OFFERING M E M O R A N D U M$150,000,000

C O R E S T A T E S C A P I T A L II
SKIS™
F l o a t i n g R a t e S u b o r d i n a t e d Capital I n c o m e Securities(Liquidation A m o u n t $1,000 per Capital Security)
Fully and Unconditionally Guaranteed to t h e extent described herein by

CoreStates Bank, N . A .
The Floating Rate Subordinated Capital Income Securities (the "Capital Securities") offered hereby represent undivided beneficial ownership interestsin the assets of CoreStates Capital II, a Delaware statutory business trust (the "Trust"). CoreStates Bank, N.A., a national banking association (the"Company"), will be the owner of all of the beneficial ownership interests represented by common securities of the Trust (the "Common Securities";
together with the Capital Securities, the "Trust Securities"). The Trust exists for the sole purpose of issuing the Capital Securities and the Common
Securities and investing the proceeds thereof in Floating Rate Junior Subordinated Debentures (the "Junior Subordinated Debentures") to be issued by theCompany. The Junior Subordinated Debentures will mature on January 15, 2027 (the "Stated Maturity"). Each holder of a Capital Security will have theright to receive $1,000 per Capital Security in the event of liquidation (the "liquidation amount") and at maturity. The Capital Securities will have apreference under certain circumstances with respect to cash distributions and amounts payable on liquidation, redemption or otherwise over the Common
Securities. See "Description of Capital Securities—Subordination of Common Securities."
Capital Securities issued in registered, global form will be deposited with a custodian for and registered in the name a nominee of The Depository
Trust Company ("DTC") and beneficial interests in such Capital Securities will be shown on and transfers thereof will be effected through records
maintained by D T C and its participants. Capital Securities sold in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities
Act") will be evidenced by global Capital Securities in fully registered form and beneficial interests in such Capital Securities will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests will therefore settle in immediately available funds. Capital Securities soldin reliance on Regulation S ("Regulation S") under the Securities Act, will be evidenced by a separate temporary global Capital Security which will be
exchangeable for a permanent global Capital Security not earlier than 40 days after the closing date upon certification of non-U.S. beneficial ownership, andany Capital Securities sold other than in reliance on Rule 144A or Regulation S will be issued in certificated form.
Application has been made to list the Capital Securities on the Luxembourg Stock Exchange. The Capital Securities will be eligible for quotation in the
Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market of the National Association of Securities Dealers, Inc.
See " R i s k F a c t o r s " b e g i n n i n g o n page 12 h e r e o f for c e r t a i n i n f o r m a t i o n r e l e v a n t t o a n i n v e s t m e n t i n t h e C a p i t a l S e c u r i t i e s .
THE SECURITIES OFFERED HEREBY H A V E N O T BEEN REGISTERED UNDER THE SECURITIES A C T , A N Y STATE SECURITIESLAWS, OR P A R T 16 O F THE REGULATIONS O F THE OFFICE OF THE COMPTROLLER OF THE C U R R E N C Y (THE "OCC") A N D
M A Y N O T BE OFFERED OR SOLD EXCEPT P U R S U A N T T O A N EXEMPTION F R O M THE REGISTRATION REQUIREMENTS O F
THE SECURITIES A C T . ACCORDINGLY, THE SECURITIES ARE BEING OFFERED HEREBY OUTSIDE THE UNITED STATES INCOMPLIANCE W I T H REGULATION S UNDER THE SECURITIES A C T . IN ADDITION, RESPECTIVE AFFILIATES O F THE INITIAL
PURCHASERS A N D THE C O M P A N Y , M A Y OFFER A N D SELL THE SECURITIES OFFERED HEREBY IN THE UNITED STATES ONLY(i) T O QUALIFIED INSTITUTIONAL BUYERS (AS DEFINED IN RULE 144A UNDER THE SECURITIES A C T ) IN RELIANCE O N A N
EXEMPTION F R O M SUCH REGISTRATION REQUIREMENTS PROVIDED BY RULE 144A OR (ii) T O A LIMITED N U M B E R OF O T H E R
INSTITUTIONAL ACCREDITED INVESTORS (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES A C T ) T H A T
EXECUTE A N D DELIVER A LETTER C O N T A I N I N G CERTAIN REPRESENTATIONS A N D AGREEMENTS. PROSPECTIVE
PURCHASERS ARE HEREBY NOTIFIED T H A T SELLERS OF THE SECURITIES M A Y BE RELYING U P O N THE EXEMPTION F R O M
T H E PROVISIONS OF SECTION 5 O F T H E SECURITIES A C T A N D F R O M P A R T 16 O F T H E OCC'S REGULATIONS PROVIDED BY
RULE 144A, REGULATION S O R OTHER EXEMPTIONS. FOR CERTAIN RESTRICTIONS O N RESALES, SEE "NOTICE T O
INVESTORS".
THE SECURITIES OFFERED HEREBY ARE DIRECT A N D UNSECURED OBLIGATIONS O F THE C O M P A N Y , DO N O T EVIDENCEDEPOSITS A N D ARE N O T INSURED BY THE FEDERAL DEPOSIT I N S U R A N C E C O R P O R A T I O N (THE "FDIC") OR ANY O T H E R
INSURER OR G O V E R N M E N T AGENCY. THE SECURITIES OFFERED HEREBY WILL BE SUBORDINATE T O THE CLAIMS OFDEPOSITORS A N D CERTAIN OTHER CREDITORS O F THE C O M P A N Y A N D WILL BE INELIGIBLE AS COLLATERAL T O SECURE A
LOAN F R O M THE C O M P A N Y .
The Capital Securities will initially be offered to investors at $979.88 per Capital Security. The Capital Securities are offered, subject to prior sale,when, as and if issued to and accepted by the Initial Purchasers and subject to certain conditions. It is expected that delivery of the Capital Securities will bemade in book-entry form through the facilities of The Depository Trust Company and in certain circumstances in certificated form on or about
January 23, 1997 at the offices of Lehman Brothers Inc., New York, New York against payment therefor in immediately available funds.

LEHMAN BROTHERS
BEAR, STEARNS INTERNATIONAL LIMITEDCORESTATES CAPITAL MARKETSA DIVISION OF CORESTATES BANK, N.A.

J.P. M O R G A N S E C U R I T I E S L T D .
DEUTSCHE MORGAN GRENFELL

January 16, 1997

SALOMON BROTHERS INTERNATIONALUBS

LIMITED
LIMITEDIN CONNECTION WITH THIS OFFERING, LEHMAN BROTHERS INTERNATIONAL(EUROPE) MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE CAPITAL SECURITIES AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED IN THE OVER-THE-COUNTER MARKET, THROUGH PORTAL OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Holders of the Capital Securities will be entitled to receive cumulative cash distributions accruing from thedate of original issuance and payable quarterly in arrears on the 15th day of January, April, July and October of
each year, commencing April 15, 1997, at a variable annual rate equal to LIBOR (as defined herein) plus 65%
on the liquidation amount of $1,000 per Capital Security ("Distributions"). The distribution rate and the
distribution payment dates and other payment dates for the Capital Securities will correspond to the interest rateand interest payment dates and other payment dates on the Junior Subordinated Debentures, which will be thesole assets of the Trust. The Company will guarantee the payment of Distributions and payments on liquidationof the Trust or redemption of the Capital Securities, but only in each case to the extent of funds held by theTrust, as described herein (the "Guarantee"). See "Description of Guarantee." If the Company does not makeinterest payments on the Junior Subordinated Debentures held by the Trust, the Trust will have insufficient funds
to pay Distributions on the Capital Securities. The Company's obligations under the Guarantee, taken together
with its obligations under the Junior Subordinated Debentures and the Indenture (as defined herein), including its
obligation to pay all costs, expenses and liabilities of the Trust (other than with respect to the Capital Securities),
constitute a full and unconditional guarantee of all of the Trust's obligations under the Capital Securities. The
obligations of the Company under the Guarantee and the Junior Subordinated Debentures are subordinate andjunior in right of payment to all Indebtedness (as defined in "Description of Junior Subordinated Debentures—
Subordination") of the Company and will be structurally subordinated to all liabilities and obligations of theCompany's subsidiaries. As of September 30, 1996, approximately $33 billion (which includes approximately$32 billion of bank deposits) aggregate principal amount of Indebtedness (restated to include the accounts of
New Jersey National Bank ("New Jersey National"), which was merged into the Company on December 6,
1996) was outstanding. The terms of the Junior Subordinated Debentures place no limitation on the amount of
Indebtedness that may be incurred by the Company or on the amount of liabilities and obligations of theCompany's subsidiaries. See "Description of Junior Subordinated Debentures—Subordination."
The Company has the right to defer payment of interest on the Junior Subordinated Debentures at any timeor from time to time for a period not exceeding 20 consecutive quarters with respect to each deferral period(each, an "Extension Period"), provided that no Extension Period may extend beyond the Stated Maturity of the
Junior Subordinated Debentures. Upon the termination of any such Extension Period and the payment of allamounts then due on any Interest Payment Date (as defined herein), the Company may elect to begin a new
Extension Period subject to the requirements set forth herein. Accordingly, there could be multiple Extension
Periods of varying lengths throughout the term of the Junior Subordinated Debentures. If interest payments on
the Junior Subordinated Debentures are so deferred, distributions on the Capital Securities will also be deferred
and the Company may not, and may not permit any subsidiary of the Company to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, theCompany's capital stock or (ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or junior to the Junior SubordinatedDebentures or make any guarantee payments with respect to any guarantee by the Company of the debt securities
of any subsidiary of the Company if such guarantee ranks pari passu with or junior to the Junior SubordinatedDebentures (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of theCompany in connection with any employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or consultants, or in connection with a dividend
reinvestment or stockholder stock purchase plan, (b) as a result of an exchange or conversion of any class orseries of the Company's capital stock (or any capital stock of a subsidiary of the Company) for any class orseries of the Company's capital stock or of any class or series of the Company's indebtedness for any class orseries of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capitalstock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or2exchanged, (d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance ofrights, stock or other properly under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend
stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid (or ranks pari passu with or junior to such stock)). During an Extension Period,
interest on the Junior Subordinated Debentures will continue to accrue (and the amount of Distributions to which
holders of the Capital Securities are entitled will accumulate) at a variable rate equal to LIBOR plus .65%,
compounded quarterly, and holders of the Capital Securities will be required to accrue interest income for UnitedStates federal income tax purposes prior to receipt of the cash related to such interest income. See "Descriptionof Junior Subordinated Debentures—Option to Extend Interest Payment Period" and "Certain United States
Federal Income Tax Consequences—Interest Income and Original Issue Discount."
The Junior Subordinated Debentures are not redeemable prior to January 15, 2007 unless a Special Event(as defined herein) has occurred. The Junior Subordinated Debentures are redeemable prior to maturity at theoption of the Company, subject to the receipt of any necessary prior approval from the OCC (i) on or afterJanuary 15, 2007, in whole or in part, at a redemption price equal to the principal amount of the Junior
Subordinated Debentures so redeemed plus the accrued and unpaid interest thereon to the redemption date, or(ii) at any time, in whole (but not in part), upon the occurrence and continuation of a Special Event, at such
redemption price. The Capital Securities are subject to mandatory redemption, in whole or in part, upon
repayment of the Junior Subordinated Debentures at Stated Maturity or their earlier redemption, in an amountequal to the amount of related Junior Subordinated Debentures maturing or being redeemed and at a redemption
price equal to the redemption price of such Junior Subordinated Debentures, in each case plus accumulated andunpaid Distributions thereon to the date of redemption.
Upon the occurrence and continuation of a Special Event, the Company will have the right, subject to thereceipt of any necessary prior approval from the OCC, to dissolve the Trust and cause the Junior SubordinatedDebentures to be distributed to the holders of the Capital Securities and the Common Securities in liquidation of
the Trust. See "Description of Capital Securities—Redemption—Special Event Redemption or Distribution of
Junior Subordinated Debentures."In the event of the liquidation of the Trust, after satisfaction of the claims of creditors of the Trust, if any,as provided by applicable law, the holders of the Capital Securities will be entitled to receive a liquidation
amount of $ 1,000 per Capital Security plus accumulated and unpaid Distributions thereon to the date of payment,
which may be in the form of a distribution of such amount in Junior Subordinated Debentures as described above.
If such liquidation amount can be paid only in part because the Trust has insufficient assets available to pay infull the aggregate liquidation amount, then the amounts payable directly by the Trust on the Capital Securities
shall be paid on a pro rata basis. The holder(s) of the Common Securities will be entitled to receive distributions
upon any such liquidation pro rata with the holders of the Capital Securities, except that if an Indenture Event of
Default (as defined herein) has occurred and is continuing, the Capital Securities will have a priority over the
Common Securities. See "Description of Capital Securities—Liquidation Distribution Upon Dissolution."
Each person receiving this Offering Memorandum acknowledges that (i) such person has been afforded an
opportunity to request and to review, and has received, all additional information considered by it to be necessary
to verify the accuracy of or to supplement the information herein and (ii) such person has not relied on the Initial
Purchasers or any person affiliated with the Initial Purchasers in connection with its investigation of the accuracyof such information or its investment decision.
The distribution of this Offering Memorandum and the offering of the Capital Securities in certain
jurisdictions may be restricted by law. Persons into whose possession this Offering Memorandum comes are
required by the Initial Purchasers, the Trust and the Company to inform themselves about and to observe any
such restrictions. This Offering Memorandum does not constitute, and may not be used for or in connection with,
an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or toany person to whom it is unlawful to make such offer or solicitation. For a further description of restrictions onoffers and sales, see "Plan of Distribution" and "Notice to Investors."
3

