, as a definitive Registered Security. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Registered Securities of the same Series and date of maturity in exchange for temporary Registered Securities. (b) Until definitive Unregistered Securities of any Series are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate one or more temporary Unregistered Securities, which may have coupons attached or which may be in the form of a single temporary global Unregistered Security of that Series. The temporary Unregistered Security or Securities of any Series shall be substantially in the form of definitive Unregistered Securities of such Series but may have variations that the Company considers appropriate for temporary Securities and shall be delivered to one of the Paying Agents located outside the United States and its possessions or to such other person or persons as the Company shall direct against such certification as the Company may from time to time prescribe. The temporary Unregistered Security or Securities of a Series shall be executed by the Company and authenticated by the Trustee upon the same conditions, and with like effect, as a definitive Unregistered Security of such Series, except as provided herein or in the Company Order, Board Resolution or supplemental indenture relating Page 19 thereto. A temporary Unregistered Security or Securities shall be exchangeable for definitive Unregistered Securities at the time and on the conditions, if any, specified in the temporary Security. Upon any exchange of a part of a temporary Unregistered Security of a Series for definitive Unregistered Securities of such Series, the temporary Unregistered Security shall be endorsed by the Trustee or an authenticating agent for the Trustee to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of the definitive Unregistered Securities of such Series so exchanged and endorsed. SECTION 2.13. Cancellation. The Company at any time may deliver Securities and coupons to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities and coupons surrendered to them for registration of transfer, for exchange or for payment. The Trustee shall cancel all Securities and coupons surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of cancelled Securities and coupons in its customary manner; provided, however, that any Unregistered Securities of a Series delivered to the Trustee for exchange prior to maturity shall be retained by the Trustee for reissue as provided herein or in the Securities of such Series. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for cancellation. SECTION 2.14. Defaulted Interest. If the Company defaults on a payment of interest on a Series of Securities, the Company shall pay the defaulted interest as provided in such Securities or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed and acceptable to the Trustee. With respect to Registered Securities, the Trustee may pay the defaulted interest, plus any interest payable on the defaulted interest, to the Holders of such Registered Securities on a subsequent special record date. The Company shall fix the record date and the payment date. At least 15 days before the record date the Company shall mail to such Holders a notice that states the record date, the payment date and the amount of interest to be paid. SECTION 2.15 CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. ARTICLE 3 REDEMPTION SECTION 3.01. Notice to Trustee. The Company may, with respect to any Series of Securities, reserve the right to redeem and pay such Series of Securities or any part thereof, or may covenant to redeem and pay the Series of Securities or any part thereof, before maturity at such time and on such terms as provided for in such Securities. If a Page 20 Series of Securities is redeemable and the Company wants or is obligated to redeem all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee of the redemption date and the principal amount of the Series of Securities to be redeemed. The Company shall give such notice at least 60 days before the redemption date (or such shorter notice as may be acceptable to the Trustee). SECTION 3.02. Selection of Securities to be Redeemed. If less than all the Securities of a Series with the same issue date, interest rate and stated maturity are to be redeemed, the Trustee, not more than 60 days prior to the redemption date, shall select the Securities of the Series to be redeemed pro rata or by lot or in such other manner as the Company shall direct. The Trustee shall make the selection from Securities of the Series that are outstanding and that have not previously been called for redemption. Securities of the Series and portions of them selected by the Trustee shall be in amounts of $1,000 or integral multiples of $1,000 or with respect to Securities of any Series issuable in other denominations pursuant to Section 2.02(a)(8), in amounts equal to the minimum principal denomination for each such Series and in integral multiples thereof. Provisions of this Indenture that apply to Securities of that Series called for redemption also apply to portions of Securities of that Series called for redemption. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption. SECTION 3.03. Notice of Redemption. (a) At least 30 days but not more than 90 days before a redemption date, unless a shorter period is specified in the Securities to be redeemed, the Company shall mail a notice of redemption by first-class mail to each Holder of Registered Securities that are to be redeemed. (b) If Unregistered Securities are to be redeemed, notice of redemption shall be published in an Authorized Newspaper in each of The City of New York, London and, if such Securities to be redeemed are listed on the Luxembourg Stock Exchange, Luxembourg twice in different calendar weeks, the first publication to be not less than 30 nor more than 90 days before the redemption date. (c) All notices shall identify the Series of Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if less than all the outstanding Securities of a Series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed, including CUSIP numbers; (4) the name and address of the Paying Agent; (5) that the Securities of the Series called for redemption and all unmatured coupons, if any, appertaining thereto must be surrendered to the Paying Agent to collect the redemption price; (6) that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date; and Page 21 (7) if the redemption is pursuant to a mandatory or optional sinking fund payment. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed or published, Securities of a Series called for redemption become due and payable on the redemption date at the redemption price. Upon surrender to the Paying Agent of such Securities, together with all unmatured coupons, if any, appertaining thereto, such Securities shall be paid at the redemption price plus accrued interest to the redemption date, but installments of interest due on or prior to the redemption date will be payable, in the case of Unregistered Securities, to the bearers of the coupons for such interest upon surrender thereof and, in the case of Registered Securities, to the Holders of such Securities of record at the close of business on the relevant record dates. SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New York time, on the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and interest accrued to the redemption date on all Securities to be redeemed on that date. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder of that Security a new Security or Securities of the same Series, the same form and the same maturity in authorized denominations equal in aggregate principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities. The Company shall pay or cause to be paid the principal of and interest on the Securities on the dates and in the manner provided herein and in the Securities. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date immediately available funds designated for and sufficient to pay the installment. The Company shall pay interest on overdue principal of a Security of any Series at the rate of interest (or, in the case of Original Issue Discount Securities, Yield to Maturity) borne by the Securities of that Series, and, to the extent lawful, it shall pay interest on overdue installments of interest at the same rate. SECTION 4.02. Lien on Assets. If at any time the Company mortgages, pledges or otherwise subjects to any lien the whole or any part of any property or assets now owned or hereafter acquired by it, except as hereinafter provided in this Section 4.02, the Company will secure the outstanding Securities, and any other obligations of the Company which may then be outstanding and entitled to the benefit of a covenant similar in effect to this covenant, equally and ratably with the indebtedness or obligations secured by such mortgage, pledge or lien, for as long as any such Page 22 indebtedness or obligation is so secured. The foregoing covenant does not apply to (1) the creation, extension, renewal or refunding of purchase-money mortgages or liens, or (2) to the making of any deposit or pledge to obtain the benefits of any law relating to workers' compensation, unemployment insurance, old age pensions or other social security, or (3) with any court, board, commission or governmental agency as security incident to the proper conduct of any proceeding before it or (4) any liens on the Company's property or assets that arise solely as a result of a merger of an entity that has existing liens on its property or assets with or into the Company. Nothing contained in this Indenture prevents an Affiliate of the Company from mortgaging, pledging or subjecting to any lien any property or assets, whether or not acquired by such Affiliate from the Company. SECTION 4.03. Reports by the Company. The Company agrees: (a) to file with the Trustee, within 15 days after the Company is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) which the Company may be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). (b) To the extent required by the Trust Indenture Act of 1939 as to the Securities of any Series, the Company will annually furnish to the Trustee on or before the date the Company is required to file its annual report with the Trustee pursuant to Section 4.03(a) a brief certificate (which need not comply with Section 11.06) from the principal executive, financial or accounting officer of the Company as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture). (c) The Company shall deliver to the Trustee, as soon as possible and in any event within five days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers' Certificate setting forth the details of such Event of Default or default and the action which the company proposes to take with respect thereto. SECTION 4.04. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time. Page 23 ARTICLE 5 SUCCESSORS SECTION 5.01. When the Company May Merge, etc. The Company may not consolidate with, merge into or be merged into, or transfer or lease its properties and assets substantially as an entirety to, any person, unless (i) the surviving person is a corporation organized under the laws of the United States, any State thereof or the District of Columbia, (ii) the surviving person, if other than the Company, assumes by supplemental indenture all the obligations of the Company under the Securities and any coupons appertaining thereto and under this Indenture and, (iii) after giving effect thereto, no Default or Event of Default shall have occurred and be continuing. The surviving, transferee or lessee corporation shall be the successor to the Company and the Company, except in the case of a lease, shall be relieved of all obligations under this Indenture and the Securities. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. An "Event of Default" occurs with respect to the Securities of any Series if: (1) the Company defaults in the payment of interest on any Security of that Series when the same becomes due and payable and the Default continues for a period of 90 days; (2) the Company defaults in the payment of the principal of any Security of that Series when the same becomes due and payable at maturity, upon redemption or otherwise; (3) the Company fails to comply with any of its other agreements in the Securities of that Series, or in any supplemental indenture under which the Securities of that Series may have been issued or in this Indenture (other than an agreement included solely for the benefit of a Series of Securities other than that Series) and the Default continues for the period and after the notice specified below; (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors, or (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the Company or for all or substantially all of its property, or Page 24 (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A Default under clause (3) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of all the outstanding Securities of that Series notify the Company (and the Trustee in the case of notification by such Holders) of the Default and the Company does not cure the Default within 90 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. Acceleration. If an Event of Default occurs with respect to the Securities of any Series and is continuing, the Trustee, by notice to the Company, or the Holders of at least 25% in principal amount of all of the outstanding Securities of that Series, by notice to the Company and the Trustee, may declare the principal (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 if that Series) of, and any accrued interest on, all the Securities of that Series to be due and payable. Upon such declaration, such principal (or, in the case of Original Issue Discount Securities, such specified amount) and any accrued interest shall be due and payable immediately. SECTION 6.03. Other Remedies Available to Trustee. (a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of and interest on the Securities of the Series that is in Default or to enforce the performance of any provision of the Securities of that Series or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. To the extent permitted by law, all available remedies are cumulative. SECTION 6.04. Waiver of Existing Defaults; Rescission of Acceleration. The Holders of a majority in principal amount of any Series of Securities by notice to the Trustee and the Company may waive an existing Default with respect to that Series and rescind an acceleration under Section 6.02 and its consequences except a Default in the payment of principal of or interest on any Security (other than such as may have become due solely because of the acceleration), provided such waiver or rescission would not conflict with any judgment or decree. SECTION 6.05. Control by Majority. (a) The Holders of a majority in principal amount of the Securities of each Series affected (with each such Series voting as a class) may 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 it with respect to Securities of that Series. However, the Trustee may refuse to follow any Page 25 direction that conflicts with law or this Indenture. (b) With respect to the Securities of any Series all or part of which is represented by a Registered Global Security, the following provision shall apply. Upon receipt by the Trustee of (i) any written notice directing the time, method or place of conducting any proceeding or exercising any trust or power pursuant to Section 6.06 with respect to Securities of any Series or (ii) any written demand, request or notice with respect to any matter on which the Holders of any Series of Securities are entitled to act under this Indenture, a record date shall be established for determining Holders of outstanding Securities of such Series entitled to join in such notice, demand or request, which record date shall be at the close of business on the day the Trustee receives such notice, demand or request. The Holders on such record date, or their duly designated proxies, and only such persons, shall be entitled to join in such notice, demand or request, whether or not such Holders remain Holders after such record date; provided, however, that unless the Holders of the requisite principal amount of the outstanding Securities of such Series shall have joined in such notice, demand or request prior to the day which is the 90th day after such record date, such notice, demand or request shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, (A) after expiration of such 90-day period, a new notice, demand or request identical to a notice, demand or request which has been cancelled pursuant to the proviso to the preceding sentence or (B) during any such 90-day period, a new notice, demand or request contrary to or different from such notice, demand or request, in either of which events a new record date shall be established pursuant to the provisions of this subsection. SECTION 6.06. Limitation on Suits by Securityholders. A Securityholder may pursue a remedy with respect to this Indenture or the Securities of any Series only if: (1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to Securities of that Series; (2) the Holders of at least 25% in principal amount of the Securities of that Series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense to be, or which may be, incurred by the Trustee in pursuing the remedy; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period, the Holders of a majority in principal amount of the Securities of that Series do not give the Trustee a direction inconsistent with the request. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of the principal of and interest on a Security, on or after the respective due dates expressed in the Security, and the right of any Holder of a coupon to receive payment of interest due as Page 26 provided in such coupon, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suits by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs with respect to Securities of any Series and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of the principal of and interest on Securities of that Series remaining unpaid. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relating to the Company, its creditors or its property. SECTION 6.10. Priorities. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to Holders of Securities in respect of which or for the benefit of which such money has been collected for amounts due and unpaid on such Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and Third: to the Company. The Trustee may fix a record date (with respect to Registered Securities) and payment date for any payment to Holders of Securities pursuant to this Article. SECTION 6.11. Undertaking for Costs. 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 or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Company, the Trustee, a Holder pursuant to Section 6.07 or a Holder or Holders of more than 10% in principal amount of the Securities of any Series. ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of its rights and powers vested in it under 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. Page 27 (b) Except during the continuance of Event of Default: (1) The Trustee need perform only those duties that 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 conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, with respect to certificates or opinions specifically required to be provided to the Trustee hereunder, the Trustee shall examine the certificates and opinions to determine whether or not they substantially conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section. (2) The Trustees shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (4) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder with respect to any Series, except failure by the Company to cause to be made any of the payments to the Trustee required to be made hereunder, unless the Trustee shall be notified in writing of such default by the Company or by the holders of 25% in aggregate principal amount of Securities of such Series then outstanding or unless a Responsible Officer of the Trustee shall have actual knowledge of such default. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power hereunder unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it (and shall not be obligated to invest such money) except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) 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 Page 28 funds or adequate indemnity against such risk or liability is not reasonably assured to it. This Section 7.01 is in furtherance of and subject to Sections 315 and 316 of the TIA. SECTION 7.02. Rights of Trustee. In furtherance of and subject to Sections 315 and 316 of the TIA, and except as otherwise provided in Section 7.01: (a) The Trustee may conclusively rely and shall be protected in acting or refraining from acting upon on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in any document. (b) Before the Trustee acts or refrains from acting, it may consult with counsel of its own selection or require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on a Board Resolution, an Officers' Certificate, a Company Order, an Opinion of Counsel or the written advice of counsel. (c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (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 security or indemnity satisfactory to the Trustee 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 discretion, 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 reasonable to such inquiry or investigation, during normal business hours, personally or by agent or attorney and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (g) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder; and (h) The Trustee may request that the company deliver an Officers' Certificate setting for the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, Page 29 which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any agent may do the same with like rights. SECTION 7.04. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, shall not be accountable for the Company's use of the proceeds from the Securities and shall not be responsible for any statement in the Securities (other than its certificate of authentication if it shall authenticate the Securities). SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing with respect to the Securities of any Series and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to each Holder of a Security of that Series entitled to receive reports pursuant to the TIA (and, if Unregistered Securities of that Series are outstanding, shall cause to be published at least once in Authorized Newspaper in each of The City of New York, London and, if Securities of that Series are listed on the Luxembourg Stock Exchange, Luxembourg) notice of the Default within 90 days after it occurs, unless such Default shall have been cured or waived. Except in the case of a Default in payment on the Securities of any Series, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding such notice is in the interests of Securityholders of that Series. SECTION 7.06. Reports by Trustee to Holders. (a) To the extent required by TIA Section 313(a), on May 15 each year, commencing on May 15, 2002, the Trustee shall mail to each Securityholder of each Series entitled to receive reports pursuant to the TIA a brief report, dated as of such date, that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). (b) At the time that it mails such a report to Securityholders of any Series, the Trustee shall file a copy of that report with the SEC and with each stock exchange on which the Securities of that Series are listed. The Company shall provide written notice to the Trustee when the Securities of any Series are listed on any stock exchange or delisted therefrom. SECTION 7.07. Compensation and Indemnity. (a) The Company shall pay to the Trustee from time to time such compensation for its services as the Company and the Trustee shall from time to time agree in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it in connection with the performance of its duties under this Indenture. Such expenses shall include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. (b) The Company shall indemnify the Trustee and hold it harmless against any and all loss, claims, damage, expense or liability incurred by it arising out of or in connection with its acceptance or administration of the trust or Page 30 trusts hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity; provided, however, that the failure of the Trustee to so notify the Company of any claim of which a Responsible Officer of the Trustee has knowledge shall not relieve the Company of its obligations to indemnify the Trustee, except to the extent the Company has been materially prejudiced by such failure. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. (c) The Company need not reimburse any expense or indemnify against any loss or liability determined to have been caused by the Trustee through its own negligence or willful misconduct. (d) To secure the payment obligations of the Company pursuant to this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities of a Series. (e) If the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(4) or (5) occurs, such expenses and the compensation for such services shall constitute expenses of administration under any Bankruptcy Law. (f) The provisions of this Section shall survive the termination of this Indenture and the resignation or removal of the Trustee. SECTION 7.08. Replacement of Trustee. (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. (b) The Trustee may resign with respect to the Securities of any Series by so notifying the Company. The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with respect to Securities of any Series if: (1) the Trustee fails to comply with Section 7.10 hereof or Section 310(b) of the TIA; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason with respect to Securities of any Series, the Company shall promptly appoint a successor Trustee for such Series. Within one year after a successor Trustee with respect to the Securities of any Series takes office, the Holders of a majority in principal amount of Securities of that Series may appoint a successor Trustee with respect to the Securities of that Series to replace the successor Trustee appointed by the Company. Page 31 (d) If a successor Trustee with respect to the Securities of any Series does not take office within 60 days after the retiring Trustee provides written notice of its resignation pursuant to subsection (b) above or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the Securities of the applicable Series may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such Series. (e) If the Trustee with respect to the Securities of any Series fails to comply with Section 7.10 hereof or Section 310(b) of the TIA, any Securityholder of the applicable Series may petition any court of competent jurisdiction for the removal of such Trustee and the appointment of a successor Trustee. (f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee for any Series of Securities shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to all Series of Securities for which the successor Trustee is to be acting as Trustee under this Indenture. The retiring Trustee shall promptly upon payment of amounts due it hereunder transfer all property held by it as Trustee with respect to such Series of Securities to the successor Trustee subject to the lien provided for in Section 7.07. The Company shall give notice of each appointment of a successor Trustee for any Series of Securities by mailing written notice of such event by first-class mail to the Holders of Securities of such Series entitled to receive reports pursuant to the TIA and, if any Unregistered Securities are outstanding, by publishing notice of such event once in an Authorized Newspaper in each of The City of New York, London, and, if Securities of that Series are listed on the Luxembourg Stock Exchange, Luxembourg. (g) All provisions of this Section 7.08 except subparagraphs (b)(1), (e) and (h) and the words "subject to the lien provided for in Section 7.07" in subparagraph (f) shall apply also to any Paying Agent located outside the United States as required by Section 2.04 (h) 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 such successor Trustee shall execute and deliver a supplemental indenture wherein such 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, such 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 Series 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 Page 32 of the same trust and 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. SECTION 7.09. Successor Trustee, Agents by Merger, etc. If the Trustee or any Agent consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business assets to, another corporation, the successor corporation, without any further act, shall be the successor Trustee or Agent, as the case may be. SECTION 7.10. Eligibility This Indenture shall always have a Trustee with respect to such Series of Securities which satisfies the requirements of TIA Section 310(a)(1). The Trustee shall always have a combined capital and surplus of at least $100,000,000, as set forth in its most recent published annual report of condition. ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. Termination of the Company's Obligations. (a) The Company reserves the right to terminate all of its obligations under (i) this Indenture and the Securities, or (ii) the Securities of any Series, if the Company irrevocably deposits in trust with the Trustee money in an amount and in the currency in which Securities of such Series are denominated, or in the event of dollar-denominated Securities, U.S. Government Obligations sufficient to pay, when due, the principal of and any interest on all the Securities or all the Securities of that Series, as the case may be, to maturity or redemption (together with irrevocable instructions to the Trustee requiring redemption at the earliest possible redemption date, if any, in accordance with Article 3) and if all other conditions set forth in the Securities of that Series are met. However, the Company's obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 7.07, 7.08, 8.03 and 8.04 shall survive until the Securities are no longer outstanding. Thereafter the Company's obligations in Section 7.07, 8.03 and 8.04 shall survive. (b) Before or after a deposit the Company shall make arrangements satisfactory to the Trustee for the redemption of Securities at the earliest possible redemption date, if any, in accordance with Article 3. (c) After a deposit by the Company in accordance with this Section in respect to the Securities of a Series, the Trustee upon written request of the Company shall acknowledge in writing the discharge of the Company's obligations under the Securities of the Series in respect of which the deposit has been made and this Indenture with respect to the Securities of that Series except for those surviving obligations specified above. (d) In order to have money available on a payment date to pay principal of and interest on the Securities of any Series, the U.S. Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money; however, such U.S. Government Obligations shall not be callable at the issuer's option. (e) "U.S. Government Obligations" means: (i) direct obligations of the United States for the payment of which Page 33 the full faith and credit of the United States are pledged; or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentally of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States. SECTION 8.02. Application of Trust Money. The Trustee shall hold in trust all money or U.S. Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities of each Series in respect of which the deposit shall have been made. SECTION 8.03. Repayment to the Company. (a) The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. (b) If permitted under applicable law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years after such principal or interest became due. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. SECTION 8.04. Indemnity for Government Obligations. The Company shall pay and shall indemnify the Trustee and each Securityholder of each Series in respect of which the deposit shall have been made against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such obligations. ARTICLE 9 AMENDMENTS AND WAIVERS SECTION 9.01. Without Consent of Holders The Company and the Trustee may enter into one or more supplemental indentures without consent of any Securityholder for any of the following purposes: (1) to cure any ambiguity, defect or inconsistency herein or in the Securities of any Series; (2) to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as provided in Section 2.02, and to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any Series Securities; (3) to secure the Securities pursuant to Section 4.02; (4) to comply with Section 5.01; (5) to provide for uncertificated Securities in addition to or in place of certificated Securities outstanding; Page 34 (6) to add to the rights of the Holders of any Series of Securities or to surrender any right or power herein conferred on the Company; or (7) to make any change that does not adversely affect the rights of any Securityholder. SECTION 9.02. With Consent of Holders. (a) With the written consent of the Holders of a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture (with each Series voting as a class), the Company and the Trustee may enter into a supplemental indenture to add any provisions to or to change or eliminate any provisions of this Indenture or of any supplemental indenture or to modify, in each case in any manner not covered by Section 9.01, the rights of the Securityholders of each such Series. The Holders of a majority in principal amount of the outstanding Securities of each Series affected by such waiver (with each Series voting as a class), by notice to the Trustee, may waive compliance by the Company with any provision of this Indenture, any supplemental indenture or the Securities of any such Series except a Default in the payment of the principal of or interest on any Security. However, without the consent of each Securityholder affected, an amendment or waiver may not: (1) reduce the amount of Securities whose Holders must consent to an amendment or waiver; (2) reduce the rate of or change the time for payment of interest on any Security; (3) reduce the principal of or change the fixed maturity of any Security; (4) waive a Default in the payment of the principal of or interest on any Security; (5) make any Security payable in money other than that stated in the Security; or (6) make any change in Section 6.04, 6.07 or 9.02(a) (third sentence). (b) It is not necessary under this Section 9.02 for the Securityholders to consent to the particular form of any proposed supplemental indenture, but it is sufficient if they consent to the substance thereof. (c) Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section 9.02, the Company shall transmit by mail a notice, setting forth in general terms the substance of such supplemental indenture, to all Holders of Registered Securities, as the names and addresses of such Holders appear on the register for each Series of Securities, and to such Holders of Unregistered Securities as are entitled to receive reports pursuant to the TIA. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.03. Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Page 35 Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder of each Series affected by such amendment or waiver. SECTION 9.04. Notation on or Exchange of Securities. The Trustee may place an appropriate notation about an amendment or waiver on any Security or any Series thereafter authenticated. The Company in exchange for Securities of that Series may issue and the Trustee shall authenticate new Securities of that Series that reflect the amendment or waiver. SECTION 9.05. Trustee Protected. The Trustee need not sign any supplemental indenture that the Trustee reasonably believes likely to affect its rights or increase its duties or obligations under this Indenture in any material way. 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 shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. ARTICLE 10 SINKING FUNDS SECTION 10.01. 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, permitted or required by any form of Security of such Series issued pursuant to this Indenture. The minimum amount of any sinking fund payment provided for by the terms of Securities of any Series is herein referred to as "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of such Series is herein referred to as in "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 10.02. 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 10.02. Satisfaction of Sinking Fund Payments with Securities. The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such Series to be made pursuant to the terms of such Securities as provided for by the terms of such Series, (1) deliver outstanding Securities of such Series (other than any of such Securities previously called for redemption or any of such Securities in respect of which cash shall have been released to the Company) and (2) apply as a credit Securities of such Series which have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, 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 price specified in such Securities for redemption through Page 36 operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities of any Series in lieu of cash payments pursuant to this Section 10.02, the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment; provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required to be released to the Company. SECTION 10.03. 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 mandatory 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 of Securities of that Series pursuant to Section 10.02, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment. The Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days before each such 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 3.02 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 3.03. Such notice have been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.04, 3.05 and 3.06. ARTICLE 11 MISCELLANEOUS SECTION 11.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA (an "incorporated provision"), the incorporated provision shall control. SECTION 11.01. Notices. (a) Any notice or communication by the Company, any Securityholder or the Trustee to the other is duly given if in writing and delivered in person, mailed by First-class mail, or sent by facsimile: if to the Company to: BellSouth Corporation 1155 Peachtree Street, N.E. Atlanta, Georgia 30309-3610 Attn: Treasurer if to the Trustee to: SouthTrust Bank 79 West Paces Ferry Road, N.W. Page 37 Mail Code: B-024-WP-001 Atlanta, Georgia 30305 Attn: Thomas E. Clower Facsimile: (404) 841-4766 (b) The Company or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications. (c) Any notice or communication to Holder of Securities entitled to receive reports pursuant to the TIA shall be mailed by first-class mail to the addresses for Holders of Registered Securities shown on the register kept by the Registrar and to addresses filed with the Trustee for other Holders. Failure to so mail a notice or communication or any defect in such notice or communication shall not affect its sufficiency with respect to other Holders of Securities of that or any other Series entitled to receive notice. (d) If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. (e) If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and to each Agent at the same time. (f) If it shall be impractical in the opinion of the Trustee or the Company to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall constitute a sufficient publication of such notice. (g) All other notices or communications will be in writing. SECTION 11.03. Acts of Securityholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders 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. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of Unregistered Securities, shall be sufficient for any purpose of this Indenture and 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 the certificate of any 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 an officer of a corporation or a member of a partnership, on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Page 38 Holder of the same Security and the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done 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 11.04. Determination of Voting Rights; Conduct of Meetings. (a) At any meeting of Securityholders, each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Securities held or represented. If any Securities entitled to vote at such meeting are Original Issue Discount Securities, such Holders shall have such votes as are determined by reference to such portion of the principal amount as may be specified in the terms of each such Series which would be due and payable at the time of such meeting. However, no vote shall be cast or counted in respect of any Security which is challenged as not outstanding and ruled to be not outstanding. (b) The Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders and the appointment of proxies in regard thereto. A chairman and secretary of the meeting shall be elected by vote of the Holders of a majority of the votes represented and entitled to vote at the meeting. SECTION 11.05. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, including the execution of an indenture supplemental hereto, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and stating that such proposed action is authorized under and complies with the terms of this Indenture; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and stating that such proposed action is authorized under and complies with the terms of this Indenture. SECTION 11.06. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (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 such person, 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 or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 11.07. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or a meeting of Page 39 Securityholders of one or more Series. The Paying Agent or Registrar may make reasonable rules and set reasonable requirements for its functions. SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in Atlanta, Georgia or New York, New York are not required to be open. If a payment date is a Legal Holiday at a place of payment, payment may be made at such place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 11.09. Governing Law. The laws of the State of New York shall govern this Indenture, the Securities and any coupons appertaining thereto. SECTION 11.10. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any Affiliate. No such indenture, loan or debt agreement may be used to interpret this Indenture. SECTION 11.11. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligation of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. SECTION 11.12. Securities in Foreign Currencies. Whenever this Indenture provides for (i) any action by, or the determination of any of the rights of, Holders of Securities of any Series in which some or all of such Securities are denominated in a currency other than U.S. dollars or (ii) any distribution to Holders of Securities, unless otherwise specified as contemplated by Section 2.02 for Securities for such Series, any amount in respect of any Security denominated in a currency other than United States dollars shall be treated for any such action or distribution as that amount of United States dollars that could be obtained for such amount on such reasonable basis of exchange and as of the record date for such action, determination of rights or distribution (or, if there shall be no applicable record date, such other date reasonably proximate to the date or such action, determination of rights or distribution) as the Company may specify in a written notice to the Trustee or, in absence of such written notice, as the Trustee may determine. SECTION 11.13. Currencies. Except as may otherwise be provided in the form of Securities of any particular Series pursuant to the provisions of this Indenture, all references in this Indenture or in the Securities to "dollars," "$" or any similar reference shall be to the currency of the United States of America. SECTION 11.14. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one instrument. Page 40 [SIGNATURE PAGE TO INDENTURE DATED AS OF AUGUST 15, 2001] BELLSOUTH CORPORATION By /s/ Linda S. Harty ----------------------------------- Title Vice President and Treasurer SOUTHTRUST BANK By /s/ Thomas E. Clower ----------------------------------- Title Vice President and Trust Officer Page 41 EX-25.A 5 g72203ex25-a.txt STATEMENT OF ELIGIBILITY OF TRUSTEE 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) -------------------------------------------- BELLSOUTH CORPORATION (Exact name of obligor as specified in its charter) GEORGIA 58-1533433 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 1155 PEACHTREE STREET, NE ATLANTA, GA 30309-3610 (Address of principal executive offices) (Zip Code) ========================================= 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 17th day of October, 2001. THE CHASE MANHATTAN BANK By /s/ Gregory P. Shea ---------------------------------------- Gregory P. Shea Assistant 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 June 30, 2001, 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 ....................................... $ 21,536 Interest-bearing balances ............................... 31,428 Securities: Held to maturity securities .................................. 481 Available for sale securities ................................ 60,903 Federal funds sold and securities purchased under agreements to resell .................................... 42,824 Loans and lease financing receivables: Loans and leases held for sale .......................... 3,856 Loans and leases, net of unearned income ................ $ 155,575 Less: Allowance for loan and lease losses ............... 2,276 Loans and leases, net of unearned income and allowance ............................................... 153,299 Trading Assets ............................................... 66,636 Premises and fixed assets (including capitalized leases) ..... 4,468 Other real estate owned ...................................... 45 Investments in unconsolidated subsidiaries and associated companies .................................... 353 Customers' liability to this bank on acceptances outstanding ............................................. 346 Intangible assets Goodwill ............................................. 1,785 Other Intangible assets .............................. 4,365 Other assets ................................................. 19,923 --------- TOTAL ASSETS ................................................. $ 412,248 =========
- 4 - LIABILITIES Deposits In domestic offices ..................................... $ 137,865 Noninterest-bearing ..................................... $ 56,799 Interest-bearing ........................................ 81,066 In foreign offices, Edge and Agreement subsidiaries and IBF's .................................. 113,924 Noninterest-bearing .................................. $ 6,537 Interest-bearing ........................................ 107,387 Federal funds purchased and securities sold under agree- ments to repurchase .......................................... 65,474 Trading liabilities .......................................... 39,611 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ............... 10,573 Bank's liability on acceptances executed and outstanding ..... 346 Subordinated notes and debentures ............................ 6,355 Other liabilities ............................................ 14,772 TOTAL LIABILITIES ............................................ 388,920 Minority Interest in consolidated subsidiaries ............... 89 EQUITY CAPITAL Perpetual preferred stock and related surplus ................ 0 Common stock ................................................. 1,211 Surplus (exclude all surplus related to preferred stock) .... 12,715 Retained earnings ........................................ 9,985 Accumulated other comprehensive income ................... (672) Other equity capital components .............................. 0 TOTAL EQUITY CAPITAL ......................................... 23,239 --------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ..... $ 412,248 =========