No action has been taken by the Company, the Trust or the Initial Purchasers that would permit an offeringof the Capital Securities or the circulation or distribution of this Offering Memorandum or any offering material
in relation to the Company, the Trust or the Capital Securities in any country or jurisdiction where action forthat purpose is required.
THE CONTENTS OF THIS OFFERING MEMORANDUM ARE NOT TO BE CONSTRUED AS LEGAL,
BUSINESS OR TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWNATTORNEY, BUSINESS ADIVSOR OR TAX ADVISOR AS TO LEGAL, BUSINESS AND TAX ADVICE.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY, THE TRUST AND THE TERMS OF THE OFFERING, INCLUDING
THE MERITS AND RISKS INVOLVED. THE CAPITAL SECURITIES HAVE NOT BEEN
RECOMMENDED BY THE OCC OR ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOTCONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE CAPITAL SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY ANDRESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT, PART 16 OF THE REGULATIONS OF THE OCC AND APPLICABLE STATESECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORSSHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THISINVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE BY THE INITIAL
PURCHASERS AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTHHEREIN, AND NOTHING CONTAINED IN THIS OFFERING MEMORANDUM IS, OR SHALL BE
RELIED UPON AS, A PROMISE OR REPRESENTATION WHETHER AS TO THE PAST OR THE
FUTURE. THE INITIAL PURCHASERS HAVE NOT INDEPENDENTLY VERIFIED ANY OF SUCHINFORMATION AND ASSUME NO RESPONSIBILITY FOR ITS ACCURACY OR COMPLETENESS.
NO EMPLOYEE BENEFIT OR OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT SUBJECTTO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'SINVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLANASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASE OR HOLDING IS COVERED BY THE EXEMPTIVE RELIEF
PROVIDED BY U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITHRESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITALSECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITSPURCHASE AND HOLDING THEREOF THAT EITHER (A) THE PURCHASER AND HOLDER IS NOT A
PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF
OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) THE PURCHASE AND HOLDING OF THE CAPITALSTOCKS IS COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96-23, 95-60, 91-38, 90-1,
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE ORHOLDING.

4

NOTICE TO NEW HAMPSHIRE INVESTORSNEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B WITH THE STATE OF NEW HAMPSHIRENOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS
LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE
SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE
AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION
OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS
OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR
TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY PROSPECTIVE
PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE
PROVISIONS OF THIS PARAGRAPH.

No person has been authorized to give any information or to make any representations other than thosecontained in this Offering Memorandum, and, if given or made, such information or representation mustnot be relied upon as having been authorized. This Offering Memorandum does not constitute an offer tosell or the solicitation of an offer to buy any securities other than the securities described in this Offering
Memorandum or an offer to sell or the solicitation of an offer to buy such securities in any circumstancesin which such offer or solicitation is unlawful. Neither the delivery of this Offering Memorandum nor any
sale made hereunder shall, under any circumstances, create any implication that the information contained herein is correct as of any time subsequent to the date of such information.

TABLE OF CONTENTS
Page

Available Information
Incorporation of Certain Information by Reference
Offering Memorandum Summary
Risk Factors
Use of Proceeds
Ratio of Earnings to Fixed Charges
Accounting Treatment
Capitalization
Selected Unaudited Financial Data of the Company
The Trust
Description of Capital Securities
Description of Junior Subordinated Debentures
Description of Guarantee
Relationship Among The Capital Securities, the Junior Subordinated Debentures and the Guarantee
Certain United States Federal Income Tax Consequences
Book-Entry Issuance
Notice to Investors
Benefit Plan Considerations
Supervision, Regulation and Other Matters
Plan of Distribution
Legal Matters
Independent Auditors
Appendix A—Form of Institutional Accredited Investor Letter

5

6
7
8
12
16
16
16
17
18
19
20
31
39
41
43
48
52
55
56
59
60
60

AVAILABLE INFORMATIONThe Company submits quarterly to the OCC certain reports called "Consolidated Reports of Condition andIncome" ("Call Reports"). The Call Reports are publicly available at the OCC, 250 E Street, S.W., Washington,
D.C. 20219. Each Call Report consists of a Balance Sheet, Income Statement, Changes in Equity Capital andother supporting schedules as of and for the period to which the report relates. The Call Reports are prepared inaccordance with regulatory instructions issued by the Federal Financial Institutions Examination Council.
Because of the special supervisory, regulatory and economic policy needs served by these Call Reports, thoseregulatory instructions do not in all cases follow generally accepted accounting principles. While the Call Reports
are supervisory and regulatory documents, not primarily accounting documents, and do not provide a complete
range of financial disclosure about the Company, the reports nevertheless provide important information
concerning the Company.
The Company is a wholly-owned subsidiary of CoreStates Financial Corp (the "Holding Corporation" andtogether with its subsidiaries, "Holdings"), a bank holding company organized under the laws of theCommonwealth of Pennsylvania. The Holding Corporation is subject to the reporting requirements of Sections
13 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any reports and otherinformation filed by the Holding Corporation with the Securities and Exchange Commission (the"Commission") may be inspected and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices in
Chicago, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and in New York, Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material may also be obtained by mail fromthe Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants, such as the Holding Corporation,
mat file electronically with the Commission.
No separate financial statements of the Trust have been included herein and no separate financial statements
will be prepared in the future. The Company and the Trust do not consider that such financial statements would
be material to holders of the securities offered hereby because (i) all of the voting securities of the Trust will beowned, directly or indirectly, by the Company, (ii) the Trust has no independent operations and exists for mesole purpose of issuing securities representing undivided beneficial interests in the assets of the Trust andinvesting the proceeds thereof in the representative series of Junior Subordinated Debentures issued by theCompany, and (iii) the obligations of the Trust under its Capital Securities are fully and unconditionally
guaranteed by the Company to the extent the Trust has funds available to meet such obligations.
The Company has agreed that it will furnish to holders and beneficial owners of the Capital Securities andthe prospective purchasers designated by such holders the information required to be delivered pursuant to Rule144(d)(4) under the Securities Act (or any successor regulation or a statute) to permit compliance with Rule 144A
in connection with the resales of the Capital Securities.

6

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Call Reports filed with the OCC by the Company and by New Jersey National, (a wholly-owned
subsidiary of the Holding Corporation that was merged into the Company on December 6, 1996) for the quarter
ended September 30, 1996 are incorporated herein by reference.
In addition to the Call Reports referred to above, the following documents, which have been filed by theHolding Corporation with the Commission, are incorporated by reference in this Offering Memorandum:(i) the Holding Corporation's Annual Report on Form 10-K for the year ended December 31, 1995;(ii) the Holding Corporation's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996; and(iii) the Holding Corporation's Current Reports on Form 8-K dated January 8, 1996, January 17, 1996,
April 3, 1996, April 9, 1996, April 17, 1996, June 13, 1996, June 28, 1996, July 17, 1996, October 16,
1996 and on Form 8-K/A on July 17, 1996.
All documents filed by the Holding Corporation pursuant to Sections 13(a), 14 or 15(d) of the ExchangeAct, and the non-confidential portions of all Call Reports filed by the Company with the OCC, after the date ofthis Offering Memorandum and prior to the termination of the offering hereunder shall be deemed to beincorporated by reference in this Offering Memorandum and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference or deemed to be incorporated byreference herein shall be deemed to be modified or superseded for all purposes of this Offering Memorandum tothe extent that a statement contained herein or in any subsequently filed document that is also incorporated ordeemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of thisOffering Memorandum.
All information relating to the Holding Corporation is included or incorporated by reference herein
for informational purposes only and the Offered Securities are neither obligations of nor guaranteed by
the Holding Corporation or any of its affiliates other than the Company and the Trust.
The Company will provide without charge to each person to whom a copy of this Offering Memorandum
has been delivered, on the written or oral request of such person, a copy of any or all of the documents referred
to above that have been or may be incorporated in this Offering Memorandum by reference, other than exhibits
to such documents, unless such exhibits are specifically incorporated by reference therein. Requests for suchcopies should be directed to: CoreStates Financial Corp, Centre Square, West Tower, 1500 Market Street,
Philadelphia, PA 19101, Attention: Investor Relations. In addition, such documents are available, free of charge,
from Chase Manhattan Bank Luxembourg, S.A., 5 Rue Plaetia, L-2338, Luxembourg.