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 instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON JR. ) DOUGLAS A. WARNER III ) DIRECTORS WILLIAM H. GRAY III ) -5- EX-25.B 6 g72203ex25-b.txt STATEMENT OF ELIGIBILITY OF TRUSTEE 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 UNITED STATES CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) [] SouthTrust Bank --------------------------------------------------- (Exact name of trustee as specified in its charter) State of Alabama 63-0022787 ----------------------------------------- --------------------- (Jurisdiction of incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification Number) 110 Office Park Drive, Birmingham, AL 35223 ------------------------------------- -------- (Address of principal executive offices) (Zip Code) N/A -------------------------------------------------------------------------------- (Name, address and telephone number of agent for services) BellSouth Corporation -------------------------------------------------------------------------------- (Exact name of obligor as specified in its charter) State of Georgia 58-1533433 ---------------------------- ------------------------------- (State or other jurisdiction (I.R.S. Employer Identification of incorporation or organization) No.) 1155 Peachtree Street NE, Atlanta, GA 30309-3610 ------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Debt Securities under Indenture dated August 15, 2001 ----------------------------------------------------- (Title of the indenture securities) 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. See Attached 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 Instructions. 1. The term "affiliate" is defined in Rule 0-2 of the General Rules and Regulations under the Act. Attention is also directed to Rule 7a-26. 2. Include the name of each such affiliate and the names of all intermediary affiliates, if any. Indicate the respective percentage of voting securities or other bases of control giving rise to the affiliation. ITEM 3. VOTING SECURITIES OF THE TRUSTEE. Furnish the following information as to each class of voting securities of the trustee: As of 10/17/2001 (Insert date within 31 days). ~~Col. A Col. B Title of Class Amount Outstanding Class A Common 342,184,000~~