7

OFFERING MEMORANDUM SUMMARY
This summary is qualified by the more detailed information and financial statements appearing elsewhere,
or incorporated by reference, in this Offering Memorandum. Prospective investors are urged to read thisOffering Memorandum in its entirety.
The Company
The Company is a national banking association with its principal office in Philadelphia, Pennsylvania. The
Company offers a wide range of domestic and international commercial banking, retail banking and trust andasset management services to its customers. At September 30, 1996, the Company had total assets of $34.2
billion, total loans (net of unearned income) of $24.3 billion, total deposits of $25.9 billion and total equity
capital of $2.6 billion. On December 6, 1996, New Jersey National merged with and into the Company. At
September 30, 1996, New Jersey National had total assets of $8.0 billion, total loans (net of unearned income)of $5.1 billion, total deposits of $7.0 billion and total equity capital of $0.5 billion. The Company was created,pursuant to a merger of two banks, on October 1, 1990.
The Company's business is subject to examination and regulation by federal banking authorities. Its primaryfederal bank regulatory authority is the OCC. The Company is a wholly-owned subsidiary of the Holding
Corporation, a bank holding company organized under the laws of the Commonwealth of Pennsylvania. The
Holding Corporation, through its subsidiaries, provides a broad range of financial services.
The Company's principal address is Centre Square, West Tower, 1500 Market St., Philadelphia, PA 19101.
The Offering
The Trust

CoreStates Capital II, a Delaware statutory business trust. The sole assetsof the Trust will be the Junior Subordinated Debentures.

Securities Offered

Capital Securities evidencing undivided beneficial ownership interests inthe assets of the Trust. The holders thereof will be entitled to a preference in certain circumstances with respect to Distributions and amounts
payable on redemption, liquidation or otherwise over the Common
Securities.

Distributions

Holders of the Capital Securities will be entitled to receive cumulative cash
distributions at a variable annual rate equal to LIBOR plus .65% on theliquidation amount of $1,000 per Capital Security, accruing from thedate of original issuance and payable quarterly in arrears on the 15th day
of January, April, July and October of each year commencing on
April 15, 1997. The distribution rate and the distribution and other payment dates for the Capital Securities will correspond to the interest rateand interest and other payment dates on the Junior Subordinated Debentures. See "Description of Capital Securities."

Junior SubordinatedDebentures

The Trust will invest the proceeds from the issuance of the Capital Securities and Common Securities in an equivalent principal amount of Junior
Subordinated Debentures of the Company. The Junior Subordinated Debentures will mature on January 15, 2027. The Junior SubordinatedDebentures will rank subordinate and junior in right of payment to all
Indebtedness of the Company to the extent described herein. In addition,
the Company's obligations under the Junior Subordinated Debentures
will be effectively subordinated to all existing and future liabilities andobligations of its subsidiaries. See "Risk Factors—Ranking of Subordi-

8

nated Obligations Under the Guarantee and the Junior Subordinated Debentures" and "Description of Junior Subordinated Debentures—Subordination."
Guarantee

Payment of distributions out of moneys held by the Trust, and paymentson liquidation of the Trust or the redemption of Capital Securities, areguaranteed by the Company to the extent the Trust has funds available
therefor. If the Company does not make principal or interest paymentson the Junior Subordinated Debentures, the Trust will not have sufficient
funds to make Distributions on the Capital Securities, in which event the
Guarantee shall not apply to such Distributions until the Trust has sufficient funds available therefor. The Company's obligations under the
Guarantee, taken together with its obligations under the Junior Subordinated Debentures and the Indenture, including its obligation to pay all
costs, expenses and liabilities of the Trust (other than with respect to theCapital Securities), constitute a full and unconditional guarantee of allof the Trust's obligations under the Capital Securities, See "Descriptionof Guarantee" and "Relationship Among the Capital Securities, theJunior Subordinated Debentures and the Guarantee." The obligations of
the Company under the Guarantee are subordinate and junior in right of
payment to all Indebtedness of the Company to the extent describedherein. See "Risk Factors—Ranking of Subordinated Obligations Under
the Guarantee and the Junior Subordinated Debentures" and "Description of Guarantee."Right to Defer Interest

The Company has the right to defer payment of interest on the Junior
Subordinated Debentures by extending the interest payment period on
the Junior Subordinated Debentures, from time to time, for up to 20
consecutive quarters. There could be multiple Extension Periods of varying lengths throughout the term of the Junior Subordinated Debentures. If interest payments on the Junior Subordinated Debentures are so
deferred, distributions on the Capital Securities will also be deferred foran equivalent period and the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, the Company's capital stock or (ii) make any paymentof principal, interest or premium, if any, on or repay, repurchase orredeem any debt securities that rank pari passu with or junior to the
Junior Subordinated Debentures or make any guarantee payments withrespect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or
junior to the Junior Subordinated Debentures (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit planor other similar arrangement with or for the benefit of any one or more
employees, officers, directors or consultants, or in connection with adividend reinvestment or stockholder stock purchase plan, (b) as a resultof an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for
any class or series of the Company's capital stock or of any class or9series of the Company's indebtedness for any class or series of theCompany's capital stock, (c) the purchase of fractional interests inshares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection
with any stockholder's rights plan, or the issuance of rights, stock orother property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form ofstock, warrants, options or other rights where the dividend stock or thestock issuable upon exercise of such warrants, options or other rights isthe same stock as that on which the dividend is being paid (or ranks paripassu with or junior to such stock)). During an Extension Period, interest on the Junior Subordinated Debentures will continue to accrue (andthe amount of Distributions to which holders of the Capital Securities
are entitled will accumulate) at a variable annual rate equal to LIBOR
plus .65%, compounded quarterly. During an Extension Period, holders
of Capital Securities will be required to include the interest accrued on
their pro rata share of the Junior Subordinated Debentures in their grossincome as original issue discount ("OID") even though the cash payments attributable thereto have not been made. See "Description of
Junior Subordinated Debentures—Option to Extend Interest Payment
Period" and "Certain United States Federal Income Tax Consequences—Interest Income and Original Issue Discount."
Redemption

The Junior Subordinated Debentures are redeemable by the Company inwhole or in part on or after January 15, 2007, or at any time, in whole
but not in part, upon the occurrence of a Special Event, in either casesubject to any necessary prior approval of the OCC. If the Junior Subordinated Debentures are redeemed, the Trust must redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Junior Subordinated Debentures so redeemed. The
Trust Securities will be redeemed upon maturity of the Junior Subordinated Debentures. See "Description of Capital Securities—Redemption—Mandatory Redemption" and "—Special Event Redemption or Distribution of Junior Subordinated Debentures."

Liquidation of the Trust

Upon the occurrence and continuation of a Special Event, the Company
will have the right, subject to any necessary prior approval of the OCC,
to dissolve the Trust and cause the Junior Subordinated Debentures tobe distributed to the holders of the Capital Securities and the Common
Securities in liquidation of the Trust. See "Description of Capital Securities—Redemption—Special Event Redemption or Distribution of Junior Subordinated Debentures."In the event of the liquidation of the Trust, after satisfaction of the claimsof creditors of the Trust, if any, as provided by applicable law, theholders of the Capital Securities will be entitled to receive a liquidation
amount of $1,000 per Capital Security plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the formof a distribution of such amount in Junior Subordinated Debentures as
described above. If such Liquidation Distribution (as defined herein) can10be paid only in part because the Trust has insufficient assets available topay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Capital Securities shall be paid on a
pro rata basis. The holder(s) of the Common Securities will be entitled
to receive distributions upon any such liquidation pro rata with the holders of the Capital Securities, except that if an Indenture Event of Default
has occurred and is continuing, the Capital Securities shall have a priority over the Common Securities. See "Description of Capital Securities—Liquidation Distribution Upon Dissolution."
Use of Proceeds

The proceeds from the sale of the Capital Securities will be used to purchase the Junior Subordinated Debentures. The Company expects to use
the proceeds from the sale of the Junior Subordinated Debentures forgeneral corporate purposes, which may include the repayment of indebtedness, investments in and extensions of credit to its subsidiaries and thefinancing of possible acquisitions. Although the Company from time totime evaluates potential acquisitions, it currently has no understandings,
commitments or agreements with respect to any acquisitions. See "Useof Proceeds."

Ratings

It is expected that the Capital Securities will be rated " a 1 " by Moody's
Investors Service, Inc. and "A — " by Standard & Poor's Ratings
Group. A security rating is not a recommendation to buy, sell or holdsecurities and may be subject to revision or withdrawal at any time by
the assigning rating organization.

Form of Capital Securities

Capital Securities offered and sold to qualified institutional buyers in reliance on Rule 144A initially will be represented by one or more Capital
Securities in registered, global form. Capital Securities offered and soldto institutional accredited investors in transactions exempt from registration under the Securities Act not made in reliance on Rule 144A or
Regulation S will be issued only in registered, certificated form. Capital
Securities offered and sold outside of the United States in reliance on
Regulation S under the Securities Act will be issued in the form of asingle temporary global Capital Security which will be exchanged forbeneficial interests in a single permanent global Capital Security upon
the later of (i) the Restricted Period (as defined herein) and (ii) the firstdate on which the requisite certifications are provided to the Property
Trustee as described under "Book-Entry Issuance—Payments; Certifications by Holders of Regulation S Temporary Capital Securities."

Listing/Applications

Application has been made to list the Capital Securities on the
Luxembourg Stock Exchange and for trading of the Capital Securities
in the PORTAL Market.