Instruction. The term "voting security" is defined in Section 303(16) of the Act. ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES. NONE If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: a. Title of the securities outstanding under each such other indenture. b. A brief statement of the facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310(b)(1) of the Act arises as a result of the trusteeship under any such other indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR UNDERWRITERS. N/A If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Instructions. 1. Notwithstanding General Instruction F, the term "underwriter" as used in this item does not refer to any person who is not currently engaged in the business of underwriting. 2. The terms "employee," "appointee," and "representative," as used in this item, do not include connections in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity or connections in the capacity of trustee, whether under an indenture or otherwise. ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS. N/A Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner, and executive officer of the obligor: As of _________(Insert date within 31 days). Instructions. 1. Names of persons who do not own beneficially any of the securities specified may be omitted. 2. No information need be given in any case where the amount of voting securities of the trustee, owned beneficially by the obligor and its directors, partners, and executive officers, taken as a group, does not exceed 1 percent of the outstanding voting securities of the trustee. Col. A Col. B Col. C Col. D ============================================================================== Name of Title of Amount Owned Percentage of Voting Securities Owner Class Beneficially Represented by Amount Given in Col. C ============================================================================== Data data data Data

ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR OFFICIALS. N/A Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner, and executive officer of each such underwriter: As of _________(Insert date within 31 days). Instructions. 1. Instruction 1 to Item 6 shall be applicable to this item. 2. The name of each director, partner, or executive officer required to be given in Column A shall be set forth under the name of the underwriter of which he is a director, partner, or executive officer. 3. No information need be given in any case where the amount of voting securities of the trustee owned beneficially by an underwriter and its directors, partners, and executive officers, taken as a group, does not exceed 1 percent of the outstanding voting securities of the trustee. Col. A Col. B Col. C Col. D ============================================================================== Name of Title of Amount Owned Percentage of Voting Securities Owner Class Beneficially Represented by Amount Given in Col. C ============================================================================== Data data data Data

ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE. N/A Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee: As of _______(Insert date within 31 days). Instructions. 1. As used in this item, the term "securities" includes only such securities as are generally known as corporate securities, but shall not include any note other evidence of indebtedness issued to evidence an obligation to repay monies lent to a person by one or more banks, trust companies, or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness. 2. For the purposes of this item the trustee shall not be deemed the owner or holder of (a) any security which it holds as collateral security (as trustee or otherwise) for an obligation which is not in default, or (b) any security which it holds as collateral security under the indenture to be qualified, irrespective of any default thereunder, or (c) any security which it holds as agent for collection, or as custodian, escrow agent or depositary, or in any similar representative capacity. 3. No information need be furnished under this item as to holdings by the trustee of securities already issued under the indenture to be qualified or securities issued under any other indenture under which the trustee is also trustee. 4. No information need be given with respect to any class of securities where the amount of securities of the class which the trustee owns beneficially or holds as collateral security for obligations in default does not exceed 1 percent of the outstanding securities of the class. Col. A Col. B Col. C Col. D =============================================================================================================== Title of Whether the Securities are Amount Owned Beneficially or Held as Percentage of Class Class Voting or Nonvoting Collateral Security for Obligations in Represented by Amount Given Securities Default In Col. C =============================================================================================================== Data data data Data

ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE. N/A If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee: As of _________(Insert date within 31 days). Col. A Col. B Col. C Col. D ================================================================================================================= Title of Issuer Amount Owned Beneficially or Held as Percentage of Class and Title of Amount Collateral security for obligations in Default Represented by Amount Given Class outstanding by Trustee in Col. C ================================================================================================================= Data data data Data

Instruction. Instructions 1, 2, and 4 to Item 8 shall be applicable to this item. ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR. N/A If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: As of _______(Insert date within 31 days). Col. A Col. B Col. C Col. D ================================================================================================================= Title of Issuer Amount Owned Beneficially or Held as Percentage of Class and Title of Amount Collateral security for obligations in Default Represented by Amount Given Class outstanding by Trustee in Col. C ================================================================================================================= Data data data Data

Instruction. Instructions 1, 2 and 4 to Item 8 shall be applicable to this item. ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR. N/A If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such person any of which are so owned or held by the trustee: As of ________(Insert date within 31 days). Col. A Col. B Col. C Col. D ========================================================================================================================= Title of Issuer and Amount Amount Owned Beneficially or Held as Percentage of Class Represented Title of Class outstanding Collateral in Default by Trustee by Amount Given in Col. C ========================================================================================================================= Data data Data data

Instruction. Instructions 1, 2 and 4 to Item 8 shall be applicable to this item. ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE. N/A Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: As of ________(Insert date within 31 days). Col. A Col. B Col. C ============================================================== Nature of indebtedness Amount outstanding Date Due ============================================================== data Data data

Instructions 1. No information need be provided as to: a. the ownership of securities issued under any indenture, or any security or securities having a maturity of more than one year at the time of acquisition by the indenture trustee; b. disbursements made in the ordinary course of business in the capacity of trustee of an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; c. indebtedness created as a result of services rendered or premises rented; or indebtedness created as a result of goods or securities sold in a cash transaction; d. the ownership of stock or of other securities of a corporation organized under Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of an obligor upon the indenture securities; or e. the ownership of any drafts, bills of exchange, acceptances, or obligations which fall within the classification of self-liquidating paper. 2. Information should be given as to the general type of indebtedness, such as lines of credit, commercial paper, long-term notes, mortgages, etc. ITEM 13. DEFAULTS BY THE OBLIGOR. NONE a. State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. b. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS. NONE If any underwriter is an affiliate of the trustee, describe each such affiliation. Instructions. 1. The term "affiliate" as defined in Rule 0-2 of the General Rules and Regulations under the Act. Attention is directed to Rule 7a-26. 2. Include the name of each such affiliate and the names of all intermediate affiliates, if any. Indicate the respective percentage of voting securities or other bases of control giving rise to the affiliation. ITEM 15. FOREIGN TRUSTEE. N/A Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. ITEM 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this statement of eligibility. Instructions. Subject to Rule 7a-29 permitting incorporation of exhibits by reference, the following exhibits are to be filed as a part of the statement of eligibility of the trustee. Such exhibits shall be appropriately lettered or numbered for convenient reference. Exhibits incorporated by reference may be referred to by the designation given in the previous filing. Where exhibits are incorporated by reference, the reference shall be made in the list of exhibits called for under Item 16. If the certificate of authority to commence business (Exhibit 2) and/or the certificate to exercise corporate trust powers (Exhibit 3) is contained in another exhibit, a statement to that effect shall be made, identifying the exhibit in which such certificates are included. If an applicable exhibit is not in English, a translation in English shall also be filed. In response to Exhibit 7, foreign trustees shall provide financial information sufficient to provide the information required by Section 310(a)(2) of the Act. 1. A copy of the articles of association of the trustee as now in effect. See Attached 2. A copy of the certificate of authority of the trustee to commence business, if not contained in the articles of association. See #1 Above 3. A copy of the authorization of the trustee to exercise corporate trust powers, if such authorization is not contained in the documents specified in paragraph (1) or (2) above. See #1 Above 4. A copy of the existing bylaws of the trustee, or instruments corresponding thereto. See Attached 5. A copy of each indenture referred to in Item 4, if the obligor is in default. N/A 6. The consents of United States institutional trustees required by Section 321(b) of the Act. See Attached 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. See Attached 8. A copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. N/A 9. Foreign trustees are required to furnish a consent to service of process on Form F-X. N/A SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, SouthTrust Bank, a banking corporation organized and existing under the laws of the State of Alabama, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Atlanta, and State of Georgia, on the 17th day of October, 2001 SouthTrust Bank --------------- (Trustee) By: /s/Thomas E. Clower --------------------------------------- Thomas E. Clower - Vice President and Trust Officer ITEM 1 GENERAL INFORMATION Furnish the following information as to the trustee - Name and address of each examining or supervising authority to which it is subject. State of Alabama State Banking Department Montgomery, AL Federal Reserve Bank of Atlanta Atlanta, GA Federal Deposit Insurance Corporation Washington, D.C. 1 ITEM 16, #1 ARTICLES OF INCORPORATION OF SOUTHTRUST BANK, AN ALABAMA BANKING CORPORATION The undersigned, acting as incorporators under the Code of Alabama 1975, as amended, including, without limitation, the provisions of 5-7A-21 thereof, adopt the following Articles of Incorporation. ARTICLE 1 Name The name of the corporation shall be SouthTrust Bank. ARTICLE 2 Duration The duration of the corporation shall be perpetual, unless otherwise legally terminated. ARTICLE 3 Objects The objects or purposes for which the corporation is formed are: (a) To do all things necessary and incident to carrying on the business of banking and such business as is done by trust companies doing a banking business. (b) To discount bills, notes and other evidences of debt. (c) To receive and pay out deposits, with or without interest, and impose charges for services. (d) To receive on special deposit money, bullion, or foreign coins, or bonds or securities. (e) To buy and sell foreign and domestic exchanges, gold and silver bullion or foreign coins, bonds, bills of exchange, notes and other negotiable paper. 2 (f) To lend money on personal security or upon pledge of bonds, stocks or other negotiable security. (g) To take and receive security by mortgage, security agreement, or otherwise own property, real and personal. (h) To become trustee for any purpose and to be appointed and to act as executors, administrators, guardians, receivers or fiduciaries as provided by law. (i) To lease real and personal property upon the specific request of a customer. (j) To perform computer, management, and travel agency services for others. (k) To subscribe to the capital stock and become a member of the Federal Reserve System and to comply with the rules and regulations thereof. (l) To do any business and exercise any powers incident to the business of bank and trust companies doing a banking business. ARTICLE 4 Registered Office and Agent The address of the corporation's initial registered office shall be 420 North 20th Street, Birmingham, Jefferson County, Alabama 35203 and its initial agent at such address shall be John D. Buchanan. ARTICLE 5 Capital Accounts 5.1 The corporation's total authorized capital stock shall be $9,006,600.00, divided into 1,020,000 shares of common stock with a par value of eight dollars and eighty-three cents ($8.83) each. 5.2 The amount of capital, surplus and undivided profit with which the corporation will begin business as a state bank shall be $9,006,600 as capital stock, $1,722,348,855 as surplus, $1,634,759,842 as undivided profit and net unrealized gain (loss) on available for sale securities of ($141,831,404) for a total of $3,224,283,893. ARTICLE 6 Principal Office 3 The location of the principal office of the corporation in the State of Alabama shall be 420 North 20th Street, Birmingham, Jefferson County, Alabama 35203. ARTICLE 7 Powers The corporation shall possess all of the powers necessary and incident to the conduct the banking business and it is hereby vested with the necessary power to carry out the objects and purposes herein expressed in Article 3 hereof, and shall have all powers especially conferred upon its corporation by the laws of the State of Alabama, as well as those necessarily implied, together with the following additional powers: (a) To engage in business as a natural person may, not inconsistent with the provisions of law pertaining to the organization and regulation of a banking corporation in the State of Alabama. (b) To lend money and take security therefor, and to borrow money and give security therefor on any and all of the property of the corporation. (c) To buy, sell, lease, acquire, own, use and occupy real estate and personal property in any locality, in a legal manner, that may be necessary or convenient for the conduct and maintenance of a banking business. (d) To conduct for a reasonable time any business of each and every kind that might be necessary for it to conduct by virtue of the corporation having taken over such business as a result of a foreclosure of any mortgage or collateral security that might necessarily have taken over; provided, however, that said authority shall in no event continue or be exercised beyond such time as the Superintendent of Banks for the State of Alabama shall fix as the termination date for the reasonable exercise of the authority. (e) To accept deposits and payments on loans and other obligations as agent for other banks located in Alabama that are subsidiaries of the same bank holding company. (f) To exercise any power which a federally chartered or regulated bank could exercise (subject to the prior approval, if required, of the Superintendent of Banks for the State of Alabama). ARTICLE 8 Directors 8.1 The corporation's current Board of Directors consists of fourteen (14) persons, who shall serve until the next annual meeting of the shareholders and until their successors are elected and qualified. 8.2 Each director shall be the owner and holder of shares of stock in the corporation or its ultimate parent bank holding company, and each director shall hold at least two 4 shares in his or her name, unpledged and unencumbered in any way except for a statutory lien which might attach in favor of the corporation issuing such stock. 8.3 Not less than 75% of the directors of the corporation shall, during their whole term of service, be citizens of the United States. At least 51% of the directors of the corporation shall be residents of the State of Alabama. 8.4 The names and addresses of the members of the current Board of Directors are set forth below: (a) Julian W. Banton: SouthTrust Bank, National Association 420 North 20th Street, 4th Floor Birmingham, Alabama 35203 (b) Thomas E. Bradford, Jr.: Bradford & Company Post Office Box 278 Birmingham, Alabama 35201 (c) Ronald G. Bruno: Bruno Capital Management Corporation Bruno Capital Building 100 Grandview Place, Suite 500 Birmingham, Alabama 35243 (d) H. M. Burt, Jr.: 727 Hillyer High Road Anniston, Alabama 36207 (e) David J. Cooper: Cooper/T. Smith Corporation Post Office Box 1566 Mobile, Alabama 36633 (f) Sallie C. Creel: Thrifty Car Rental 3844 Brook Hollow Lane Birmingham, Alabama 35243 (g) James D. Davis: Jemison Investment Company, Inc. 2001 Park Place, Suite 320 Birmingham, Alabama 35203 (h) James C. Harrison: Protective Industrial Insurance Company 2300 11th Avenue North Birmingham, Alabama 35234 (i) Chris H. Horgen: Southeastern Technology Fund 207 Eastside Square Huntsville, Alabama 35801 (j) Judy M. Merritt: Jefferson State Junior College 2601 Carson Road Birmingham, Alabama 35215

5 (k) Thomas E. Mitchell: Stuart Construction Company, Inc. Post Office Box 579 Bay Minette, Alabama 36507 (l) William V. Muse: Auburn University 107 Samford Hall Auburn, Alabama 36849 (m) William E. Smith, Jr.: Royal Cup, Inc. 160 Cleage Drive Birmingham, Alabama 35217 (n) R. Neal Travis: 2120 Southwinds Circle Birmingham, Alabama 35244 ARTICLE 9 Incorporators 9.1 The name and address of the incorporators are as follows: (a) Julian W. Banton: SouthTrust Bank, National Association 420 North 20th Street, 4th Floor Birmingham, Alabama 35203 (b) Thomas E. Bradford, Jr.: Bradford & Company Post Office Box 278 Birmingham, Alabama 35201 (c) H. M. Burt, Jr.: 727 Hillyer High Road Anniston, Alabama 36207 (d) Sallie C. Creel: Thrifty Car Rental 3844 Brook Hollow Lane Birmingham, Alabama 35243 (e) James D. Davis: Jemison Investment Company, Inc. 2001 Park Place, Suite 320 Birmingham, Alabama 35203 (f) James C. Harrison: Protective Industrial Insurance Company 2300 11th Avenue North Birmingham, Alabama 35234

6 (g) Judy M. Merritt: Jefferson State Junior College 2601 Carson Road Birmingham, Alabama 35215 (h) William E. Smith, Jr.: Royal Cup, Inc. 160 Cleage Drive Birmingham, Alabama 35217 (i) R. Neal Travis: 2120 Southwinds Circle Birmingham, Alabama 35244