11

RISK FACTORS
Prospective purchasers of the Capital Securities should carefully review the information contained
elsewhere in this Offering Memorandum and should particularly consider the following matters. Certain
statements in this Offering Memorandum and documents incorporated herein by reference are forward-looking
and are identified by the use of forward-looking words or phrases such as ' 'intended,'' ' 'will be positioned,''"expects," is or are "expected," "anticipates," and "anticipated." These forward-looking statements are
based on the Company's current expectations. To the extent any of the information contained or incorporated byreference in this Offering Memorandum constitutes a "forward-looking statement" as defined in Section
21E(i)(l) of the Exchange Act, the risk factors set forth below are cautionary statements identifying importantfactors that could cause actual results to differ materially from those in the forward-looking statement.
Ranking of Subordinated Obligations under the Guarantee and the Junior Subordinated Debentures
The obligations of the Company under the Guarantee issued by the Company for the benefit of the holders
of Capital Securities and under the Junior Subordinated Debentures are unsecured and rank subordinate andjunior in right of payment to all Indebtedness of the Company to the extent described herein. At September 30,
1996, the Indebtedness of the Company (restated to include the accounts of New Jersey National which wasmerged into the Company in December 1996) aggregated approximately $33 billion (which includes
approximately $32 billion in bank deposits). Neither the Indenture, the Guarantee nor the Declaration (as defined
herein) places any limitation on the amount of secured or unsecured Indebtedness that may be incurred by theCompany or on the amount of liabilities and obligations of the Company's subsidiaries. See "Description of
Guarantee—Status of the Guarantee" and "Description of Junior Subordinated Debentures—Subordination."
Enforcement of Certain Rights by Holders of Capital Securities
If a Trust Enforcement Event (as defined herein) occurs and is continuing, then the holders of Capital
Securities would rely on the enforcement by the Property Trustee (as defined herein) of its rights as a holder of
the Junior Subordinated Debentures against the Company. The holders of a majority in liquidation amount of theCapital Securities will have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon theProperty Trustee under the Declaration, including the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Junior Subordinated Debentures. If the Property Trustee fails to enforce its rights
with respect to the Junior Subordinated Debentures held by the Trust, any record holder of Capital Securities
may, to the fullest extent permitted by law, institute legal proceedings directly against the Company to enforce
the Property Trustee's rights under such Junior Subordinated Debentures without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
If the Company were to default on its obligation to pay amounts payable under the Junior SubordinatedDebentures, the Trust would lack funds for the payment of Distributions or amounts payable on redemption of
the Capital Securities or otherwise, and, in such event, holders of the Capital Securities would not be able to rely
upon the Guarantee for payment of such amounts. However, in the event the Company failed to pay interest on
or principal of the Junior Subordinated Debentures on the payment date on which such payment is due andpayable, then a holder of Capital Securities may institute a proceeding directly against the Company under the
Indenture for enforcement of payment to such holder of the interest on or principal of Junior SubordinatedDebentures having a principal amount equal to the aggregate liquidation amount of the Capital Securities of suchholder (a "Direct Action"). In connection with such Direct Action, the Company will be subrogated to the rights
of such holder of Capital Securities under the Declaration to the extent of any payment made by the Company tosuch holder of Capital Securities in such Direct Action. Except as set forth herein, holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders of Junior Subordinated Debentures
or assert directly any other rights in respect of the Junior Subordinated Debentures. See "Description of Capital
Securities—Trust Enforcement Events", "Description of Guarantee" and "Description of Junior SubordinatedDebentures—Indenture Events of Default." The Declaration provides that each holder of Capital Securities by
acceptance thereof agrees to the provisions of the Guarantee and the Indenture.
12

Option to Extend Interest Payment Period; Tax Consequences
The Company has the right under the Indenture to defer the payment of interest on the Junior SubordinatedDebentures at any time or from time to time for a period not exceeding 20 consecutive quarters, provided that no
Extension Period may extend beyond the Stated Maturity of the Junior Subordinated Debentures. As aconsequence of any such deferral, quarterly Distributions on the Capital Securities by the Trust will be deferredduring any such Extension Period but would continue to accumulate at a variable annual rate equal to LIBOR
plus .65%, compounded quarterly during any such Extension Period. During any such Extension Period, theCompany may not, and may not permit any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of theCompany's capital stock or (ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu with or junior to the Junior
Subordinated Debentures or make any guarantee payments with respect to any guarantee by the Company of thedebt securities of any subsidiary of the Company if such guarantee ranks pari passu with or junior to the Junior
Subordinated Debentures (other than (a) repurchases, redemptions or other acquisitions of shares of capital stockof the Company in connection with any employment contract, benefit plan or other similar arrangement with orfor the benefit of any one or more employees, officers, directors or consultants, or in connection with a dividend
reinvestment or stockholder stock purchase plan, (b) as a result of an exchange or conversion of any class orseries of the Company's capital stock (or any capital stock of a subsidiary of the Company) for any class orseries of the Company's capital stock or of any class or series of the Company's indebtedness for any class orseries of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capitalstock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance ofrights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend
stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid (or ranks pari passu with or junior to such stock)). Prior to the termination of
any such Extension Period, the Company may further extend the Extension Period, provided that no Extension
Period may exceed 20 consecutive quarters or extend beyond the Stated Maturity of the Junior SubordinatedDebentures. Upon the termination of any Extension Period and the payment of all amounts then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period subject to the above
requirements. See "Description of Capital Securities—Distributions" and "Description of Junior SubordinatedDebentures—Option to Extend Interest Payment Period."
Should the Company defer payment of interest on the Junior Subordinated Debentures, a holder of Capital
Securities will be required to accrue income (in the form of OID) for United States federal income tax purposesin respect of its pro rata share of the Junior Subordinated Debentures held by the Trust. As a result, a holder ofCapital Securities will be required to include such interest income in gross income for United States federal
income tax purposes in advance of the receipt of cash attributable to such interest income, and will not receive
the cash related to such income from the Trust if the holder disposes of the Capital Securities prior to the record
date for the payment of Distributions with respect to such Extension Period. See "Certain United States Federal
Income Tax Consequences—Interest Income and Original Issue Discount" and "—Sales of Capital Securities."
The Company has no current intention of exercising its right to defer payments of interest by extending theinterest payment period on the Junior Subordinated Debentures. However, should the Company elect to exercise
such right in the future, the market price of the Capital Securities is likely to be adversely affected. A holder that
disposes of its Capital Securities during an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Capital Securities. In addition, as a result of the Company's
right to defer interest payments, the market price of the Capital Securities (which represent preferred undivided
beneficial interests in the Junior Subordinated Debentures) may be more volatile man the market prices of othersimilar securities where the issuer does not have such right to defer interest payments.
13

Special Event Redemption; Proposed Tax Law Changes
Upon the occurrence and continuation of a Special Event, the Company has the right, subject to any
necessary prior approval of the OCC, to redeem the Junior Subordinated Debentures in whole (but not in part)within 90 days following the occurrence of such Special Event and thereby cause a mandatory redemption of theCapital Securities and Common Securities. A "Special Event" means a Tax Event, a Regulatory Capital Eventor an Investment Company Event (each as defined herein).
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was introduced in the 104th
Congress which would have, among other things, generally denied interest deductions for interest on an
instrument, issued by a corporation, that has a maximum term of more than 20 years and that is not shown asindebtedness on the separate balance sheet of the issuer or, where the instrument is issued to a related party (otherthan a corporation), where the holder or some other related party issues a related instrument that is not shown asindebtedness on the issuer's consolidated balance sheet. The above-described provision of the Bill was proposed
to be effective generally for instruments issued on or after December 7, 1995. If this provision were to apply to
the Junior Subordinated Debentures, the Company would not be able to deduct interest on the Junior
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate Finance and House Waysand Means Committees issued a joint statement (the "Joint Statement") to the effect that it was their intention
that the effective date of the Bill, if enacted, would be no earlier than the date of appropriate Congressional
action. In addition, subsequent to the publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials
concurring with the view expressed in the Joint Statement (the "Democrat Letters"). The 104th Congress
adjourned without enacting the Bill. Moreover, if the principles contained in the Joint Statement and the
Democrat Letters were followed, any similar legislation that is subsequently proposed or enacted would not apply
to the Junior Subordinated Debentures. It is possible that similar legislative proposals may be offered by the
Administration and considered by Congress in 1997. There can be no assurance that future legislative or
administrative proposals or final legislation will not adversely affect the ability of the Company to deduct intereston the Junior Subordinated Debentures or otherwise affect the tax treatment described herein. Such a change,
therefore, could give rise to a Tax Event, which would permit the Company to cause a redemption of the Capital
Securities or to dissolve the Trust and distribute the Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust as described more fully under "Description of Capital Securities—
Redemption—Special Event Redemption or Distribution of Junior Subordinated Debentures."
Liquidation Distribution of Junior Subordinated Debentures
Upon the occurrence and continuation of a Special Event the Company will have the right, subject to any
necessary prior approval of the OCC, to dissolve the Trust and, after satisfaction of the claims of creditors of theTrust, if any, as provided by applicable law, cause the Junior Subordinated Debentures to be distributed to theholders of the Capital Securities and the Common Securities in liquidation of the Trust. In addition, uponliquidation of the Trust and certain other events, after satisfaction of the claims of creditors of the Trust, if any,as provided by applicable law, the Junior Subordinated Debentures may be distributed to such holders. Under
current United States federal income tax law and interpretations thereof and assuming, as expected, the Trust istreated as a grantor trust for United States federal income tax purposes, a distribution by the Trust of the Junior
Subordinated Debentures pursuant to a liquidation of the Trust will not be a taxable event to the Trust or toholders of the Capital Securities, and will result in a holder of the Capital Securities receiving directly suchholder's pro rata share of the Junior Subordinated Debentures (previously held indirectly through the Trust). If,
however, the liquidation of the Trust were to occur because the Trust is subject to United States federal income
tax with respect to income accrued or received on the Junior Subordinated Debentures as a result of theoccurrence of a Tax Event or otherwise, the distribution of Junior Subordinated Debentures to holders of theCapital Securities by the Trust could be a taxable event to the Trust and each such holder, and holders of theCapital Securities may be required to recognize gain or loss as if they had exchanged their Capital Securities for
the Junior Subordinated Debentures they receive upon the liquidation of the Trust. See "Certain United States
Federal Income Tax Consequences—Distribution of Junior Subordinated Debentures or Cash Upon Liquidationof the Trust."
14