ARTICLE 10 By-Laws 10.1 The dates on which the shareholders' annual meeting shall be held, the number of directors and the terms of office of the officers, and the powers and duties of the officers shall be fixed by the by-laws of the corporation. 10.2 The corporation shall have power to make by-laws for the regulation and governance of the corporation, its agents, servants or officers, and for all other purposes not inconsistent with the Constitution and laws of the State of Alabama. ARTICLE 11 No Director Liability A director of the corporation shall have no liability to the corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except for liability for (A) the amount of a financial benefit received by a director to which he or she is not entitled; (B) an intentional infliction of harm on the corporation or the shareholders; (C) a violation of Alabama Code Section 10-2B-8.83, (D) liability imposed by any federal or state law or regulation or applicable regulatory agency; (E) an intentional violation of criminal law; or (F) a breach of the director's duty of loyalty to the corporation or its shareholders. 7 IN WITNESS WHEREOF, the undersigned incorporators set their names on the 19th day of May, 2000. /s/James D. Davis -------------------------------------------- /s/Julian W. Banton -------------------------------------------- /s/William E. Smith, Jr. -------------------------------------------- /s/H.M Burt, Jr. -------------------------------------------- /s/Sallie C. Creel -------------------------------------------- /s/R. Neal Travis -------------------------------------------- /s/Thomas E. Bradford, Jr. -------------------------------------------- /s/James C. Harrison -------------------------------------------- /s/Judy M. Merritt -------------------------------------------- EXHIBIT 25b STATE OF ALABAMA MONTGOMERY COUNTY CERTIFICATE OF APPROVAL TO CONVERT TO A STATE BANKING CORPORATION I, Norman B. Davis, Jr., as Superintendent of Banks, State of Alabama, do hereby certify that SouthTrust Bank, National Association, a national banking association, has fully complied with the provisions of (Sections) 5-7A-20 through 5-7A-24, Code of Alabama 1975, to convert to a state banking corporation with the name SouthTrust Bank and that SouthTrust Bank, the resulting bank, and all of its stockholders, officers and employees shall have the same powers and privileges and shall be subject to the same duties, liabilities and regulations, in all respects, as shall have been prescribed for banking corporations originally organized as banking corporations under the laws of the State of Alabama; and I do, therefore, authorize SouthTrust Bank, Birmingham, Alabama, a state banking corporation to transact business as a bank effective upon the filing of this Certificate and attached documents with the Judge of Probate of Jefferson County. I further certify that all proper business can be entrusted to said bank. Given under my hand and seal of office this the 5th day of June 2000. (SEAL) /s/ NORMAN B. DAVIS, JR. ------------------------ Norman B. Davis, Jr. Superintendent of Banks STATE OF ALABAMA MONTGOMERY COUNTY PERMIT TO BEGIN BUSINESS I, Norman B. Davis, Jr., as Superintendent of Banks, State of Alabama, do hereby certify that SouthTrust Bank, Birmingham, Alabama, has duly complied with all requirements of law relating to the organization of a bank under the laws of the State of Alabama, and I do, therefore, authorize it to transact business as a bank, and I further certify that it is authorized to conduct and operate a trust department. Given under my hand and seal of office this the 5th day of June 2000. /s/ Norman B. Davis, Jr. ----------------------- Norman B. Davis, Jr. Superintendent of Banks STATE OF ALABAMA MONTGOMERY COUNTY I, Norman B. Davis, Jr., as Superintendent of Banks, State of Alabama, do hereby certify that the foregoing is a true and correct copy of the Certificate as the same appears on file and of record in this office. /s/ Norman B. Davis, Jr. ----------------------- Norman B. Davis, Jr. Superintendent of Banks [SEAL] State of Alabama - Jefferson County I certify this Instrument filed on: 2000 Jun 06 P.M. 14:58 Recorded and $ Mtg. Tax and $ Deed Tax and Fee Amt. $36.00 Total $36.00 GEORGE R. REYNOLDS, Judge of Probate 200006/8530 State of Alabama Jefferson County I, the Undersigned, as Judge of Probate in and for said County, in said State, hereby certify that the foregoing is a full, true and correct copy of the instrument with the filing of same as appears of record in this office in vol. 200006 page 8530. Given under my hand and official seal, this the 6th day of June, 2000. /s/ Michael F. Bolin --------------------------------- Judge of Probate STATE OF ALABAMA I, Jim Bennett, Secretary of State of the State of Alabama, having custody of the Great and Principal Seal of said State, do hereby certify that pursuant to the provisions of Section 10-2B-4.02, Code of Alabama 1975, and upon an examination of the corporation records on file in this office, the following corporate name is reserved as available: SouthTrust Bank This domestic corporation name is proposed to be incorporated in Jefferson County and is for the exclusive use of Frederic L. Smith Jr, 2001 Park Place, Ste 1400, Birmingham, AL 35203 for a period of one hundred twenty days beginning June 6, 2000 and expiring October 5, 2000. In Testimony Whereof, I have hereunto set my hand and affixed the Great Seal of the State, at the Capitol, in the City of Montgomery, on this day. June 6, 2000 ------------------------------------------------- Date (Alabama Great Seal) /s/ Jim Bennett ------------------------------------------------- Jim Bennett Secretary of State STATE OF ALABAMA I, Jim Bennett, Secretary of State of the State of Alabama, having custody of the Great and Principal Seal of said State, do hereby certify that as appears on file and of record in this office, the pages hereto attached, contain a true, accurate and literal copy of articles of incorporation of SouthTrust Bank as received and filed in the office of the Secretary of State of Alabama, showing the date of incorporation as June 6, 2000. I further certify that the records do not disclose that said SouthTrust Bank has been dissolved. In Testimony Whereof, I have hereunto set my hand and affixed the Great Seal of the State, at the Capitol, in the City of Montgomery, on this day. [Alabama Great Seal] 06/29/00 -------------------------------------------- Date /s/ Jim Bennett -------------------------------------------- Jim Bennett Secretary of State ITEM 16, #4 BYLAWS OF SOUTHTRUST BANK an Alabama Banking Corporation TABLE OF CONTENTS Article I. Offices..............................................................1 Article II. Shareholders.........................................................1 Section II.1 Annual Meetings..............................................1 Section II.2 Special Meetings.............................................1 Section II.3 Place of Meetings............................................1 Section II.4 Action by Shareholders Without a Meeting.....................1 Section II.5 Notice of Meetings...........................................2 Section II.6 Waiver of Notice.............................................2 Section II.7 Record Date..................................................3 Section II.8 Shareholders' List for Meeting...............................3 Section II.9 Voting Entitlement of Shares.................................3 Section II.10 Proxies......................................................4 Section II.11 Corporation's Acceptance of Votes............................4 Section II.12 Conduct of Meeting...........................................5 Section II.13 Quorum.......................................................5 Section II.14 Voting for Directors; Cumulative Voting......................6 Article III. Board of Directors...................................................6 Section III.1 General Powers...............................................6 Section III.2 Number, Tenure and Qualifications............................6 Section III.3 Oath of Directors............................................7 Section III.4 Resignation of Directors.....................................7 Section III.5 Removal of Directors by Shareholders.........................7 Section III.6 Vacancy on Board.............................................7 Section III.7 Compensation of Directors....................................8 Section III.8 Meetings.....................................................8 Section III.9 Action Without Meeting.......................................8 Section III.10 Notice of Meeting............................................9 Section III.11. Waiver of Notice.............................................9 Section III.12 Quorum and Voting............................................9 Section III.13 Committees of Directors.....................................10 Section III.14 Director Emeritus...........................................13 Section III.15 Area Boards.................................................14 Article IV. Officers............................................................15 Section IV.1 Positions...................................................15 Section IV.2 Election and Term of Office.................................15 Section IV.3 Vacancies...................................................15 Section IV.4 Resignation and Removal of Officers.........................15 Section IV.5 Contract Rights of Officers.................................15 Section IV.6 Duties of Officers..........................................15 Section IV.7 Compensation................................................17

i Article V. Conveyances, Transfers and Contracts................................17 Section V.1 Conveyances, Etc............................................17 Section V.2 Receipts, Checks, Drafts and Warrants.......................17 Section V.3 Trust Department Activities.................................18 Section V.4 Seal........................................................18 Article VI. Borrowings..........................................................18 Section VI.1 Borrowings; Collateral for Borrowings.......................18 Section VI.2 Time or Interest Bearing Certificates of Deposit............18 Article VII. Certificates Representing Shares....................................19 Section VII.1 Certificates Representing Shares............................19 Section VII.2 Legends on Certificates.....................................19 Section VII.3 Transfer of Shares..........................................19 Section VII.4 Lost, Stolen, Destroyed, or Mutilated Certificates..........20 Article VIII. Indemnification of Directors, Officers and Employees................20 Section VIII.1 Indemnification.............................................20 Section VIII.2 Insurance...................................................21 Section VIII.3 Survival of Right...........................................21 Article IX. General.............................................................21 Section IX.1 Fiscal Year.................................................21 Section IX.2 Surplus; Restriction of Dividends...........................21 Section IX.3 Checks......................................................22 Section IX.4 Corporate Seal..............................................22 Section IX.5 Voting of Corporation's Securities..........................22 Section IX.6 Loans, Gifts, Favors, Etc. to Banking Department Employees from the Corporation, Employees, Etc., Prohibited...........22 Section IX.7 Semi-Annual Report..........................................23 Section IX.8 Loans.......................................................23 Section IX.9 Bonds.......................................................23 Section IX.10 Purchase of Corporate Stock.................................23 Section IX.11 Articles of Incorporation...................................24 Article X. Amendment of Bylaws.................................................24 Section X.1 Amendment by Board of directors or Shareholders.............24 Section X.2 Bylaw Increasing Quorum or Voting Requirement for Shareholders................................................24 Section X.3 Bylaw Increasing Quorum or Voting Requirement for Directors...................................................24 Article XI. Emergency Preparedness Program......................................25

ii BYLAWS OF SOUTHTRUST BANK an Alabama Banking Corporation Article I. Offices The main office of the corporation shall be located in Birmingham, Alabama. The corporation may have such other offices, within and without the State of Alabama, as the board of directors may determine or as the business of the corporation may require. The registered office of the corporation, required by the Alabama Business Corporation Act to be maintained in the State of Alabama, may but need not be the same as its main office in the State of Alabama. The corporation may change its registered office from time to time in the manner specified by the Alabama Business Corporation Act. The corporation may change its main office from time to time in the manner specified by the Alabama Banking Code. Article II. Shareholders Section II.1 Annual Meetings. The annual meeting of the shareholders of the corporation, commencing with the year 2001, shall be held on the third Tuesday of January in each year if not a legal holiday in the State of Alabama, and if a legal holiday, then on the next succeeding business day not a legal holiday, at 10:00 a.m., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors shall not be held on the day designated herein for the annual meeting of the shareholders, or at any adjournment thereof, the board of directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as may be conveniently held. Section II.2 Special Meetings. Special meetings of the shareholders may be called by the board of directors, the chairman of the board, the president or the holders of at least 10 percent of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting in the manner specified by the Alabama Business Corporation Act. Section II.3 Place of Meetings. Annual and special meetings shall be held at the main office of the corporation in the State of Alabama, or at such other place, within or without the State of Alabama, as may be designated by the board of directors or the person or persons calling the meeting and stated in the notice of the meeting. Section II.4 Action by Shareholders Without a Meeting. Action required or permitted by the Constitution of Alabama or the Alabama Business Corporation Act to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all shareholders entitled to vote on the action. The action shall be evidenced by one or more written consents describing the action taken, signed by all the shareholders entitled to vote on the action, and delivered to the corporation for inclusion in the minutes or filing with the corporate records. 1 Section II.5 Notice of Meetings (a) The corporation, or, in the case of a special meeting called by the holders of at least 10 percent of all the votes entitled to be cast on any issue proposed to be considered at the special meeting, the holders calling the meeting, shall notify shareholders in writing of the date, time, and place of each annual and special shareholders' meeting no fewer than 10 nor more than 60 days before the meeting date except as otherwise required by the Alabama Banking Code. Unless the Alabama Business Corporation Act or the articles of incorporation require otherwise, the corporation, or other persons calling the meeting, are required to give notice only to shareholders entitled to vote at the meeting. Notwithstanding the provisions of this section or any other provisions of the Alabama Business Corporation Act, the stock or bonded indebtedness of the corporation shall not be increased at a meeting unless notice of such meeting shall have been given as may be required by Section 234 of the Constitution of Alabama as the same may be amended from time to time. Without limitation, deposits accepted by the corporation, whether insured or secured, shall not be deemed bonded indebtedness. (b) Notice of an annual meeting need not include a statement of the purpose or purposes for which the meeting is called. (c) Notice of a special meeting shall include a statement of the purpose or purposes for which the meeting is called. (d) If not otherwise fixed in the manner specified under the Alabama Business Corporation Act, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the day before the first notice is delivered to shareholders. (e) If an annual or special shareholders' meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed in the manner specified under the Alabama Business Corporation Act, however, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date. Section II.6 Waiver of Notice. A shareholder may waive any notice required by the Constitution of Alabama, the Alabama Business Corporation Act, the Alabama Banking Code, the articles of incorporation, or these bylaws before or after the date and time stated in the notice. Execution of a unanimous action by written consent by shareholders shall be deemed to include a waiver of notice of a meeting. The waiver shall be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records. A shareholder's attendance at a meeting: (a) waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and 2 (b) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter before action is taken on the matter. Section II.7 Record Date. The board of directors may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action. A record date may not be more than 70 days before the meeting or action requiring a determination of shareholders. A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. Section II.8 Shareholders' List for Meeting. After fixing a record date for a meeting, the corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. The list shall be arranged by voting group (and within each voting group by class or series of shares) and show the address of and number of shares held by each shareholder. The shareholders' list shall be available for inspection by any shareholder, beginning two business days after notice of the meeting is given for which the list was prepared and continuing through the meeting, at the corporation's main office or, if the corporation's main office is located outside the State of Alabama, at its registered office. A shareholder, his or her agent, or attorney is entitled on written demand to inspect and, for a proper purpose, to copy the list, during regular business hours and at his or her expense, during the period it is available for inspection. The corporation shall make the shareholders' list available at the meeting, and any shareholder, his or her agent, or attorney is entitled to inspect the list at any time during the meeting or any adjournment. Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting. The stock transfer records of the corporation shall be prima facie evidence as to who are the shareholders entitled to examine the shareholders' list or transfer records or to vote at any meeting of shareholders. Section II.9 Voting Entitlement of Shares. (a) Subject to subsections (b) and (c) of this section, each outstanding share, regardless of class, is entitled to one vote on each matter submitted to a vote at a shareholders' meeting. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the corporation the pledgor has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Only shares are entitled to vote. (b) The shares of the corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation, unless a court of competent jurisdiction determines that the voting of such shares is not for the purpose of perpetuation of management or other improper purpose. 3 (c) Subsection (b) of this section does not limit the power of a corporation to vote any shares, including its own shares, held by it in a fiduciary capacity. (d) Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares. Section II.10 Proxies. A shareholder may vote in person or by proxy. A shareholder may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form, either personally or by the shareholder's attorney-in-fact. An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is expressly provided in the appointment form. An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. The revocation of an appointment or the death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the revocation, death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment. An appointment made irrevocable under this section is revoked when the interest with which it is coupled is extinguished. Section II.11 Corporation's Acceptance of Votes. If the name signed on a vote, consent, waiver or proxy appointment corresponds to the name of a shareholder, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if: (a) the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity; (b) the name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; (c) the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of his or her status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment; (d) the name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; or 4 (e) two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all co-owners. The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder. The corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the shareholder for the consequences of the acceptance or rejection. Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise. Section II.12 Conduct of Meeting. (a) Except as to matters approved unanimously by voice vote of the shareholders and votes concerning matters deemed to be procedural or administrative in character by the chairman of the meeting, all votes of shareholders shall be cast by written ballot of the shareholders on such forms as may be prescribed by the board of directors of the corporation or, in the absence thereof, the chairman of the meeting. (b) All meetings of shareholders shall be presided over by a chairman who shall be the chairman of the board of directors of the corporation, or in his absence, the president of the corporation, or the designee of such person. The chairman of the meeting shall conduct the meeting in a reasonable and orderly fashion and shall have the discretion to adopt such rules of, and make determinations as to, parliamentary procedure as he deems necessary or appropriate. Not limiting the foregoing, the chairman of the meeting shall have the discretion to determine matters which may be properly brought before the meeting, to establish agendas for the meeting, to recognize speakers and to reasonably limit time for debate. Section II.13 Quorum. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the Alabama Business Corporation Act provides otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter, but in no event shall a quorum consist of less than one-third of the votes entitled to be cast on the matter by the voting group. Once a share is represented for any purpose at a meeting, it is, unless established to the contrary, presumed present for quorum purposes for the remainder of the meeting. If a quorum is present when a vote is taken, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the Constitution of Alabama as the same may be amended from time to time, the articles of incorporation, or the Alabama Business Corporation Act require a greater number of affirmative votes. An amendment of articles of incorporation adding, changing, or deleting a quorum or voting requirement for a voting group greater than specified must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater. 5 Section II.14 Voting for Directors; Cumulative Voting. Directors are elected by a majority of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present when the vote is taken. Shareholders shall not have the right to cumulate their votes for directors. Article III. Board of Directors. Section III.1 General Powers. All corporate powers shall be exercised by or under authority of, and the business and affairs of the corporation managed under the direction of, its board of directors, subject to any limitation set forth in the articles of incorporation or a shareholder agreement authorized under the Alabama Business Corporation Act. Section III.2 Number, Tenure and Qualifications. (a) The directors constituting the current board of directors are set forth in the articles of incorporation, and the members of the board shall hold office until the first annual meeting of shareholders following the adoption of these bylaws and until their successors shall have been elected and qualified. Thereafter, the number of directors constituting the board of directors shall be not less than five nor more than twenty-five, the exact number to be determined by resolution of the board of directors. After shares are issued, only the shareholders may change the range for the size of the board or change from a fixed to a variable-range size board or vice versa. (b) The directors have the power to fix or change the number of directors; and the directors may increase or decrease by 30 percent or less the number of directors last approved by the shareholders, but only the shareholders may increase or decrease by more than 30 percent the number of directors last approved by the shareholders. (c) Directors shall hold office until the next succeeding annual meeting of shareholders and until their successors shall have been elected and qualified. (d) A director shall be a natural person of the age of at least nineteen (19) years. Not less than seventy-five percent (75%) of the directors of the corporation shall, during their whole term of service, be citizens of the United States At least fifty-one percent (51%) of the directors of the corporation must be residents of the State of Alabama. Each director shall be the owner and holder of at least two shares of stock in the corporation, or its ultimate parent bank holding company, in his or her own name, and such shares must not be pledged or encumbered in any way except for statutory lien which might attach in favor of the corporation. No person convicted of a felony or a crime involving moral turpitude shall serve as a director. (e) In applicable circumstances, persons standing for election as directors shall receive the prior approval of the primary federal regulator of the corporation. (f) Any director of the corporation or any member of any Area Board (as defined in Section 3.15 of these bylaws) who has reached his or her 68th birthday or who has retired from his or her principal business position or occupation will not be eligible for re-election as director or as a member of a Area Board; provided, however, that the foregoing provision relating to retirement from such person's principal business position or occupation shall not apply to any director who has served as chairman of the board of the corporation. 6 Section III.3 Oath of Directors. Every director shall, within thirty (30) days after his election, take and subscribe, in duplicate, an oath that he will diligently and honestly perform his duties as such director, not knowingly violate or permit to be violated any provision of the banking law of the State of Alabama and that he is the owner in good faith of the shares of stock of the corporation, or its ultimate parent bank holding company, required to qualify him for such office, standing in his own name on such corporation's books. A copy of such oath shall be filed with the Superintendent of Banks of the State of Alabama. No director shall perform the duties of his office until such oath is made, and in case a director fails to make such oath, his place on the board of directors shall be declared vacant and his successor elected as prescribed by these bylaws, such successor being required to have the same qualifications and take the same oath as provided by this Article. Section III.4 Resignation of Directors. A director may resign at any time by delivering written notice to the board of directors, the chairman of the board of directors, or to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. Section III.5 Removal of Directors by Shareholders. The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him or her. A director may be removed only if the number of votes cast to remove him or her exceeds the number of votes cast not to remove him or her. A director may be removed by the shareholders only at a meeting called for the purpose of removing him or her and the meeting notice must state that the purpose, or one of the purposes, of the meeting is the removal of the director or by a unanimous action by written consent of the shareholders. Section III.6 Vacancy on Board. If a vacancy occurs on a board of directors: (a) The shareholders may fill the vacancy, whether resulting from an increase in the number of directors or otherwise; or (b) The board of directors may fill the vacancy, except that the directors shall have the power to fill a vacancy resulting from an increase in the number of directors only if expressly provided for in the articles of incorporation; or (c) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy, if it is one that the directors are authorized to fill, by the affirmative vote of a majority of all the directors remaining in office. If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders. A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date as provided by the Alabama Business Corporation Act or otherwise) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs. 7 Section III.7 Compensation of Directors. Each director of the corporation who is not an officer or employee of the corporation shall be entitled to an attendance fee for each meeting of the board of directors and a quarterly retainer fee, the amount of such fees to be established from time to time by the Human Resources Committee of the board of directors. Section III.8 Meetings. The board of directors may hold regular or special meetings within or without the State of Alabama. The board of directors shall hold regular meetings at such time as may be fixed by the directors. Unless the articles of incorporation provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct a meeting through the use of, any means of communication by which all participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present. (a) Directors' First Meeting of Each Year. The board of directors, at their first meeting after their election by the shareholders at the annual meeting, shall fix and prescribe the amount of bond that shall be required of each officer and employee of the bank, and such amount shall not be less than the amount that may have been fixed or that may be hereafter fixed by the Superintendent of Banks of the State of Alabama for officers and employees of banks of the class to which the corporation belongs. (b) Superintendent Called Meetings. Anything contained in these bylaws or in the articles of incorporation to the contrary notwithstanding, meetings of the board of directors may be called by the Superintendent of Banks of the State of Alabama and held at any time and place he or she requires. Section III.9 Action Without Meeting. Action required or permitted by the Alabama Business Corporation Act to be taken at a board of directors' meeting may be taken without a meeting if the action is taken by all members of the board. The action shall be evidenced by one or more written consents describing the action taken, signed by each director, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date. A consent signed under this section has the effect of a meeting vote and may be described as such in any document. Section III.10 Notice of Meeting. (a) A regular meeting of the board of directors may be held without notice immediately after, and at the same place as, the annual meeting of shareholders. Other regular meetings may be held upon such notice and at such time and place as shall be determined by the board. (b) Special meetings of the board of directors shall be preceded by reasonable advance notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting. Notice may be given in writing or in person or by telegram, telephone, facsimile or other reasonable means. Section III.11. Waiver of Notice. 8 (a) A director may waive any notice required by the Alabama Business Corporation Act, the Alabama Banking Code, the articles of incorporation, or these bylaws before or after the date and time stated in the notice. Except as provided by subsection (b) of this section, the waiver must be in writing, signed by the director entitled to notice, and filed with the minutes or corporate records. (b) A director's attendance at or participation in a meeting: (1) waives objection to lack of any required notice to him or her or defective notice of the meeting unless the director at the beginning of the meeting (or promptly upon his or her arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting; and (2) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the director objects to considering the matter before action is taken on the matter. Section III.12 Quorum and Voting. A quorum of the board of directors consists of: (a) a majority of the fixed number of directors if the corporation has a fixed board size; or (b) a majority of the fixed number of directors prescribed, or if no number is prescribed the number in office immediately before the meeting begins, if the corporation has a variable-range size board. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors. A director is, unless established to the contrary, presumed present for quorum purposes for the remainder of a meeting at which he or she has been present for any purpose. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless: (1) he or she objects at the beginning of the meeting (or promptly upon his or her arrival) to holding it or transacting business at the meeting or, as to a matter required under the articles of incorporation or these bylaws to be included in the notice of the purpose of the meeting, he or she objects before action is taken on the matter; (2) his or her dissent or abstention from action taken is entered in the minutes of the meeting; or (3) he or she delivers written notice of his or her dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken. Section III.13 Committees of Directors. The board of directors may create one or more committees and appoint members of the board of directors to serve on them. Each committee may have one or more members, who serve at the pleasure of the board of directors. The creation of a committee and appointment of members to it shall be approved by the greater of (1) a majority of all the directors in office when the action is taken or (2) the number of 9 directors required by the articles of incorporation or these bylaws to take such action. The provisions of the articles of incorporation and these bylaws which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the board of directors, apply to committees and their members as well. To the extent specified by the board of directors or in the articles of incorporation or these bylaws, each committee may exercise the authority of the board of directors. A committee may not however: (1) authorize shareholder distributions; (2) approve or propose to shareholders action that the Alabama Business Corporation Act requires be approved by shareholders; (3) fill vacancies on the board of directors or on any of its committees; (4) amend the articles of incorporation; (5) adopt, amend, or repeal bylaws; (6) approve a plan of merger not requiring shareholder approval; (7) authorize or approve reacquisition of shares, except according to formula or method prescribed by the board of directors; or (8) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except that the board of directors may authorize a committee (or a senior executive officer of the corporation) to do so within limits specifically prescribed by the board of directors. Such committees shall include, but shall not be limited to, the following: EXECUTIVE COMMITTEE. The board of directors shall, at its initial meeting after its election in each year, elect from among their number a committee of three or more who, with the chairman of the board and the president of the corporation, shall constitute the Executive Committee of the board of directors. Each member of the Executive Committee shall serve for the ensuing year and until his or her successor is elected and shall qualify; provided, however, that any member of the Executive Committee may be removed, with or without cause, at any time by the board of directors. All vacancies in said Committee shall be filled by the board of directors. The chairman of the board of directors and the president of the corporation shall be members of the Committee and shall have the power to vote with respect to all matters coming before the Executive Committee. The Executive Committee shall meet at such times as it may decide. It shall keep a separate book of minutes of its proceedings and actions, and make reports to the board of directors, from time to time, of its actions. All the powers of the board of directors when the board is not in session may be exercised by the Executive Committee, except such powers as are prohibited by Section 3.13 above. Unless otherwise provided by resolutions duly adopted by the board of directors, a majority of the Executive Committee shall constitute a quorum for the transaction of business. The Executive Committee shall review all loans when the total liability of the borrower exceeds an established amount, which amount is to be determined and set by the board of directors from time to time. All persons appointed or elected to office by the Executive Committee shall hold their respective offices only until the next annual meeting of the board of directors. 10 Each member of the Executive Committee, except salaried officers of the corporation, shall be entitled to an attendance fee for each meeting of the Committee, the amount of such fee to be established by the board of directors. AUDIT AND EXAMINATION COMMITTEE. The board of directors shall, at its initial meeting after its election in each year, elect from among its number a committee of three or more who constitute the Audit and Examination Committee of the board of directors. No member of the Audit and Examination Committee shall be an officer or employee of the corporation or shall be a member of the Trust Policy Committee. Each member of the Audit and Examination Committee shall serve until his or her successor is elected and shall qualify; provided, however, that any member of the Audit and Examination Committee may be removed, with or without cause, at any time by the board of directors of the corporation. The Audit and Examination Committee shall make suitable examinations every six months of the affairs of the corporation. The result of such examination shall be reported in writing to the board of directors at the next regular meeting thereafter, stating whether the corporation is in a sound and solvent condition, whether adequate internal audit controls and procedures are being maintained, and recommending to the board such changes in the manner of doing business, etc. as shall be deemed advisable. The Audit and Examination Committee, upon its own recommendation and with the approval of the board of directors, may employ a qualified firm of Certified Public Accountants to make an examination and audit of the corporation. If such a procedure is followed, the one annual examination and audit of such firm of accountants and the presentation of its report to the board of directors will be deemed sufficient to comply with the requirements of this section of these bylaws. At least once during each calendar year and as often as required by regulations, the Audit and Examination Committee shall make suitable audits of the Trust and Financial Services Division or cause suitable audits to be made by auditors responsible only to the board of directors and, at such time, shall ascertain whether the Trust and Financial Services Division has been administered in accordance with law, appropriate regulations and sound fiduciary principles. In lieu of such periodic audits, the board of directors may elect to adopt an adequate continuous audit system. A report of the audits and examinations, together with the action taken thereon, shall be noted in the minutes of the board of directors. Each member of the Audit and Examination Committee, except salaried officers, shall be entitled to an attendance fee for each meeting of the Committee, the amount of such fee to be established by the Human Resources Committee of the board of directors. TRUST POLICY COMMITTEE. The board of directors shall, at its initial meeting after its election in each year, elect from among its number a committee of four or more directors, who are not officers or employees of the corporation, who shall constitute the Trust Policy Committee. Each member of the Trust Policy Committee shall serve for the ensuing year and until his or her successor is elected and shall qualify; provided, however, that any member of the Trust Policy Committee may be removed, with or without cause, at any time by the board of directors of the corporation. The Trust Policy Committee shall be responsible for the formulation of policy with respect to all fiduciary functions exercised by the Trust and Financial Services Division and 11 shall take all such action as, in its judgment, may be necessary to insure the proper functioning of the Trust and Financial Services Division in matters pertaining to trust administration, investments, operations and new business development. The Trust Policy Committee shall from time to time receive information reflecting the implementation of its decisions and shall have authority to establish standing or ad hoc committees for the purpose of carrying out policies formulated by it. The Trust Policy Committee shall review the affairs of the Trust and Financial Services Division on an annual basis and, if appropriate, make recommendations with respect thereto. The Trust Policy Committee may authorize any one or more of its members, or officers assigned to the Trust and Financial Services Division, to grant prior approval of the acceptance of any or all appointments of the corporation in a fiduciary capacity and to cause the granting of each such prior approval to be made a matter of written record. The Trust Policy Committee shall have such other and further duties as may from time to time be assigned to it by the board of directors. All investments of trust funds shall be made, retained or disposed of in accordance with policies, procedures or practices established or approved by the Trust Policy Committee, or with the express approval of the Trust Policy Committee, and the Trust Policy Committee shall keep minutes of all of its meetings showing the disposition of all matters considered and passed upon by it. At least once during each period of twelve months, the Trust Policy Committee shall review, or cause to be reviewed, all the assets held in or for each fiduciary account for which the Trust and Financial Services Division is charged with investment responsibility in order to determine the safety and current value of such accounts and the feasibility of retaining or disposing of them. The Trust Policy Committee shall fix the time for its regular meetings (to be held at least quarterly), provide for the call of special meetings and may adopt rules of procedure. Unless otherwise provided by a resolution duly adopted by the board of directors, the majority of the Trust Policy Committee shall constitute a quorum for the transaction of business. Each member of the Trust Policy Committee shall be entitled to an attendance fee for each meeting of the Trust Policy Committee, the amount of such fee to be established by the board of directors. 12 HUMAN RESOURCES COMMITTEE. The board of directors shall, at its initial meeting after its election in each year, elect from among its number a committee of three or more members who shall constitute the Human Resources Committee. Each member of the Human Resources Committee shall serve for the ensuing year and until his or her successor is elected and shall qualify; provided, however, that any member of the Human Resources Committee may be removed, with or without cause, at any time by the board of directors of the corporation. The Human Resources Committee shall monitor, on behalf of the board of directors, management's performance in providing the management and manpower requirements for the proper functioning and progress of the corporation and shall counsel with management; the Human Resources Committee shall review plans for management succession, management training and management development programs; the Human Resources Committee shall review (and, if directed by the board of directors, establish) salary and wage administration procedures, including current ranges and surveys; approve any major deviation from established salary and wage levels; review compliance with applicable regulations; approve (and, if directed by the board of directors, establish) compensation of the principal executive officers, considering the recommendation of the Chairman of the Board, and in the case of the Chief Executive Officer's salary, considering the recommendation of the Chairman or President of SouthTrust Corporation; establish directors' fees; review and recommend proposed new board members; review employee relation plans and activities; and establish a budget for contributions and review management's recommendations for individual contributions. Each member of the Human Resources Committee shall be entitled to an attendance fee for each meeting of the Human Services Committee, the amount of such fee to be established by the board of directors. The board of directors also may appoint, from time to time, such other committees, including temporary committees, for such purposes and with such powers as the board of directors may determine, and may establish such attendance fees for the members of such other committees as the board of directors may determine. The persons constituting the entire membership of any committee provided for or created pursuant to the bylaws may be increased by the board of directors whenever it sees fit. In the case of any such increase in the membership of any such committee, the board of directors may fix the term of service on any committee of any person elected to fill a vacancy created by any such increase. Section III.14 Director Emeritus. A director of the corporation is eligible for election as a director emeritus if such person is ineligible for re-election as a director of the corporation under Section III.3.2(f) above or if such person has served as a director of the corporation for at least five years and voluntarily declines to stand for re-election as a director. Immediately following each annual meeting of shareholders, or from time to time as the board of directors may determine, the board of directors, in its discretion, may elect one or more eligible persons to serve as a director emeritus for the ensuing year or until his or her successor is elected and shall qualify. Notwithstanding the foregoing, the board of directors of the corporation may remove, with or without cause, a director emeritus from office at any time. If requested by the board of directors, a director emeritus may attend meetings of the board of directors, but shall not have voting power or power of final decision on any matter concerning the business or affairs of 13 the corporation, and his or her presence at any meeting of the board of directors shall not be counted in the determination of a quorum. A director emeritus shall not have the same responsibilities and liabilities imposed by law and banking regulation upon members of the board of directors. A director emeritus shall receive such fees as the board of directors may from time to time determine. A director emeritus shall not be required to own qualifying shares of the corporation or its ultimate parent bank holding company. Section III.15 Area Boards. From time to time as the Chief Executive Officer of each city or other geographical area in which the corporation transacts business may determine, such Chief Executive Officer may name persons to serve as advisory or honorary members of the board of directors, with respect to such geographical area (each advisory or honorary board being hereinafter referred to as the "Area Board"). Members of each Area Board shall be named to serve for the ensuing year and until their successors are named. Notwithstanding the foregoing, the Chief Executive Officer of the city or other geographical area served by an Area Board may remove, with or without cause, any member of such Area Board at any time. The members of the Area Boards shall assist the board of directors and the officers of the corporation in business development, with particular emphasis being placed upon business development in the city or other geographical area with respect to which such members have been designated, and shall have such other duties and functions as the appropriate Chief Executive Officer shall determine; provided, however, that the members of the Area Boards shall not have power of final decision on any matter concerning the business or affairs of the corporation. If requested by the board of directors, the members of the Area Boards shall attend meetings of the board of directors of the corporation, but shall not have voting power, and the presence of any Area Board member at any meeting of the board of directors shall not be counted in the determination of a quorum. Members of the Area Boards shall not be deemed to have the responsibilities and liabilities imposed upon directors of the corporation by law and banking regulations. Members of the Area Boards may receive such fees as the Human Resources Committee of the board of directors may from time to time determine. The members of each Area Board shall not be required to own qualifying shares of the corporation or its ultimate parent bank holding company. The provisions of the articles of incorporation and the bylaws of the corporation governing the conduct of meetings of the board of directors, including, without limitation, the time and place of any such meeting, the power to convene or call a meeting, the giving of notice of any meeting, and the quorum and voting requirements thereof, shall apply to each Area Board, and meetings and other business of each Area Board shall be convened and conducted in accordance with such provisions. The Chief Executive Officer of the city or other geographical area for which any Area Board is established shall serve as a member of any such Area Board. In addition, subject to the other notice provisions contained herein, the Chief Executive Officer of the city or other geographical area for which any Area Board is established shall be entitled to convene or call meetings of any such Area Board and shall be entitled to attend and vote in respect of all matters coming before meetings of any such Area Board. 14 Article IV. Officers Section IV.1 Positions. The officers of the corporation shall be appointed by the board of directors and shall be a chairman of the board of directors, a president and a cashier. The board of directors may also appoint a chief executive officer; one or more vice presidents, one or more of whom may be designated as executive vice president, senior vice president, group vice president, or other designation; one or more assistant vice presidents; one or more trust officers; a secretary; a comptroller; and other officers or attorneys in fact to perform such duties as may, from time to time, appear to the board of directors to be required or desirable to transact the business of the corporation. The same person may be elected to more than one office of the corporation. Section IV.2 Election and Term of Office. The officers of the corporation shall be elected by the board of directors at a meeting of the board of directors. Each officer shall hold office at the pleasure of the board of directors or until such officer's death or such officer shall resign or shall have been removed in the manner hereinafter provided. Section IV.3 Vacancies. A vacancy in any office may be filled by the board of directors, subject in applicable instances to the prior approval of the corporation's primary federal regulator for senior executive officers. Section IV.4 Resignation and Removal of Officers. An officer may resign at any time by giving notice to the corporation. A resignation is effective when the notice is given unless the notice specifies a later effective date. If a resignation is made effective at a later date and the corporation accepts the future effective date, the board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date. The board of directors may remove any officer at any time with or without cause. Section IV.5 Contract Rights of Officers. The appointment of an officer does not itself create contract rights. An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the officer's contract rights, if any, with the corporation. Section IV.6 Duties of Officers. The officers of the corporation, if and when elected by the board of directors of the corporation, shall have the following duties: (a) Chairman of the Board. The chairman of the board or, in his or her absence, the president, shall preside at all meetings of the board of directors and, in case of absence of the chairman of the board and of the president, the board of directors shall appoint one of their members to preside during such absence or inability. In the absence of the chairman of the board, the powers and duties hereby vested in and imposed upon such person shall be exercised by the President. In the absence of both the chairman of the board and the president, those powers and duties shall be exercised by such officer of the corporation as may have been designated for that purpose by the chairman of the 15 board or the president, as the case may be. If none has been so designated by either thereof, the board of directors shall designate an officer of the corporation to act in such capacity. If the office of the chairman of the board of directors becomes vacant, the powers and duties herein vested in and imposed upon the holder of that office shall be vested in and discharged by the president, and the number of persons constituting the Executive Committee of the board of directors shall be correspondingly decreased while any such vacancy continues. (b) President. The president shall have general executive and administrative powers with respect to the business and affairs of the corporation and shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of president. The president also shall have and may exercise such powers and duties as may from time to time be assigned or conferred upon him by the board of directors of the corporation. (c) Vice Presidents. The vice presidents of the corporation shall perform such duties and possess such powers as may be directed and delegated by the board of directors. The executive vice president(s) shall rank in priority and in presiding over all other vice presidents; and the senior vice president(s) and group vice president(s) shall rank below the executive vice president(s) but shall rank in priority and in presiding over all other vice presidents. (d) Cashier. The cashier shall have the custody of such property and assets of the corporation as may be entrusted to him or her by the board of directors. In the absence, removal or other disability of the cashier, the chairman of the board or the president shall designate an officer for that purpose who shall perform his or her duties until action by the board of directors or Executive Committee. The cashier shall serve as the secretary of the corporation. The officers of the corporation shall perform such other or additional duties as may be prescribed by the board of directors, a committee of the board of directors, the chairman of the board, or the president. Any office described in Sections 4.6(a)-(d) of this Article IV may, by appropriate resolution adopted by the board of directors, be established in respect of any city or other geographical area in which the corporation transacts business, and the board of directors of the corporation may appoint persons to fill any such office created. In such event, and except as otherwise provided by resolution of the board of directors, the duties and responsibilities assigned to each officer of the corporation also shall constitute the duties and responsibilities of the person serving in a comparable office with respect to any such city or other geographical area, and such persons shall be deemed officers of the corporation, except that, in the latter case, such duties and responsibilities shall be limited to the operations of the corporation in the city or other geographical area with respect to which such person has been so designated. Any person designated by the board of directors to serve as an officer with respect to any city or other geographical area shall be given such title as the board of directors may determine; provided, however, that such titles shall distinguish such persons from those persons holding comparable positions with the corporation. Section IV.7 Compensation. The officers of this corporation shall receive such compensation as may be fixed by the board of directors or, if the board of directors directs, and 16 following advice or consultation with such persons as the board of directors deems appropriate, by the Human Resources Committee. Article V. Conveyances, Transfers and Contracts Section V.1 Conveyances, Etc. The chairman of the board or the president is authorized, in his or her discretion, to do and perform any and all corporate and official acts in carrying on the business of the corporation, either of its own or when acting in any fiduciary capacity whatsoever. Each is hereby empowered, in his or her discretion, to appoint all necessary agents or attorneys in fact. The chairman of the board, the president, any vice president designated as executive vice president, senior vice president, group vice president or vice president, or any other officer or agent authorized by the board of directors, or by the Executive Committee or Trust Policy Committee, is also authorized to make, execute and acknowledge all deeds, mortgages, releases, leases, agreements, contracts, bills of sale, assignments, transfers, powers of attorney or of substitution, proxies to vote stock, or any other instrument in writing that may be necessary in the purchase, sale, mortgage, lease, assignment, transfer, management, or handling in any way of any property of any description held or controlled by the corporation, either in its own right or in any fiduciary capacity. The enumeration of particular powers in this section shall not restrict, or be taken to restrict, in any way the general powers and authority herein given to any of said officers. Section V.2 Receipts, Checks, Drafts and Warrants. The chairman of the board, the president, the cashier, or any officer or employee to whom such authority is delegated by any of them, is authorized and empowered to receive and give receipts for money due and payable to the corporation from any source whatever and to sign and endorse checks, drafts and warrants in its name or on its behalf. Section V.3 Trust Department Activities. The chairman of the board, the president, or any vice president designated as executive vice president, senior vice president, group vice president or vice president, including those persons serving in such capacities who also carry the designation of Trust Officer, shall have full power and authority to execute any and all trustee's certificates on behalf of the corporation or any certificate of any character pertaining to any activity or condition in the Asset Management Company (Trust Division) of the corporation; and those officers, and any other officer or employee authorized by the Trust Policy Committee, also shall have full power and authority to sign any acceptance of any trust on behalf of the corporation, to validate bonds, and to take actions on behalf of the corporation acting in any fiduciary capacity, provided that (i) prior approval of the acceptance of any trust, validation of bonds, or taking of other actions shall have been granted by such officers or committees as shall then be authorized by the Trust Policy Committee to grant such approval and (ii) a record of the giving of such approval shall have been made. 17 Section V.4 Seal. The cashier shall have the general custody of the seal of the corporation, and he or she shall have authority to affix the same to any instrument or other writing, and to attest by his or her signature the execution on any instrument or other writing by any authorized officer and the affixing of the seal of the corporation. The cashier may give authority to any other officer to affix the seal of the corporation and to attest by his or her signature the execution of any instrument or other writing by any authorized officer on behalf of the corporation and the affixing of the seal of the corporation. No affixing of the seal of the corporation, and no attesting of the affixing of the seal or of the execution of any instrument or other writing by any authorized officer of the corporation, shall be necessary to the due execution of any such instrument or writing unless otherwise provided by law. Article VI. Borrowings Section VI.1 Borrowings; Collateral for Borrowings. With the approval of the board of directors or executive committee, the chairman of the board, the president, any executive vice president, senior vice president, group vice president, or vice president, including those persons serving in such capacities who also carry the designation of Trust Officer, shall have the authority to borrow money, including the authority to pledge and hypothecate any securities or any stocks or bonds, notes, or any property, real or personal, of the corporation as collateral for such loan, and to endorse or guarantee in its name any notes or obligations payable or belonging to the corporation and to execute and acknowledge, any document or instrument required for such purpose or purposes. Section VI.2 Time or Interest Bearing Certificates of Deposit. All time or interest bearing certificates of deposit may be signed by the chairman of the board, the president, any executive vice president, senior vice president, group vice president, vice president or any assistant vice president, the cashier or any employee or employees of the corporation designated by name or by job title or description from time to time by the chairman of the board or the president. The provisions of this section are supplemental to any other provision of these bylaws. 18 Article VII. Certificates Representing Shares Section VII.1 Certificates Representing Shares. Certificates representing shares of the corporation shall be in such form as shall be determined by the board of directors and shall be in accordance with the Alabama Business Corporation Act. Such certificates shall be signed either manually or in facsimile by any two of the following officers: the chairman of the board, the president, any vice-president or assistant vice-president, the treasurer or any assistant treasurer, the secretary or any assistant secretary, and may be sealed with the corporate seal or a facsimile thereof. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer at the date of its issue. Each certificate for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number and class of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the corporation as the board of directors may prescribe. Section VII.2 Legends on Certificates. Any written restriction on the transfer of shares of the corporation must be noted conspicuously on the certificate representing such shares. In addition, if the corporation is authorized to issue shares of more than one class, there shall be set forth upon the face or back of every certificate, or every certificate shall have a statement that the corporation will furnish to any shareholder upon request and without charge, a full statement of the designations, preferences, limitations, and relative rights of the shares of each class authorized to be issued, and if the corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences between the shares of each such series so far as the same have been fixed and determined and the authority of the board of directors to fix and determine the relative rights and preferences of subsequent series. Certificates may, but need not, also note restrictions on transfer to certain persons arising under federal and state banking laws. Section VII.3 Transfer of Shares. Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by such person's legal representative, who shall furnish proper evidence of authority to transfer, or by such person's attorney thereunto authorized by power of attorney duly executed and filed with the secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes. The corporation may, but shall not be required to, transfer shares of the corporation to any person to whom transfer, the board of directors in its reasonable discretion determines, may be violative of applicable state or federal banking or securities laws. Section VII.4 Lost, Stolen, Destroyed, or Mutilated Certificates. The board of directors may direct a new certificate to be issued in place of any certificate theretofore issued by the corporation alleged to have been lost or destroyed. When authorizing such issue of a new 19 certificate, the board of directors, in its discretion and as a condition precedent to the issuance thereof, may prescribe such terms and conditions as it deems expedient, and may require such indemnities as it deems adequate, to protect the corporation from any claim that may be made against it with respect to any such certificate alleged to have been lost or destroyed. Article VIII. Indemnification of Directors, Officers and Employees Section VIII.1 Indemnification (a) Subject to the limitations stated in this Article VIII, the corporation shall indemnify, to the fullest extent permitted by applicable state or federal law or regulation which may be in effect from time to time, its directors (which shall include, for purposes of this Article VIII, honorary and advisory directors), officers and employees, and any such director, officer or employee of the corporation who is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against liability or other expenses incurred in connection with the defense of any proceeding, or of any claim, issue or matter in such proceeding, in which such director, officer or employee is a party because such person is or was a director, officer or employee of the corporation or is or was serving at the request of the corporation in one of the capacities referred to above. If the amount, extent, or quality of indemnification permitted by law should be in any way restricted after the adoption of these bylaws, then the corporation shall indemnify such persons to the fullest extent permitted by law as in effect at the time of the occurrence of the omission or the act giving rise to the claimed liability with respect to which indemnification is sought. (b) In connection with indemnification of directors, officers and employees pursuant to Section VIII.8.1(a) of these bylaws, the corporation shall advance expenses to such persons as and to the extent permitted by applicable law or regulation. (c) In addition to the conditions under which indemnification and advancement of expenses by the corporation are permitted under the Alabama Business Corporations Act and other applicable state or federal law or regulation (which conditions are incorporated herein by this reference), the indemnification and advancement of expenses otherwise provided by this Article VIII also shall not be made by the corporation if, in the judgment of the corporation, the director, officer, employee, agent or other person has not cooperated with the corporation in its dealing with any such proceeding, or any claim, issue or matter in such proceeding. If requested by the corporation, the director, officer, employee, agent or other person shall assist in investigations and in the conduct of suits, including attending hearings and trials and giving evidence in connection therewith. (d) The indemnification and advancement of expenses pursuant to this Article VIII shall be in addition to, and not exclusive of, any other right that the person seeking indemnification may have under these bylaws, the articles of incorporation of the corporation, any separate contract or agreement or applicable law. Section VIII.2 Insurance. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, partner, trustee, employee or agent of 20 the corporation, or any person who is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under applicable law. Section VIII.3 Survival of Right. Any right to indemnification or advancement of expenses provided by or granted pursuant to this Article VIII shall continue as to a person who has ceased to be a director, officer, employee or agent or to serve as a director, officer, partner, trustee, employee or agent of such other foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person. Any repeal or modification of this Article VIII which serves to restrict or lessen the rights to indemnification or advancement of expenses provided by this Article VIII shall be prospective only and shall not lessen the right to indemnification or advancement of expenses existing at the time of such repeal or modification with respect to liabilities arising out of claimed acts or omissions occurring prior to such repeal or modification. Article IX. General Section IX.1 Fiscal Year. The fiscal year of the corporation shall be December 31. Section IX.2 Surplus; Restriction of Dividends. The corporation shall transfer to surplus each year at least ten percent (10%) of its net earnings until the surplus of the corporation shall be equal to at least twenty percent (20%) of its capital, and the corporation shall not declare or pay a dividend in excess of ninety percent (90%) of its net earnings until the surplus of the corporation shall be equal to at least twenty percent (20%) of the capital. Thereafter, the board of directors, from time to time, may declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law; provided, however, that prior written approval of the Superintendent of Banks of the State of Alabama shall be required if the total of all dividends declared by the corporation in any calendar shall exceed the total of the corporation's net earnings of that year combined with its retained net earnings of the preceding two years, less any required transfers to surplus. No dividends, withdrawals, or transfers may be made from the corporation's surplus without the prior written approval of the Superintendent of Banks of the State of Alabama. For the purposes of this Section 9.2, the terms "net earnings" shall mean the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, after deducting from the total thereof all current operating expenses, actual losses, and all federal, state and local taxes. Section IX.3 Checks. All checks or demands for money and notes of the corporation shall be signed by an officer of the corporation or by an agent authorized by the board of directors. 21 Section IX.4 Corporate Seal. The board of directors shall select a corporate seal which shall have inscribed thereon the name of the corporation, the words "Alabama" and "Banking Corporation," and such seal may include the date of incorporation of the corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. Section IX.5 Voting of Corporation's Securities. Unless otherwise ordered by the board of directors, the chairman of the board, the president, any vice-president or the secretary, or such other officer as may be designated by the board of directors to act in the absence of the chairman of the board, the president, any vice-president or the secretary, shall have full power and authority on behalf of the corporation to attend and to act and to vote, and to execute a proxy or proxies empowering others to attend and to act and to vote, at any meetings of security holders of any corporation in which the corporation may hold securities, and at such meetings the chairman of the board, the president, or such other officer of the corporation, or such proxy shall possess and may exercise any and all rights and powers incident to the ownership of such securities, and which as the owner thereof the corporation might have possessed and exercised, if present. The secretary or any assistant secretary may affix the corporate seal to any such proxy or proxies so executed by the chairman of the board, the president, or such other officer, and attest the same. The board of directors by resolution from time to time may confer like powers upon any other person or persons. Section IX.6 Loans, Gifts, Favors, Etc. to Banking Department Employees from the Corporation, Employees, Etc., Prohibited. No officer, agent, director, or employee of the corporation shall offer or give to an employee of the Alabama State Banking Department, or such employee's family, a gift, favor, or service or promise of future employment. Expenses associated with social occasions afforded such employees shall not be deemed a thing of value within the meaning of this Section 9.6 or prohibited hereby. No Alabama State Banking Department employee shall, either directly or indirectly, be allowed to have a pecuniary interest in or loan from the corporation. Nothing herein shall be construed to prohibit the Superintendent of Banks of the State of Alabama or a State of Alabama Banking Department employee from owning a certificate of deposit in the corporation, however, no preferential rate shall be granted. Section IX.7 Semi-Annual Report. The corporation shall make to the Superintendent of Banks of the State of Alabama, on the call of the Superintendent of Banks of the State of Alabama for such report, not less than two (2) reports during each year according to the form which may be prescribed by the Superintendent of Banks of the State of Alabama. Such report shall be verified by the oath or affirmation by the president, secretary and by at least three directors of the corporation to be correct to the best of their knowledge and belief of each. Each report required above shall exhibit in detail and under appropriate headings the resources and liabilities of the corporation at the close of business on any past date specified by the Superintendent of Banks of the State of Alabama, not more than five (5) days prior to the issue of the Superintendent of Banks of the State of Alabama's call, and the report shall be published once by the corporation in the newspaper of general publication in the corporation's location. Proof of such publication shall be furnished by the corporation to the Superintendent of Banks of the State of Alabama in such manner as may be prescribed by him, including the clippings of the reports as published in the newspaper. 22 Section IX.8 Loans. The corporation shall not make any loans to its officers, director or employees, except as provided for by the Alabama Banking Code and Regulation O of the Federal Reserve Board, as each may be amended from time to time. Any such loan must comply with the requirements of the Federal Reserve Board or The Federal Deposit Insurance Corporation, as applicable. The corporation shall not make any loan to any one person which, when combined with all other loans to such person, would cause the total loans to that person to exceed the limits provided for in Section 5-5A-22 of the Alabama Banking Code, as it may be amended from time to time. Section IX.9 Bonds. The directors shall require bonds, either individual or in blanket form, from each and every officer and employee handling money, checks, securities or other valuable papers of the corporation, such bond to be made by a bonding company authorized to make such bonds in the State of Alabama to be approved by the board of directors and to be in such form as may be approved by the Superintendent of Banks of the State of Alabama. The Superintendent of Banks of the State of Alabama or the board of directors of the corporation may require an increase of the amount of such bond or other additional bond and securities, when he or they deem it necessary for the better protection of the bank and its depositors. Directors, as such, shall not be required to give bond. Section IX.10 Purchase of Corporate Stock. The corporation shall not make any loan taking its own stock as security therefor or directly or indirectly purchase shares of its own stock, except in pursuance of the provisions of law for reducing its capital stock. The corporation shall not subscribe for or own capital stock in any other bank, except in the usual course of business in payment of an indebtedness or in order to prevent a loss on a debt owing to it and the corporation must sell said stock within one (1) year from the time the same is acquired, unless this time period is extended by the Superintendent of Banks of the State of Alabama. Section IX.11 Articles of Incorporation. To the extent that these bylaws may be inconsistent with the articles of incorporation of the corporation, as may be amended from time to time, the provisions of the articles of incorporation shall control. Article X. Amendment of Bylaws Section X.1 Amendment by Board of directors or Shareholders. (a) The board of directors may amend or repeal the corporation's bylaws unless: (9) the articles of incorporation or the Alabama Business Corporation Act reserve this power exclusively to the shareholders in whole or in part; or (10) the shareholders in amending or repealing a particular bylaw provide expressly that the board of directors may not amend or repeal that bylaw. (b) The shareholders may amend or repeal the bylaws even though the bylaws may also be amended or repealed by the board of directors. 23 Section X.2 Bylaw Increasing Quorum or Voting Requirement for Shareholders. (a) If authorized by the articles of incorporation, the shareholders may adopt or amend a bylaw that fixes a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is required by the Alabama Business Corporation Act. The adoption or amendment of a bylaw that adds, changes, or deletes a greater quorum or voting requirement for shareholders must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater. (b) A bylaw that fixes a greater quorum or voting requirement for shareholders under subsection (a) may not be adopted, amended, or repealed by the board of directors. Section X.3 Bylaw Increasing Quorum or Voting Requirement for Directors. (a) A bylaw that fixes a greater quorum or voting requirement for the board of directors may be amended or repealed: (11) if originally adopted by the shareholders, only by the shareholders; (12) if originally adopted by the board of directors, either by the shareholders or by the board of directors. (b) A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors. (c) Action by the board of directors under subsection (a)(2) to adopt or amend a bylaw that changes the quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater. Article XI. Emergency Preparedness Program In the event of the destruction of properties, personnel and records of the corporation, to the extent that continued operation of the corporation is not reasonably possible, provisions in various resolutions hereafter adopted by the board of directors with reference to emergency operations shall become effective and continue to be in effect until conditions warrant the reestablishment of operations. 24 HISTORY OF BYLAWS Initial adoption June 6, 2000. 25 ITEM 16, #6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939 in connection with the proposed issue of BellSouth Corporation Debt Securities under Indenture dated August 15, 2001, we hereby consent that reports of examination by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. SOUTHTRUST BANK BY:/s/THOMAS E. CLOWER -------------------------------- THOMAS E. CLOWER VICE PRESIDENT AND TRUST OFFICER DATED: OCTOBER 17, 2001 26 Item 16, #7 Federal Reserve Bank REPORT OF CONDITION Consolidating domestic and foreign subsidiaries of the SOUTHTRUST BANK, state member bank, of BIRMINGHAM in the state of ALABAMA, at the close of business on June 30, 2001. This report is required by law: 12 U.S.C. ss324 (State member banks). FDIC certificate number 00849 for the Federal Reserve Bank of Atlanta district. Statement of Resources and Liabilities 10/15/2001 - SouthTrust Bank - Certificate Number 00849 FFIEC 031 Page RC-1 Consolidated Report of Condition for Insured Commercial [11] and State-Chartered Savings Banks for June 30, 2001 All schedules are to be reported in thousands of dollars. Unless otherwise indicated report the amount outstanding as of the last business day of the quarter. Schedule RC - Balance Sheet
Dollar Amounts in Thousands RCFD Bil Mil Thou -------------------------------------------------------------------------------------------------------------------------------- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin(1)........................................ 0081 1,074,208 1.a. b. Interest-bearing balances(2)................................................................. 0071 1,081 1.b. 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A)................................... 1754 1,454,623 2.a. b. Available-for-sale securities (from Schedule RC-B, column D)................................. 1773 8,513,073 2.b. 3. Federal funds sold and securities purchased under agreements to resell.......................... 1350 4,593 3. 4. Loans and lease financing receivables (from Schedule RC-C): a. Loans and leases held for sale............................................................... 5369 447,117 4.a. b. Loans and leases, net of unearned income................................... B528 32,323,937 4.b. c. LESS: Allowance for loan and lease losses.................................. 3123 452,905 4.c. d. Loans and leases, net of unearned income and allowance (item 4.b minus 4.c).................. 8529 31,861,032 4.d. 5. Trading assets (from Schedule RC-D)............................................................. 3545 0 5. 6. Premises and fixed assets (including capitalized leases)........................................ 2145 773,615 6. 7. Other real estate owned (from Schedule RC-M).................................................... 2150 37,620 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)........ 2130 0 8. 9. Customers' liability to this bank on acceptances outstanding.................................... 2155 18,625 9. 10. Intangible assets: a. Goodwill..................................................................................... 3163 559,800 10.a. b. Other intangible assets (from Schedule RC-M)................................................. 0425 46,800 10.b. 11. Other assets (from Schedule RC-F)............................................................... 2160 1,723,890 11. 12. Total assets (sum of items 1 through 11)........................................................ 2170 46,615,977 12.
---------------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 10/15/2001 - SouthTrust Bank - Certificate Number 00849 FFIEC 031 Page RC-2 [12] Schedule RC - Continued
Dollar Amounts in Thousands Bil Mil Thou ------------------------------------------------------------------------------------------------- --- --- ---- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from RCON Schedule RC-E, part I).................................................................... 2200 27,339,871 13.a (1) Noninterest-bearing(1)....................................RCON 6631 2,249,416 13.a.(1) (2) Interest-bearing..........................................RCON 6636 25,090,255 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs RCON (from Schedule RC-E, part II)............................................................. 2200 2,707,993 13.b (1) Noninterest-bearing.......................................RCFN 6631 0 13.b.(1) (2) Interest-bearing..........................................RCFN 6636 2,707,993 RCFD 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase................... 2800 6,264,314 14. 15. Trading liabilities (from Schedule RC-D)..................................................... 3548 0 15. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) (from Schedule RC-M)..................................................... 3190 5,095,207 16. 17. Not applicable 18. Bank's liability on acceptances executed and outstanding..................................... 2920 18,625 18. 19. Subordinated notes and debentures(2)......................................................... 3200 881,213 19. 20. Other liabilities (from Schedule RC-G)....................................................... 2930 643,033 20. 21. Total liabilities (sum of items 13 through 20)............................................... 2948 42,750,056 21. 22. Minority interest in consolidated subsidiaries............................................... 3000 0 22. EQUITY CAPITA 23. Perpetual preferred stock and related surplus................................................ 3838 0 23. 24. Common stock................................................................................. 3230 9,007 24. 25. Surplus (exclude all surplus related to preferred stock)..................................... 3839 1,858,488 25. 26. a. Retained earnings......................................................................... 3632 1,937,735 26.a b. Accumulated other comprehensive income(3)................................................. B530 50,691 26.b 27. Other equity capital components(4)........................................................... A130 0 27. 28. Total equity capital (sum of items 23 through 27)............................................ 3210 3,865,921 28. 29. Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28)....... 3300 46,615,977 29.
I, Brenda B. Rimmer, Vice President and Regulatory Reporting Manager of SouthTrust Bank, do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. /s/ Brenda B. Rimmer -------------------------------------------------- Brenda B. Rimmer October 15, 2001 --------------------------------------------------- Date EX-99.A 7 g72203ex99-a.txt THIRD QUARTER 2001 FINANCIAL RESULTS BellSouth Corporation Consolidated Statements of Income - Reported Basis (unaudited) (amounts in millions, except per share data)
3Q01 3Q00(10) Growth Operating Revenues Communications group $ 4,770 $4,565 4.5% Domestic wireless -- 963 -100.0% Latin America 710 757 -6.2% Domestic advertising and publishing 493 539 -8.5% All other 40 26 53.8% Total Operating Revenues 6,013 6,850 -12.2% Operating Expenses Operational and support expenses 3,138 3,612 -13.1% Depreciation and amortization 1,178 1,301 -9.5% Severance accrual -- -- N/M* Total Operating Expenses 4,316 4,913 -12.2% Operating Income 1,697 1,937 -12.4% Interest Expense 304 344 -11.6% Other Income, net (1,336) 31 N/M Income Before Income Taxes 57 1,624 -96.5% Provision for Income Taxes 50 588 -91.5% Net Income $ 7 $1,036 -99.3% Diluted: Weighted Average Common Shares Outstanding 1,887 1,885 0.1% Earnings Per Share $ 0.00 $ 0.55 N/M
* - Not meaningful. Selected Financial and Operating Data EBITDA(5) $ 2,875 $ 3,238 -11.2% EBITDA margin(6) 47.8% 47.3% 50bps Return on average equity (annualized) 0.2% 25.0% N/M Return on average total capital (annualized) 2.8% 15.5% N/M Digital and data revenues $ 1,142 $ 894 27.7% Dividends per share $ 0.19 $ 0.19 -- Capital expenditures $ 1,367 $ 1,672 -18.2% Common shares outstanding 1,877 1,866 0.6% Book value per share $ 9.61 $ 8.84 8.7% Debt ratio 52.6% 54.8% -220bps Total employees 103,055 102,191 0.8%