There can be no assurance as to the market prices for Capital Securities or Junior Subordinated Debenturesthat may be distributed in exchange for Capital Securities if a liquidation of the Trust occurs. Accordingly, theCapital Securities that an investor may purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Junior Subordinated Debentures that a holder of Capital Securities may receive on liquidation of
the Trust, may trade at a discount to the price that the investor paid to purchase the Capital Securities offered
hereby. Because holders of Capital Securities may receive Junior Subordinated Debentures on termination of theTrust, prospective purchasers of Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debentures and should carefully review all the information regarding the Junior
Subordinated Debentures contained herein. See "Description of Capital Securities—Redemption—Special Event
Redemption or Distribution of Junior Subordinated Debentures" and "Description of Junior SubordinatedDebentures—General.''Limited Voting Rights
Holders of Capital Securities generally will have limited voting rights relating only to the modification of
the Capital Securities and certain other matters described herein. Holders of Capital Securities will not be entitledto vote to appoint, remove or replace any of the Trustees (as defined below), which voting rights are vested
exclusively in the holder of the Common Securities, unless a Declaration Event of Default shall have occurredand is continuing. The Trustees and the Company may amend the Declaration without the consent of holders ofCapital Securities to ensure that the Trust will be classified as a grantor trust for United States federal income
tax purposes even if such action adversely affects the interests of such holders. See "Description of Capital
Securities—Voting Rights; Amendment of the Declaration."
Absence of Public Market; Restrictions on Transfer
Prior to this offering there has been no public market for the Capital Securities. The Initial Purchasers haveadvised the Company that they intend to make a market in the Capital Securities after the consummation of thisoffering, as permitted by applicable laws and regulations; however, the Initial Purchasers are not obligated to doso, and may discontinue any such market making activities at any time without notice. Therefore, there can be
no assurance that an active market for the Capital Securities will develop. If a trading market for the Capital
Securities does develop, the Capital Securities may trade at a discount from their initial offering price depending
upon prevailing interest rates, the market for similar securities, the performance of the Company and otherfactors. Application has been made to list the Securities on the Luxembourg Stock Exchange.
The Capital Securities have not been registered under the Securities Act or Part 16 of the regulations of the
OCC. The Capital Securities may only be offered or sold pursuant to an exemption from the registration
requirements of the Securities Act, Part 16 of the OCC's regulations and applicable state securities laws or
pursuant to an effective registration statement under the Securities Act, Part 16 of the OCC's regulations andapplicable state securities laws. See "Description of Capital Securities" and "Plan of Distribution."
Consequences of Highly Leveraged Transaction
The Indenture does not contain any provisions that afford holders of the Junior Subordinated Debenturesprotection in the event of a highly leveraged transaction, including a change of control, or other similartransactions involving the Company that may adversely affect such holders. See "Description of Junior
Subordinated Debentures."15

USE OF PROCEEDSAll of the net proceeds from the sale of Capital Securities, which total approximately $146,982,000, will be
invested by the Trust in Junior Subordinated Debentures. The Company expects to use the proceeds from thesale of such Junior Subordinated Debentures for general corporate purposes, which may include the repayment
of indebtedness, investments in or extensions of credit to its subsidiaries and the financing of possible
acquisitions. Although the Company from time to time evaluates potential acquisitions, it currently has nounderstandings, commitments or agreements with respect to any acquisitions. Pending such use, the net proceeds
may be temporarily invested in short-term obligations. The precise amounts and timing of the application ofproceeds will depend upon the funding requirements of the Company and its subsidiaries and the availability ofother funds. The Company may engage in other financings in the future.

RATIO OF EARNINGS TO FIXED CHARGESThe Company's consolidated ratios of earnings to fixed charges for each of the periods indicated are set
forth below (unaudited):
Nine Months
Ended
September 30,
1996(a)Earnings to Fixed Charges:
Excluding Interest on Deposits
Including Interest on Deposits

1.82

7.61
1.71

Year Ended
December 31,
1995

1994

5.48

3.94
1.59

(a) Restated to include the accounts of affiliated banks (New Jersey National, Meridian Bank—Pennsylvania, Delaware Trust Company,
Meridian Bank—New Jersey and United Counties) which were merged into the Company at various times since December 31, 1995.

For purposes of computing the ratios of earnings to fixed charges, earnings represent net income plus
applicable income taxes and fixed charges. Fixed charges, excluding interest on deposits, represent interest
expense (except interest on deposits), capitalized interest and the interest factor included in rents. Fixed charges,
including interest on deposits, represent all interest expense, capitalized interest and the interest factor included
in rents. There were no shares of preferred stock outstanding during any of the periods above indicated.

ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary of the Company and, accordingly,
the accounts of the Trust will be included in the consolidated financial statements of the Company. The Capital
Securities will be presented in the consolidated balance sheet of the Company as a separate line item directly
above stockholders' equity under the caption "Minority Interests—Preferred Stock Issued by Subsidiaries" or asimilar caption. The Company will record Distributions payable on the Capital Securities as minority interest
expense in its consolidated statement of income.

16

CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company and its subsidiaries as of
September 30, 1996, and as adjusted to give effect to the issuance of the guaranteed preferred beneficial interestsin the Company's Junior Subordinated Debentures, issued December 19, 1996, and the consummation of theoffering of the Capital Securities. Other than the adjustment described in the previous sentence, there has been
no material change in the capitalization of the Company since September 30, 1996.
September 30, 1996(a)ActualAs Adjusted(Dollars in thousands)

Long-term debt:
Direct obligations of Company (b)Obligations of Company subsidiaries
Total long-term debt

$ 622,475
1,000
623,475$ 622,475
1,000
623,475——

300,000
150,000—$ 450,000—
37,3082,603,464
3,448
527,374—
37,3082,603,464
3,448
527,374

Total shareholder's equity

3,171,594

3,171,594

Total capitalization$3,795,069$4,245,069

Minority Interests:
Preferred Stock Issued by Subsidiaries—issued December 19, 1996 (c)Preferred Stock Issued by Subsidiaries—the Capital Securities (d)Shareholder's equity:
Preferred stock
Common stock
Contributed capital
Net unrealized gain on investment securities available for sale
Retained earnings

Capital ratios (e):Tier 1 capital to risk-based assets
Total capital to risk-based assets
Leverage

8.04%
10.60
6.97

(a)
(b)
(c)
(d)

9.25%
11.81
7.95

Restated to include the accounts of New Jersey National which was merged into the Company on December 6, 1996.
Includes $355 million due CoreStates Capital Corporation, a subsidiary of the Holding Corporation.
Reflects the issuance of capital securities by CoreStates Capital I.
Reflects the Capital Securities. The Trust holds the Junior Subordinated Debentures as its sole asset. The Company owns all of theCommon Securities of the Trust.
(e) "As Adjusted" capital ratios assume, for the purpose of calculating pro forma risk weighted assets, that the $450 million proceedsfrom issuance of the previously issued capital securities and the Capital Securities offered hereby qualify as Tier 1 capital and areinvested in time balances due from banks,

17

SELECTED UNAUDITED FINANCIAL DATA OF THE COMPANY
The selected unaudited financial data for the Company presented in the accompanying tables have been
derived from the Call Reports for the nine months ended September 30, 1996 and 1995, and the years ended
December 31, 1995 and 1994 as filed with the OCC and restated to include in all periods presented the accounts
of affiliate banks including New Jersey National, Meridian Bank—Pennsylvania, Delaware Trust Company,
Meridian Bank New Jersey and United Counties Bank, which were all merged into the Company at various times
since December 31, 1995. The Call Reports are prepared in accordance with regulatory accounting principles,
which differ, in certain cases, from generally accepted accounting principles used to prepare consolidated
financial statements of the Holding Corporation. The financial data presented below is unaudited but, in theopinion of management, all material adjustments necessary for a fair presentation of the Company's results ofoperations for such periods have been made. All such adjustments were of a normal recurring nature. The results
for the nine months ended September 30, 1996, are not necessarily indicative of the results for the full year or
any other interim period.
Balance Sheet Data
September 30,
1996
1995

December 31,
1995

1994

(in thousands)

Total assets
Investment securities
Loans
Allowance for loan losses
Deposits
Long-term debt
Common stock
Surplus
Undivided profits$41,209,718

Total shareholder's equity

3,986,138
29,382,947
579,138
32,759,016
623,475$
37,3082,603,464
530,822$41,259,290
5,834,311
27,733,189
570,262
33,556,306
589,135$
37,3082,891,306
653,471$42,082,060
5,361,199
27,473,815
549,189
34,734,766
574,961$
37,3082,911,175
646,635$43,085,718
7,039,386
27,690,201
615,072
35,339,797
453,881$
37,3082,846,063
627,868$ 3,171,594$ 3,582,085$ 3,595,118$ 3,511,239

Income Statement Data
Twelve Months Ended
Nine Months Ended
December 31,
September 30,
1995
1996
1995
1994
(in thousands)

Interest income
Interest expense
Net interest income
Provision for loan losses
Non-interest income
Gains on investment securities
Non-financial expenses$2,054,829
732,963
1,321,866
593,597
2,901
1,187,197$2,232,075
863,259
1,368,816
62,566
577,092
9,810
1,334,482$2,956,664
1,134,271
1,822,393
73,868780,832
14,036
1,721,937$2,603,370
845,311
1,758,059
233,433
714,482
7,518
1,733,618

615,094
212,397558,670
184,923

821,456
273,689

513,008
161,212$ 402,697$ 373,747$ 547,767$ 351,796

116,073

Income before income taxes
Provision for income taxes
Net income

18THE TRUSTThe Trust is a statutory business trust created under the Delaware Business Trust Act, as amended (the"Trust Act"), pursuant to a declaration of trust, dated as of January 23, 1997 (as so amended and restated, the"Declaration"), among the Trustees (as defined below) and CoreStates Bank, N.A., as sponsor, and the filing ofa certificate of trust with the Secretary of State of the State of Delaware. The Company will acquire Common
Securities in an aggregate liquidation amount equal to at least 3% of the total capital of the Trust. The Trust will
use all the proceeds derived from the issuance of the Capital Securities and the Common Securities to purchase
the Junior Subordinated Debentures and, accordingly, the assets of the Trust will consist solely of the Junior
Subordinated Debentures. The Trust exists for the exclusive purpose of (i) issuing the Trust Securities
representing undivided beneficial ownership interests in the assets of the Trust, (ii) investing the gross proceedsof the Trust Securities in the Junior Subordinated Debentures, and (iii) engaging in only those other activities
necessary or incidental thereto. The Declaration does not limit the aggregate liquidation amount of Trust
Securities that may be issued thereunder, provided that prior to issuing any additional Trust Securities, theTrustees shall have received an opinion of counsel to the effect that the issuance of such Trust Securities will notaffect the Trust status as a grantor trust for United States federal income tax purposes.
Pursuant to the Declaration, there will initially be five trustees (the "Trustees") for the Trust. Three of theTrustees (the "Regular Trustees") will be individuals who are employees or officers of or who are affiliatedwith the Company. The fourth trustee will be a financial institution that is unaffiliated with the Company (the"Property Trustee"). The fifth trustee will be an entity that maintains its principal place of business in the Stateof Delaware (the "Delaware Trustee"). Initially, The Chase Manhattan Bank will act as Property Trustee, andits affiliate, The Chase Manhattan Bank Delaware, will act as Delaware Trustee until, in each case, removed or
replaced by the holder of the Common Securities. The Chase Manhattan Bank will also act as trustee under the
Guarantee (the "Guarantee Trustee") and trustee under the Indenture (the "Indenture Trustee").
The Property Trustee will hold title to the Junior Subordinated Debentures for the benefit of the holders of
the Trust Securities, and the Property Trustee will have the power to exercise all rights, powers and privileges
with respect to the Junior Subordinated Debentures under the Indenture pursuant to which the Junior
Subordinated Debentures are issued, as the holder of such Junior Subordinated Debentures. In addition, theProperty Trustee will maintain exclusive control of a segregated non-interest bearing bank account (the"Property Account") to hold all payments made in respect of the Junior Subordinated Debentures for the benefitof the holders of the Trust Securities. The Guarantee Trustee will hold the Guarantee for the benefit of the holdersof the Capital Securities. The Company, as the holder of all the Common Securities, will have the right toappoint, remove or replace any of the Trustees and to increase or decrease the number of Trustees, provided
there shall always be a Delaware Trustee, a Property Trustee and a Regular Trustee.
The Company will pay all fees and expenses related to the organization and operations of the Trust(including any taxes, duties, assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other domestic taxing authority upon the Trust) and the offering of
the Capital Securities and be responsible for all debts and obligations of the Trust (other than with respect to theCapital Securities).
For so long as the Capital Securities remain outstanding, the Company will covenant (i) to maintain directly
or indirectly 100% ownership of the Common Securities, (ii) to cause the Trust to remain a statutory businesstrust and not to voluntarily dissolve, wind-up, liquidate or be terminated, except as permitted by the Declaration,(iii) to use its commercially reasonable efforts to ensure that the Trust will not be an "investment company" forpurposes of the Investment Company Act of 1940, as amended, and (iv) to take no action that would bereasonably likely to cause the Trust to be classified as an association or a publicly traded partnership taxable as acorporation for United States federal income tax purposes.
The Declaration and the Guarantee incorporate by reference the terms of the Trust Indenture Act. The rightsof the holders of the Capital Securities, including economic rights, rights to information and voting rights, areset forth in the Declaration and the Trust Indenture Act. See "Description of Capital Securities."
The location of the principal executive office of the Trust is Centre Square, West Tower, 1500 Market
Street, Philadelphia, PA 19101.
19

DESCRIPTION OF CAPITAL SECURITIES
Pursuant to the terms of the Declaration, the Regular Trustees on behalf of the Trust will issue the Capital
Securities and the Common Securities. The Capital Securities will represent undivided beneficial ownershipinterests in the assets of the Trust and the holders thereof will be entitled to a preference in certain circumstanceswith respect to Distributions and amounts payable on redemption or liquidation over the Common Securities, aswell as other benefits as described in the Declaration. This summary of certain provisions of the Capital
Securities and the Declaration does not purport to be complete and is subject to, and is qualified in its entirety byreference to, all the provisions of the Declaration, including the definitions therein of certain terms, and the Trust
Indenture Act. Wherever particular defined terms of the Declaration (as supplemented or amended from time totime) are referred to herein, the definitions of such defined terms are incorporated herein by reference.
GeneralThe Capital Securities will rank pari passu, and payments will be made thereon pro rata, with the Common
Securities except as described under "—Subordination of Common Securities." Legal title to the Junior
Subordinated Debentures will be held by the Property Trustee in trust for the benefit of the holders of the Capital
Securities and the Common Securities. The Guarantee executed by the Company for the benefit of the holders of
the Capital Securities will be a guarantee on a subordinated basis with respect to the Capital Securities but will
not guarantee payment of Distributions or amounts payable on redemption or liquidation of the Capital Securities
when the Trust does not have sufficient funds available to make such payments. See "Description of Guarantee."
The Company's obligations under the Guarantee, taken together with its obligations under the Junior
Subordinated Debentures and the Indenture, including its obligation to pay all costs, expenses and liabilities of
the Trust (other than with respect to the Capital Securities), constitute a full and unconditional guarantee of allof the Trust's obligations under the Capital Securities. The Capital Securities are neither obligations of nor
guaranteed by the Holding Corporation or any of its affiliates other than the Company and the Trust. The
denomination of the Capital Securities is the liquidation amount. Any institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act who is a purchaser must buy in minimum
principal amounts of $100,000,000.
Holders of the Capital Securities have no preemptive or similar rights.
Distributions
Distributions on each Capital Security will be payable in U.S. dollars at a variable annual rate equal to
LIBOR plus .65% (which is the same rate payable on the Junior Subordinated Debentures) on the liquidation
amount of $1,000, payable quarterly in arrears on the 15th day of January, April, July and October of each year.
See "Description of Junior Subordinated Debentures—Interest." Distributions will accumulate from the date oforiginal issuance and commence on April 15, 1997. The amount of Distributions payable for any period will becomputed on the basis of the actual number of days elapsed in a year of twelve 30-day months.
Distributions on the Capital Securities must be paid on the dates payable to the extent that the Trust has
funds available for the payment of such Distributions. The revenue of the Trust available for distribution toholders of its Capital Securities will be limited to payments under the Junior Subordinated Debentures in which
the Trust will invest the proceeds from the issuance and sale of the Capital Securities and the Common Securities.
See "Description of Junior Subordinated Debentures." If the Company does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not have funds available to pay Distributions on the
Capital Securities.
The Company will have the right under the Indenture to defer the payment of interest on the Junior
Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive quarters(each, an "Extension Period"), provided that no Extension Period may extend beyond the Stated Maturity of the
Junior Subordinated Debentures. Accordingly, there could be multiple Extension Periods of varying lengths
throughout the term of the Junior Subordinated Debentures. As a consequence of any such extension, quarterly
Distributions on the Capital Securities will be deferred by the Trust during any such Extension Period.
Distributions to which holders of the Capital Securities are entitled will accumulate and compound quarterly at a
variable annual rate equal to LIBOR plus .65% from the relevant payment date for such Distributions. The term
20

"Distributions" as used herein shall include any such compounded amounts unless the context otherwise
requires. During any such Extension Period, the Company may not, and may not permit any subsidiary of theCompany to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make aliquidation payment with respect to, any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank paripassu with or junior to the Junior Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company if such guarantee ranks paripassu with or junior in interest to the Junior Subordinated Debentures (other than (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors
or consultants, or in connection with a dividend reinvestment or stockholder stock purchase plan, (b) as a resultof an exchange or conversion of any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of theCompany's indebtedness for any class or series of the Company's capital stock, (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of suchcapital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection withany stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants,
options or other rights is the same stock as that on which the dividend is being paid (or ranks pari passu with or
junior to such stock)). Prior to the termination of any such Extension Period, the Company may further extend
the Extension Period, provided that no Extension Period may exceed 20 consecutive quarters or extend beyond
the Stated Maturity of the Junior Subordinated Debentures. Upon the termination of any such Extension Period
and the payment of all amounts then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period subject to the foregoing requirements. See "Description of Junior Subordinated Debentures—
Option to Extend Interest Payment Period." The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period of the Junior Subordinated Debentures.
The Property Trustee will cause the rate of Distributions, amount of Distributions, the payment dates foreach Distribution and the Extension Period, if any, to be provided to the Luxembourg Stock Exchange andpublished in a daily newspaper in Luxembourg (which is expected to be the Luxemburger Wort) as soon as
possible after the determination thereof.
In the event that any date on which Distributions are payable on the Capital Securities is not a Business
Day, then payment of the Distributions payable on such date will be made on the next succeeding day that is a
Business Day (and without any additional Distributions or other payment in respect of any such delay), with thesame force and effect as if made on the date such payment was originally payable (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution Date"). A "Business Day" shallmean any day other than a Saturday or a Sunday, or a day on which banking institutions in The City of New
York or the City of Philadelphia are authorized or required by law or executive order to remain closed or a dayon which the corporate trust office of the Property Trustee or the Indenture Trustee (as defined herein) is closed
for business.
Distributions on the Capital Securities (other than distributions on a Redemption Date (as defined herein))will be payable to the holders thereof as they appear on the register of the Trust on the relevant record dates,
which shall be the first day of the month of the relevant Distribution Date. Distributions payable on any Capital
Securities that are not punctually paid on any Distribution Date will cease to be payable to the person in whosename such Capital Securities are registered on the relevant record date, and such defaulted Distribution will
instead be payable to the person in whose name such Capital Securities are registered on the special record dateor other specified date determined in accordance with the Declaration.
Holders of interests in the Regulation S Temporary Global Capital Security shall only receive any
Distributions, Redemption Price or any other payment due on such Regulation S Temporary Global Capital
Security upon certification of non-U.S. beneficial ownership to the Property Trustee. See "Book-Entry Issuance—Payments; Certification by Holders of the Regulation S Temporary Global Capital Security."21

Redemption
Mandatory Redemption. Unless a Special Event has occurred, the Capital Securities will not be
redeemable prior to January 15, 2007. The Capital Securities will mature at their liquidation amount, unlessredeemed prior thereto, on January 15, 2027. Upon the repayment or redemption, in whole or in part, of the
Junior Subordinated Debentures, whether at Stated Maturity or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be applied by the Property Trustee to redeem
Capital Securities and Common Securities upon not less than 30 nor more than 60 days' notice prior to the datefixed for repayment or redemption. If less than all of the Junior Subordinated Debentures are to be repaid orredeemed on a Redemption Date, then the proceeds from such repayment or redemption shall be allocated to theredemption pro rata of the Capital Securities and the Common Securities.
Special Event Redemption or Distribution of Junior Subordinated Debentures. If a Special Event shalloccur and be continuing, the Company will have the right, subject to the receipt of any necessary prior approvalof the OCC, to either (i) redeem within 90 days following the occurrence of such Special Event the Junior
Subordinated Debentures on the date of redemption (the "Redemption Date") in whole (but not in part) andthereby cause a mandatory redemption of the Capital Securities in whole (but not in part) at a redemption pricewith respect to the Capital Securities equal to the redemption price in respect of the Junior SubordinatedDebentures or (ii) to dissolve the Trust and, after satisfaction of the claims of creditors of the Trust as provided
by applicable law, cause the Junior Subordinated Debentures to be distributed to the holders of the Capital
Securities in liquidation of the Trust. Under current United States federal income tax law and interpretations
thereof and assuming, as expected, the Trust is treated as a grantor trust, a distribution of the Junior SubordinatedDebentures should not be a taxable event to holders of the Capital Securities. Should there be a change in law, achange in legal interpretation, certain Tax Events or other circumstances, however, the distribution could be ataxable event to holders of the Capital Securities. See "Certain United States Federal Income Tax Consequences—Distribution of Junior Subordinated Debentures or Cash upon Liquidation of the Trust."
If the Company does not elect either option described above, the Capital Securities will remain outstanding
until the repayment of the Junior Subordinated Debentures, whether at Stated Maturity or their earlier
redemption, and in the event a Tax Event has occurred and is continuing, the Company will be obligated to pay
any additional taxes, duties, assessments and other governmental charges (other than withholding taxes) to which
the Trust has become subject as a result of a Tax Event.
A "Special Event" means a Tax Event, a Regulatory Capital Event or an Investment Company Event. A"Tax Event" means the receipt by the Company of an opinion of counsel, rendered by a law firm having arecognized national tax practice, to the effect that, as a result of any amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official or administrative pronouncement or action or
judicial decision interpreting or applying such laws or regulations, which amendment or change is adopted or
which proposed change, pronouncement or action or decision is announced or which action is taken on or after
the date of original issuance of the Capital Securities, there is more than an insubstantial risk that (i) the Trust is,or will be within 90 days of the date of such opinion, subject to United States federal income tax with respect toincome received or accrued on the Junior Subordinated Debentures, (ii) interest payable by the Company on such
Junior Subordinated Debentures is not, or within 90 days of the date of such opinion, will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes, or (iii) the Trust is, or will bewithin 90 days of the date of such opinion, subject to more than a de minimis amount of other taxes, duties orother governmental charges. A "Regulatory Capital Event" means that the Company shall have received an
opinion of independent bank regulatory counsel experienced in such matters to the effect that, as a result of (a)any amendment to or change (including any announced prospective change) in the laws (or any regulations
thereunder) of the United States or any rules, guidelines or policies of the OCC or the Board of Governors of theFederal Reserve System (the "Federal Reserve") or (b) any official or administrative pronouncement or action
or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective orsuch pronouncement or action or decision is announced on or after the date of original issuance of the Capital
Securities, the Capital Securities do not constitute, or within 90 days of the date thereof, will not constitute (x)either Tier 1 capital (or its then equivalent) or Tier 2 capital (or its then equivalent), in the case of the Company,22