Page 1
Year-to-Date 2001 2000(10) Growth Operating Revenues Communications group $ 14,199 $ 13,679 3.8% Domestic wireless -- 2,766 -100.0% Latin America 2,227 2,124 4.8% Domestic advertising and publishing 1,363 1,329 2.6% All other 128 93 37.6% Total Operating Revenues 17,917 19,991 -10.4% Operating Expenses Operational and support expenses 9,531 10,647 -10.5% Depreciation and amortization 3,538 3,759 -5.9% Severance accrual -- 78 N/M Total Operating Expenses 13,069 14,484 -9.8% Operating Income 4,848 5,507 -12.0% Interest Expense 998 982 1.6% Other Income, net (982) 313 N/M Income Before Income Taxes 2,868 4,838 -40.7% Provision for Income Taxes 1,090 1,737 -37.2% Net Income $ 1,778 $ 3,101 -42.7% Diluted: Weighted Average Common Shares Outstanding 1,886 1,894 -0.4% Earnings Per Share $ 0.94 $ 1.64 -42.7%
* - Not meaningful. Selected Financial and Operating Data EBITDA(5) $ 8,386 $ 9,344 -10.3% EBITDA margin(6) 46.8% 46.7% 10bps Return on average equity (annualized) 13.4% 25.8% N/M Return on average total capital (annualized) 9.5% 15.9% N/M Digital and data revenues $ 3,265 $ 2,574 26.8% Dividends per share $ 0.57 $ 0.57 -- Capital expenditures $ 4,724 $ 4,940 -4.4%

Page 2 BellSouth Corporation Notes to Financial and Operating Data (amounts in millions, except per share data) BellSouth's consolidated results included herein reflect the impacts of the following items: (a) Loss on writedown of investments - Represents the loss incurred to recognize other-than-temporary declines in the market values of several investments accounted for under the cost method. This loss reduced net income by $1,017, or $0.54 per share for the third quarter and year-to-date 2001 periods. (b) Adjustment to ISP Accrual - Represents the loss incurred during the second quarter of 2001 for prior claims from competitive local exchange carriers regarding reciprocal compensation for ISP traffic. This loss reduced net income by $88, or $0.05 per share for the 2001 year-to-date period. (c) Postretirement benefit expense - The amount shown represents expense recognized in the first quarter of 2001 for changes in postretirement medical benefit obligations. This expense reduced net income by $47, or $0.02 per share for the 2001 year-to-date period. (d) Loss on sale of Qwest common stock - Represents losses incurred during the first and third quarter of 2001 from the sale of portions of our investment in Qwest common stock. These losses reduced our third quarter 2001 net income by $52, or $0.03 per share and reduced our year-to-date 2001 net income by $84, or $0.04 per share. (e) Losses incurred as we exit the wireless video entertainment business, which reduced net income by $6 for third quarter 2001 and reduced net income by $16, or $0.01 per share for the 2001 year-to-date period. (f) Gain on E-Plus Restructuring - Represents income related to the restructuring of our ownership interest in German wireless operator E-Plus during first quarter 2000. This transaction increased net income by $68, or $0.04 per share for the 2000 year-to-date period. (g) Severance Accrual - Represents expense recorded during first quarter 2000 as a result of our plan to reduce our domestic general and administrative staff. This loss reduced net income by $48, or $0.03 per share for the 2000 year-to-date period. (h) Gain on Sale of SkyCell - Represents a gain from the sale of our 24.5% ownership interest in a wireless service provider in India. This transaction increased our third quarter and year-to-date 2001 net income by $19, or $0.01 per share. Page 3 BellSouth Corporation Consolidated Balance Sheets (unaudited) (amounts in millions, except per share data)
September 30, December 31, 2001 2000 Assets Current Assets: Cash and cash equivalents $ 854 $ 1,061 Accounts receivable, net of allowance for uncollectibles of $428 and $377 5,192 5,157 Material and supplies 377 379 Other current assets 738 809 Total Current Assets 7,161 7,406 Investments and Advances 10,500 11,010 Property, Plant and Equipment, net 25,233 24,157 Deferred Charges and Other Assets 4,876 4,180 Intangible Assets, net 4,273 4,172 Total Assets $ 52,043 $ 50,925 Liabilities and Shareholders' Equity Current Liabilities: Debt maturing within one year $ 6,961 $ 7,569 Accounts payable 1,627 2,233 Other current liabilities 4,241 3,468 Total Current Liabilities 12,829 13,270 Long-Term Debt 13,105 12,463 Noncurrent Liabilities: Deferred income taxes 3,078 3,580 Other noncurrent liabilities 4,991 4,700 Total Noncurrent Liabilities 8,069 8,280 Shareholders' Equity: Common stock, $1 par value 2,020 2,020 Paid-in capital 6,766 6,740 Retained earnings 14,704 14,074 Accumulated other comprehensive income (277) (488) Shares held in trust and treasury (5,034) (5,222) Guarantee of ESOP debt (139) (212) Total Shareholders' Equity 18,040 16,912 Total Liabilities and Shareholders' Equity $ 52,043 $ 50,925
Page 4 BellSouth Corporation Results by Segment (amounts in millions) (unaudited) Communications Group(1)
3Q01 3Q00 Growth Operating Revenues Local service $3,003 $2,888 4.0% Network access 1,252 1,154 8.5% Long distance 192 178 7.9% Other 360 418 -13.9% Total Operating Revenues 4,807 4,638 3.6% Operating Expenses Operational and support expenses 2,439 2,168 12.5% Depreciation and amortization 1,014 962 5.4% Total Operating Expenses 3,453 3,130 10.3% Operating Income 1,354 1,508 -10.2% Interest Expense 139 180 -22.8% Other Income, net 9 1 N/M* Income Before Income Taxes 1,224 1,329 -7.9% Provision for Income Taxes 458 492 -6.9% Segment Net Income(1) $ 766 $ 837 -8.5%
* - Not meaningful. Selected Financial and Operating Data
(amounts in millions) EBITDA(5) $ 2,368 $ 2,470 -4.1% EBITDA margin(6) 49.3% 53.3% -400bps Calling feature revenues $ 580 $ 551 5.3% Access minutes of use 26,922 28,859 -6.7% Toll messages 109 125 -12.8% Capital expenditures $ 1,138 $ 1,317 -13.6%
Equivalent access lines in service (thousands): Access lines 25,574 25,942 -1.4% Access line equivalents 36,693 24,937 47.1% Total equivalent access lines in service 62,267 50,879 22.4% Wholesale Lines 1,596 1,188 34.3% Internet customers (thousands) 1,141 871 31.0% DSL customers (thousands) 463 134 245.5%