or (y) Tier 1 capital in the case of the Holding Corporation; provided, however, that the distribution of the Junior
Subordinated Debentures in connection with the liquidation of the Trust by the Company shall not in and of
itself constitute a Regulatory Capital Event unless such liquidation shall have occurred in connection with a Tax
Event or an Investment Company Event. "Investment Company Event" means the receipt by the Trust of an
opinion of counsel, rendered by a law firm having a recognized national securities practice, to the effect that, asa result of the occurrence of a change in law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), the Trust is or will be considered an "investment company" that is required to be registered under theInvestment Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective on or after
the date of original issuance of the Capital Securities.
Redemption Procedures
Capital Securities redeemed on each Redemption Date shall be redeemed at the redemption price received
by the Trust in respect of the Junior Subordinated Debentures (the "Redemption Price") with the applicable
proceeds from the contemporaneous redemption or payment at Stated Maturity of the Junior SubordinatedDebentures. Redemptions of the Capital Securities shall be made and the Redemption Price shall be payable oneach Redemption Date only to the extent that the Trust has sufficient funds available for the payment of such
Redemption Price. See also "—Subordination of Common Securities." Holders of interests in the Regulation S
Temporary Global Capital Security shall only receive any Distributions, Redemption Price or any other payments
due on such Regulation S Temporary Global Capital Security upon certification of non-U.S. beneficial
ownership. See "Book-Entry Issuance—Payments; Certifications by Holders of the Regulation S Temporary
Global Capital Security."
Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption
Date to each holder of Capital Securities to be redeemed at its registered address. If the Trust gives a notice ofredemption in respect of the Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, the Property Trustee will deposit irrevocably with DTC or its nominee
funds sufficient to pay the applicable Redemption Price for all securities held in DTC and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the holders of the Capital Securities held
through DTC. See "Book-Entry Issuance." If any Capital Securities are held in certificated form, the Trust, tothe extent funds are available, will irrevocably deposit with the paying agent for such Capital Securities funds
sufficient to pay the applicable Redemption Price and will give the paying agent irrevocable instructions andauthority to pay the Redemption Price to the holders thereof upon surrender of their certificates evidencing theCapital Securities. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for
any Capital Security called for redemption shall be payable to the holders of such Capital Security on the relevant
record dates for the related Distribution Dates. If notice of redemption shall have been given and funds depositedas required, then upon the date of such deposit, all rights of the holders of such Capital Securities so called forredemption will cease, except the right of the holders of such Capital Securities to receive the Redemption Price,
but without interest on such Redemption Price, and such Capital Securities will cease to be outstanding. In theevent that any date fixed for redemption of Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day which is a Business Day (andwithout any interest or other payment in respect of any such delay), except that, if such Business Day falls in thenext calendar year, such payment will be made on the immediately preceding Business Day, in each case withthe same force and effect as if made on the date such payment was originally payable. In the event that paymentof the Redemption Price in respect of Capital Securities called for redemption is improperly withheld or refusedand not paid either by the Trust or by the Company pursuant to the Guarantee as described under "Descriptionof Guarantee", Distributions on such Capital Securities will continue to accrue at the then applicable rate, fromthe Redemption Date originally established by the Trust for the Capital Securities to the date such Redemption
Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposesof calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States federal securities law) and to theprovisions of the Declaration, the Company or its subsidiaries may at any time and from time to time purchaseoutstanding Capital Securities by tender, in the open market or by private agreement.
23

The Trust may not redeem fewer man all of the outstanding Capital Securities unless all accrued and unpaid
Distributions have been paid on all Capital Securities for all quarterly distribution periods terminating on or prior
to the date of redemption. If less than all of the Capital Securities and Common Securities issued by the Trust
are to be redeemed on a Redemption Date, then the aggregate amount of such Capital Securities and Common
Securities to be redeemed shall be allocated pro rata among the Capital Securities and the Common Securities. If
the Capital Securities are in book-entry form, they will be redeemed as described below under "Book-Entry
Issuance." If not, the particular Capital Securities to be redeemed shall be selected on a pro rata basis not morethan 60 days prior to the Redemption Date by the Property Trustee from the outstanding Capital Securities notpreviously called for redemption, by such method as the Property Trustee shall deem fair and appropriate andwhich may provide for the selection for redemption of portions (equal to $1,000 or an integral multiple of $1,000
in excess thereof) of the liquidation amount of Capital Securities of a denomination larger than $1,000. The
Property Trustee shall promptly notify the Trust registrar in writing of the Capital Securities selected forredemption and, in the case of any Capital Security selected for partial redemption, the liquidation amountthereof to be redeemed. For all purposes of the Declaration, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of any Capital Security redeemed or to beredeemed only in part, to the portion of the aggregate liquidation amount of Capital Securities which has been or
is to be redeemed.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Capital Securities and the Common
Securities, as applicable, shall be made pro rata based on the liquidation amount of such Capital Securities andCommon Securities; provided, however, that if on any Distribution Date or Redemption Date an Indenture Eventof Default shall have occurred and be continuing, no payment of any Distribution on, or Redemption Price of,any of the Common Securities, and no other payment on account of the redemption, liquidation or otheracquisition of such Common Securities, shall be made unless payment in full in cash of all accumulated andunpaid Distributions on all of the outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price, the full amount of such Redemption Price on
all of the outstanding Capital Securities then called for redemption, shall have been made or provided for, andall funds available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions
on, or Redemption Price of, the Capital Securities then due and payable.
Liquidation Distribution Upon Dissolution
Pursuant to the Declaration, the Trust shall automatically dissolve upon expiration of its term and shalldissolve on the first to occur of: (i) any liquidation, insolvency or similar proceeding with respect to the Company
or all or substantially all of its property, (ii) the distribution of the Junior Subordinated Debentures to the holdersof the Capital Securities and Common Securities; (iii) the repayment of all of the Capital Securities in connection
with the maturity or redemption of all of the Junior Subordinated Debentures; and (iv) the entry by a court ofcompetent jurisdiction of an order for the dissolution of the Trust. Notice of such liquidation shall be given to
the holders of the Common Securities and Capital Securities by the Trustees within 30 days of such event.
If an early dissolution occurs as described in clause (i), (ii) or (iv) above, the Trust shall be liquidated by
the Trustees as expeditiously as the Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the holders of the Capital Securities andCommon Securities their pro rata interest in the Junior Subordinated Debentures, unless such distribution isdetermined by the Property Trustee not to be practicable, in which event such holders will be entitled to receiveout of the assets of the Trust available for distribution to holders, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, an amount equal to, in the case of holders of Capital Securities, theaggregate of the liquidation amount plus accrued and unpaid Distributions thereon to the date of payment (suchamount being the "Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Capital Securities shall be paid on a pro rata basis. The holder(s) of theCommon Securities will be entitled to receive distributions upon any such liquidation pro rata with the holdersof the Capital Securities, except that if an Indenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities.
24Upon any liquidation in which the Junior Subordinated Debentures are distributed, if at any time of suchliquidation the Capital Securities are (i) rated by at least one nationally recognized statistical rating organization,(ii) listed on the Luxembourg Stock Exchange or (iii) eligible for quotation in PORTAL, the Company shall use
its best efforts to (a) obtain from at least one nationally recognized statistical rating organization, a rating for the
Junior Subordinated Debentures, (b) list the Junior Subordinated Debentures on the Luxembourg Stock Exchangeor (c) qualify the Junior Subordinated Debentures for quotation in PORTAL, as the case may be.
The OCC's risk-based capital guidelines currently provide that a national bank's capital instruments may beredeemed prior to maturity only with the prior approval of the OCC, and that the OCC typically will consider
requests for the redemption of capital instruments when the instruments are to be redeemed with the proceeds of,or are replaced by a like amount, of a similar or higher quality capital instrument. In the event the Company, as
the holder of all of the Common Securities, terminates the Trust prior to the stated maturity of the Capital
Securities and the termination of the Trust is deemed to constitute the redemption of capital instruments by the
OCC under its risk-based capital guidelines or policies, the termination of the Trust by the Company would be
subject to the prior approval of the OCC under its capital guidelines and policies as currently in effect.
After the liquidation date is fixed for any distribution of Junior Subordinated Debentures to holders of theCapital Securities (i) the Capital Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as a record holder of Capital Securities, will receive a registered global certificate or certificates representing the
Junior Subordinated Debentures to be delivered to it upon such distribution and (iii) any certificates representing
Capital Securities held in certificated form will be deemed to represent Junior Subordinated Debentures having a
principal amount equal to the liquidation amount of such Capital Securities, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on such Capital Securities until suchcertificates are presented for cancellation whereupon the Company will issue to such holder, and the Indenture
Trustee will authenticate, a certificate representing such Junior Subordinated Debentures.
Trust Enforcement Events
An Indenture Event of Default constitutes a Trust Enforcement Event under the Declaration with respect to
the Trust Securities, provided that pursuant to the Declaration, the holder of the Common Securities will bedeemed to have waived any Trust Enforcement Event with respect to the Common Securities until all Trust
Enforcement Events with respect to the Capital Securities have been cured, waived or otherwise eliminated. Until
such Trust Enforcement Event with respect to the Capital Securities has been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf of the holders of the Capital
Securities and only the holders of the Capital Securities will have the right to direct the Property Trustee withrespect to certain matters under the Declaration, and therefore the Indenture.
Upon the occurrence of a Trust Enforcement Event, the Indenture Trustee or the Property Trustee as theholder of the Junior Subordinated Debentures will have the right under the Indenture to declare the principal of
and interest on the Junior Subordinated Debentures to be immediately due and payable. Each of the Company
and the Trust is required to file annually with the Property Trustee an officer's certificate as to its compliancewith all conditions and covenants under the Declaration.
If the Property Trustee fails to enforce its rights with respect to the Junior Subordinated Debentures held by
the Trust, any record holder of Capital Securities may, to the fullest extent permitted by law, institute legal
proceedings directly against the Company to enforce the Property Trustee's rights under such Junior
Subordinated Debentures without first instituting any legal proceedings against such Property Trustee or any
other person or entity. In addition, if a Trust Enforcement Event has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest, principal or other required payments on the Junior
Subordinated Debentures issued to the Trust on the date such interest, principal or other payment is otherwise
payable, then a record holder of Capital Securities may, on or after the respective due dates specified in the Junior
Subordinated Debentures, institute a proceeding directly against the Company under the Indenture for
enforcement of payment on Junior Subordinated Debentures having a principal amount equal to the aggregateliquidation amount of the Capital Securities held by such holder. In connection with such Direct Action, theCompany will be subrogated to the rights of such record holder of Capital Securities to the extent of any payment
made by the Company to such record holder of Capital Securities.
25