Page 5
Year-to-Date 2001 2000 Growth Operating Revenues Local service $ 8,877 $8,607 3.1% Network access 3,715 3,596 3.3% Long distance 539 517 4.3% Other 1,161 1,161 0.0% Total Operating Revenues 14,292 13,881 3.0% Operating Expenses Operational and support expenses 6,995 6,516 7.4% Depreciation and amortization 3,003 2,813 6.8% Total Operating Expenses 9,998 9,329 7.2% Operating Income 4,294 4,552 -5.7% Interest Expense 472 519 -9.1% Other Income, net 26 8 N/M Income Before Income Taxes 3,848 4,041 -4.8% Provision for Income Taxes 1,408 1,501 -6.2% Segment Net Income(1) $ 2,440 $2,540 -3.9%
* - Not meaningful. Selected Financial and Operating Data
(amounts in millions) EBITDA(5) $ 7,297 $ 7,365 -0.9% EBITDA margin(6) 51.1% 53.1% -200bps Calling feature revenues $ 1,724 $ 1,598 7.9% Access minutes of use 83,338 86,786 -4.0% Toll messages 331 390 -15.1% Capital expenditures $ 4,032 $ 3,802 6.0%
Page 6 BellSouth Corporation Results by Segment (unaudited) Supplemental Operating Data (in thousands) Communications Group-- Network Access Lines In Service(a)
3Q01 3Q00 Growth Access lines(b) Residence 16,915 17,205 -1.7% Business 8,441 8,481 -0.5% Other 218 256 -14.8% Total access lines in service 25,574 25,942 -1.4% Access line equivalents(c) Selected digital data services: DS0 & ADSL 3,507 1,422 146.6% DS1 6,465 5,359 20.6% DS3 & higher 26,721 18,156 47.2% Total digital data lines in service 36,693 24,937 47.1% Total equivalent access lines in service 62,267 50,879 22.4%
(a) Prior period operating data are often revised at later dates to reflect updated information. The above information reflects the latest data available for the periods indicated. (b) Access line counts include amounts for switched access lines, Basic Rate ISDN, Primary Rate ISDN and UNE Combos. (c) Access line equivalents represent a conversion of non-switched data circuits to a switched access line basis and is presented for comparability purposes. Equivalents are calculated by converting high-speed/high-capacity circuits to the equivalent of a switched access line based on transport capacity. While the revenues generated by access line equivalents have a directional relationship with these counts, revenue growth rates cannot be compared to line growth rates on an equivalent basis. Page 7 BellSouth Corporation Results by Segment (amounts in millions) (unaudited) Domestic Wireless Segment (1)(a)
3Q01 3Q00 Growth Operating Revenues Service revenues(4) $1,365 $ 995 37.2% Equipment and other revenues 100 76 31.6% Total Operating Revenues 1,465 1,071 36.8% Operating Expenses Operational and support expenses 975 776 25.6% Depreciation and amortization 199 151 31.8% Total Operating Expenses 1,174 927 26.6% Operating Income 291 144 102.1% Interest Expense 80 29 N/M* Other Income (Expense), net (2) 44 N/M Income Before Income Taxes 209 159 31.4% Provision for Income Taxes 81 61 32.8% Segment Net Income(1) $ 128 $ 98 30.6%
* - Not meaningful. Selected Financial and Operating Data(b)
(amounts in millions, except customer data in thousands) EBITDA(5) $ 490 $ 295 66.1% EBITDA margin(6)(c) 35.9% 29.6% 630bps Average monthly revenue per customer(7)(d) $ 53 $ 60 -11.7% Customer net adds in period: Cellular and PCS 24 229 -89.5% Data (Cingular Interactive) 3 80 -96.3% Customers: Cellular and PCS 8,512 5,711 49.0% Data (Cingular Interactive) 279 462 -39.6% POPs 84,400 57,034 48.0% Penetration rate(9) 11.1% 10.3% 80bps
Page 8
Year-to-Date 2001 2000 Growth Operating Revenues Service revenues(4) $3,882 $2,832 37.1% Equipment and other revenues 307 225 36.4% Total Operating Revenues 4,189 3,057 37.0% Operating Expenses Operational and support expenses 2,821 2,226 26.7% Depreciation and amortization 569 472 20.6% Total Operating Expenses 3,390 2,698 25.6% Operating Income 799 359 122.6% Interest Expense 244 83 N/M Other Income (Expense), net 8 117 N/M Income Before Income Taxes 563 393 43.3% Provision for Income Taxes 218 148 47.3% Segment Net Income(1) $ 345 $ 245 40.8%
* - Not meaningful. Selected Financial and Operating Data(b)
(amounts in millions, except customer data in thousands) EBITDA(5) $1,368 $ 831 64.6% EBITDA margin(6)(c) 35.2% 29.3% 590bps Average monthly revenue per customer(7)(d) $ 52 $ 60 -13.3% Customer net adds in period: Cellular and PCS 639 824 -22.5% Data (Cingular Interactive) 50 238 -79.0%
(a) The 2000 periods are comprised of BellSouth's wireless voice and wireless data operations. The 2001 periods are comprised of BellSouth's 40% share of the reported results of Cingular Wireless. (b) Customer data for the 2001 periods, including POPs, penetration rate and average monthly revenue per customer, is comprised of BellSouth's 40% share of the managed results of Cingular Wireless. (c) EBITDA margin denominator includes service revenues only. (d) Average monthly revenue per customer excludes Cingular Interactive (formerly BellSouth Wireless Data). Page 9 BellSouth Corporation Results by Segment (amounts in millions) (unaudited) Latin America Group(1)(2)
3Q01 3Q00 Growth Operating Revenues Service revenues(4) $ 591 $ 613 -3.6% Equipment and other revenues 91 110 -17.3% Advertising and publishing revenues 34 49 -30.6% Total Operating Revenues 716 772 -7.3% Operating Expenses Operational and support expenses 492 581 -15.3% Depreciation and amortization 138 167 -17.4% Total Operating Expenses 630 748 -15.8% Operating Income 86 24 258.3% Interest Expense 51 52 -1.9% Other Income (Expense), net (67) (37) N/M* Income Before Income Taxes (32) (65) N/M Provision for Income Taxes 20 (3) N/M Segment Net Income(1) $ (52) $ (62) N/M
* - Not meaningful. Selected Financial and Operating Data
(amounts in millions, except customer data in thousands) EBITDA(5) $ 224 $ 191 17.3% EBITDA margin(6) 31.3% 24.7% 660bps Average monthly revenue per customer(8) $ 24 $ 31 -22.6% Customer net adds in period (excluding ownership changes) 84 365 -77.0% Customers (voice) 8,092 6,668 21.4% POPs 156,200 156,200 0.0% Penetration rate(9) 5.2% 4.3% 90bps
Page 10
Year-to-Date 2001 2000 Growth Operating Revenues Service revenues(4) $ 1,862 $ 1,762 5.7% Equipment and other revenues 327 315 3.8% Advertising and publishing revenues 58 94 -38.3% Total Operating Revenues 2,247 2,171 3.5% Operating Expenses Operational and support expenses 1,627 1,684 -3.4% Depreciation and amortization 447 423 5.7% Total Operating Expenses 2,074 2,107 -1.6% Operating Income 173 64 170.3% Interest Expense 166 111 49.5% Other Income (Expense), net (236) (83) N/M Income Before Income Taxes (229) (130) N/M Provision for Income Taxes 48 (14) N/M Segment Net Income(1) $ (277) $ (116) N/M
* - Not meaningful. Selected Financial and Operating Data
(amounts in millions, except customer data in thousands) EBITDA(5) $ 620 $ 487 27.3% EBITDA margin(6) 27.6% 22.4% 520bps Average monthly revenue per customer(8) $ 26 $ 32 -18.8% Customer net adds in period (excluding ownership changes) 1,023 1,680 -39.1%
Page 11 BellSouth Corporation Proportionate Basis(3) -- Selected Financial and Operating Data (Amounts in millions, except customer data in thousands) Latin America Group(1)(2)
3Q01 3Q00 Growth Operating revenues $ 657 $ 727 -9.6% EBITDA(5) $ 203 $ 188 8.0% EBITDA margin(6) 30.9% 25.9% 500bps Average monthly revenue per customer(8) $ 24 $ 31 -22.6% Customer net adds in period (excluding ownership changes) 212 399 -46.9% Customers (voice) 8,109 6,541 24.0% POPs 156,961 156,586 0.2% Penetration rate(9) 5.2% 4.4% 80bps Year-to-Date 2001 2000 Growth Operating revenues $ 2,070 $ 2,086 -0.8% EBITDA(5) $ 579 $ 476 21.6% EBITDA margin(6) 28.0% 22.8% 520bps Average monthly revenue per customer(8) $ 26 $ 33 -21.2% Customer net adds in period (excluding ownership changes) 1,184 1,672 -29.2%
Page 12 BellSouth Corporation Worldwide Wireless (unaudited) Customers and POPs by Country (Proportionate Basis(3) in thousands)
Customers As of Country Brand 3Q01 3Q00 Growth United States Cingular Wireless / 8,512 6,151 38.4% BellSouth Mobility Argentina Movicom BellSouth 1,121 1,005 11.5% Brazil Various* 1,615 1,250 29.2% Chile BellSouth 827 602 37.4% Colombia BellSouth 767 490 56.5% Ecuador BellSouth 276 186 48.4% Guatemala BellSouth 39 - N/M** Nicaragua BellSouth 136 67 103.0% Panama BellSouth 127 81 56.8% Peru BellSouth 388 357 8.7% Uruguay Movicom BellSouth 63 60 5.0% Venezuela Telcel BellSouth 2,750 2,443 12.6% Total Latin America 8,109 6,541 24.0% Denmark Sonofon 438 357 22.7% Germany e-plus 1,694 1,231 37.6% India SkyCell*** - 8 -100.0% Israel Cellcom 746 606 23.1% 2,878 2,202 30.7% Total Worldwide Wireless 19,499 14,894 30.9% POPs As of Country Brand 3Q01 3Q00 Growth United States Cingular Wireless / 84,400 59,427 42.0% BellSouth Mobility Argentina Movicom BellSouth 23,270 23,270 -- Brazil Various* 25,461 25,234 0.9% Chile BellSouth 15,100 15,100 -- Colombia BellSouth 27,451 27,451 -- Ecuador BellSouth 11,086 11,086 -- Guatemala BellSouth 7,140 7,140 -- Nicaragua BellSouth 2,581 2,581 -- Panama BellSouth 1,223 1,223 -- Peru BellSouth 24,551 24,403 0.6% Uruguay Movicom BellSouth 966 966 -- Venezuela Telcel BellSouth 18,132 18,132 --
Page 13 Total Latin America 156,961 156,586 0.2% Denmark Sonofon 2,465 2,465 -- Germany e-plus 18,568 18,568 -- India SkyCell*** - 1,348 N/M Israel Cellcom 2,119 2,119 -- 23,152 24,500 -- Total Worldwide Wireless 264,513 240,513 10.0%

* - BCP in Sao Paulo and Northeast regions; TCO. ** - Not meaningful. *** - Sold in third quarter 2001. Page 14 BellSouth Corporation Results by Segment (amounts in millions) (unaudited) Domestic Advertising & Publishing(1)
3Q01 3Q00 Growth Total Operating Revenues $ 496 $ 545 -9.0% Operating Expenses Operational and support expenses 232 244 -4.9% Depreciation and amortization 7 8 -12.5% Total Operating Expenses 239 252 -5.2% Operating Income 257 293 -12.3% Interest Expense 2 1 100.0% Other Income, net 1 1 N/M* Income Before Income Taxes 256 293 -12.6% Provision for Income Taxes 98 112 -12.5% Segment Net Income(1) $ 158 $ 181 -12.7% EBITDA(5) $ 264 $ 301 -12.3% EBITDA margin(6) 53.2% 55.2% -200bps
* - Not meaningful.
Year-to-Date 2001 2000 Growth Total Operating Revenues $1,376 $1,346 2.2% Operating Expenses Operational and support expenses 677 672 0.7% Depreciation and amortization 20 22 -9.1% Total Operating Expenses 697 694 0.4% Operating Income 679 652 4.1% Interest Expense 13 10 30.0% Other Income, net 5 1 N/M Income Before Income Taxes 671 643 4.4% Provision for Income Taxes 257 244 5.3% Segment Net Income(1) $ 414 $ 399 3.8% EBITDA(5) $ 699 $ 674 3.7% EBITDA margin(6) 50.8% 50.1% 70bps
* - Not meaningful. Page 15 BellSouth Corporation Notes (1) Segment net income (loss) is based on normalized results which exclude certain one-time transactions and certain corporate intercompany billings. Intersegment revenues are not eliminated for purposes of management reporting. (2) Results for the Latin America segment are reported one month in arrears. (3) Proportionate basis financial and operating data reflect our ownership interest in the total operating results for each of our wireless properties, both domestic and international, whether or not consolidated for financial statement presentation purposes. (4) Wireless service revenues includes activation fees, access, airtime, roaming, long distance and value added services. Roaming revenues are included on a gross basis for the Domestic Wireless segment and on a net basis for the Latin America segment. (5) EBITDA is defined as operating revenues less operational and support expenses. (6) EBITDA margin is calculated by dividing EBITDA by operating revenues. (7) For the Domestic Wireless segment, Average monthly revenue per customer is calculated by dividing average monthly revenue by average customers. Average monthly revenue includes activation fees, access, airtime, roaming (gross), long distance and value added services. (8) For the Latin America segment, Average monthly revenue per customer is calculated by dividing average monthly revenue by average customers. Average monthly revenue includes activation fees, access, airtime, roaming (net), long distance and value added services. (9) Penetration rate is calculated by dividing customers by POPs (excludes POPs in markets where service has not been initiated). (10) During fourth quarter 2000, we adopted a new method of recognizing revenues and expenses derived from installation and activation activities. We did this to comply with new accounting guidance contained in SAB101, which requires that revenues from such activities be deferred and recognized over the estimated life of the relationship with the customer. As required by SAB101, we retroactively adopted the new method effective January 1, 2000. The retroactive adoption decreased our previously reported revenues and expenses equally by $53 for third quarter 2000 and $151 for the year-to-date period. The adoption did not affect our reported earnings for any 2000 period. Page 16

•		a change in economic conditions in domestic or international markets where we operate or have material investments which would affect demand for our services;

•		significant deterioration in foreign currencies relative to the U.S. dollar in foreign countries in which we operate;

•		changes in U.S. or foreign laws or regulations, or in their interpretations, which could result in the loss, or reduction in value, of our licenses, concessions or markets, or in an increase in competition, compliance costs or capital expenditures;

•		a decrease in the growth rate of demand for the services which we offer;

•		the intensity of competitive activity and its resulting impact on pricing strategies and new product offerings;

•		protracted delay in our entry into the interLATA long distance market;

•		higher than anticipated start-up costs or significant up-front investments associated with new business initiatives;

•		the outcome of pending litigation;

•		unanticipated higher capital spending from, or delays in, the deployment of new technologies;

•		the impact of terrorist attacks on our business; and

•		the impact of the wireless joint venture with SBC Communications, known as Cingular Wireless, including marketing and product development efforts and financial capacity.