Voting Rights; Amendment of the Declaration
Except as provided below and under "Description of Guarantee—Amendments and Assignment" and asotherwise required by law and the Declaration, the holders of the Capital Securities will have no voting rights.
The Regular Trustees are required to call a meeting of the holders of the Capital Securities if directed to do so
by holders of at least 10% in aggregate liquidation amount thereof.
So long as any Junior Subordinated Debentures are held by the Property Trustee, the Trustees shall not (i)direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee
or executing any trust or power conferred on the Property Trustee with respect to such Junior SubordinatedDebentures, (ii) waive any past default that is waivable under the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Junior Subordinated Debentures shall be due and payable, or (iv)consent to any amendment, modification or termination of the Indenture or such Junior Subordinated Debentures,
where such consent shall be required, without, in each case, obtaining the prior approval of the holders of amajority in aggregate liquidation amount of all outstanding Capital Securities; provided, however, that where aconsent under the Indenture would require the consent of each holder of Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the prior consent of each holder ofCapital Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of theholders of the Capital Securities except pursuant to a subsequent vote of the holders of the Capital Securities.
The Property Trustee shall notify each holder of record of the Capital Securities of any notice of default which it
receives with respect to the Junior Subordinated Debentures. In addition to obtaining the foregoing approvals of
the holders of the Capital Securities, prior to taking any of the foregoing actions, the Trustees shall receive an
opinion of counsel experienced in such matters to the effect that the Trust will not be classified as other than agrantor trust for United States federal income tax purposes on account of such action.
The Declaration may be amended from time to time by the holders of a majority of the Common Securities
and the Regular Trustee (and in certain circumstances the Property Trustee and the Delaware Trustee), without
the consent of the holders of the Capital Securities, (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other provision, or to make any other provisions
with respect to matters or questions arising under the Declaration that shall not be inconsistent with the otherprovisions of the Declaration or (ii) to modify, eliminate or add to any provisions of the Declaration to suchextent as shall be necessary to ensure that the Trust will be classified as a grantor trust for United States federal
income tax purposes at all times that any Capital Securities and Common Securities are outstanding or to ensurethat the Trust will not be required to register as an "investment company" under the Investment Company Act
or (iii) to conform to any change in Rule 3a-7 under the Investment Company Act or written change ininterpretation or application of such Rule 3a-7 by any legislative body, court, government agency or regulatory
authority which amendment does not have a material adverse effect on the rights, preferences or privileges ofthe Holders; provided, however, that such action shall not adversely affect in any material respect the interests ofany holder of Capital Securities or Common Securities, and any amendments of the Declaration shall become
effective when notice thereof is given to the holders of Capital Securities and Common Securities. The
Declaration may also be amended by the holders of a majority in aggregate liquidation amount of the Common
Securities and the Regular Trustee with (i) the consent of holders representing not less than a majority (based
upon liquidation amounts) of the outstanding Capital Securities and (ii) receipt by the Regular Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any power granted to the Regular
Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United Statesfederal income tax purposes or the Trust's exemption from status as an "investment company" under theInvestment Company Act, provided, that without the consent of each holder of Capital Securities and Common
Securities affected thereby, the Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Capital Securities and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Capital Securities and Common Securities as of a specified
date or (ii) restrict the right of a holder of Capital Securities or Common Securities to institute suit for theenforcement of any such payment on or after such date.
26

Any required approval of holders of Capital Securities may be given at a meeting of holders of Capital
Securities convened for such purpose or pursuant to written consent. The Regular Trustees will cause a notice ofany meeting at which holders of Capital Securities are entitled to vote, or of any matter upon which action by
written consent of such holders is to be taken, to be given to each holder of record of Capital Securities in themanner set forth in the Declaration.
No vote or consent of the holders of Capital Securities will be required for the Trust to redeem and cancel
its Capital Securities in accordance with the Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote or consent under any of thecircumstances described above, any of the Capital Securities that are owned by the Company, the Trustees or
any affiliate of the Company or any Trustees, shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
Expenses and Taxes
In the Indenture, the Company, as borrower, has agreed to pay all debts and other obligations (other thanwith respect to the Capital Securities) and all costs and expenses of the Trust (including costs and expenses
relating to the organization of the Trust, the fees and expenses of the Trustees and the costs and expenses relating
to the operation of the Trust) and to pay any and all taxes and all costs and expenses with respect thereto (otherthan United States withholding taxes) to which the Trust might become subject. The Company has also agreed
in the Indenture to execute such additional agreements as may be necessary or desirable to give full effect to theforegoing.
Notices
All notices to holders of Capital Securities shall be validly given if in writing and mailed by first class mailto them at their respective addresses in the register of holders of Capital Securities maintained by the registrar of
the Trust and so long as the Capital Securities are listed on the Luxembourg Stock Exchange and the
Luxembourg Stock Exchange and the rules of such Exchange so require, by publication, in a leading newspaper
having general circulation in Luxembourg (which is expected to be the Luxemburger Wort). Any such notice
shall be deemed to have been given on the later of the date of such publication and the seventh day after being
so mailed.
Registrar and Transfer Agent
The Chase Manhattan Bank will act as the initial registrar and The Chase Manhattan Bank and Chase
Manhattan Bank Luxembourg S.A. will act as transfer agent for the Capital Securities. The Company and theTrust shall at all times maintain in the City of New York and, so long as the Capital Securities are listed on the
Luxembourg Stock Exchange and the Luxembourg Stock Exchange and the rules of the Luxembourg Stock
Exchange so require, a transfer agent in Luxembourg. Definitive Capital Securities may be presented to the
Luxembourg transfer agent for transfer.
Registration of transfers of Capital Securities will be effected without charge by or on behalf of the Trust,
but the Trust may require payment of any tax or other governmental charges that may be imposed in connection
with any transfer or exchange. The Trust will not be required (i) to register or cause to be registered the transfer
or exchange of the Capital Securities during a period beginning at the opening of business 15 days before theday of the mailing of the relevant notice of redemption and ending at the close of business on the day of mailingof such notice of redemption or (ii) to register or cause to be registered the transfer or exchange of any Capital
Securities so selected for redemption, except in the case of any Capital Securities being redeemed in part, any
portion thereof not to be redeemed.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of a Trust Enforcement Event,undertakes to perform only such duties as are specifically set forth in the Declaration and, after such Trust
Enforcement Event, must exercise the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any holder of Capital Securities unless
it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred thereby. If no
Trust Enforcement Event has occurred and is continuing and the Property Trustee is required to decide between
27alternative causes of action, construe ambiguous provisions in the Declaration or is unsure of the application of
any provision of the Declaration, and the matter is not one on which holders of Capital Securities are entitledunder the Declaration to vote, then the Property Trustee may, but shall be under no duty to, take such action as
is directed by the Company and, if not so directed, shall take such action as it deems advisable and in the bestinterests of the holders of the Capital Securities and the Common Securities and will have no liability except for
its own bad faith, negligence or willful misconduct.
The Company and certain of its affiliates conduct banking and other transactions with the Property Trustee
and its affiliates in the ordinary course of their business.
Payment and Paying Agency
Payments in respect of the Global Capital Securities (as defined herein) shall be made to DTC, which shallcredit the relevant accounts at DTC on the applicable Distribution Dates or, if the Capital Securities are held incertificated form, such payments shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the register maintained by the registrar. The paying agent (the "Paying Agent")shall initially be the Property Trustee and any co-paying agent chosen by the Property Trustee and acceptable to
the Regular Trustees and the Company. Initially, Chase Manhattan Bank Luxembourg S.A. will act as co-paying
agent. The Company and the Trust shall at all times and so long as the Capital Securities are listed on the
Luxembourg Stock Exchange, and the Luxembourg Stock Exchange so requires, maintain a paying agent in
Luxembourg. The Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to theProperty Trustee and the Company. In the event that the Property Trustee shall no longer be the Paying Agent,
the Regular Trustees shall appoint a successor (which shall be a bank or trust company acceptable to the Regular
Trustees and the Company) to act as Paying Agent.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer orlease its properties and assets substantially as an entirety to any entity, except as described below or as otherwise
described in the Declaration. The Trust may, at the request of the Company with the consent of the holders of atleast a majority in aggregate liquidation amount of the Capital Securities, merge with or into, consolidate,amalgamate, be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to atrust organized as such under the laws of any State; provided that (i) such successor entity (if not the Trust)either (a) expressly assumes all of the obligations of the Trust with respect to the Capital Securities or (b)substitutes for the Capital Securities other securities having substantially the same terms as the Capital Securities(the "Successor Securities") so long as the Successor Securities rank the same as the Capital Securities rank inpriority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) if the Trust
is not the successor entity, the Property Trustee expressly appoints a trustee of such successor entity possessing
the same powers and duties as the Property Trustee as the holder of the Junior Subordinated Debentures, (iii)such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical ratingorganization, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does notadversely affect the rights, preferences and privileges of the holders of the Capital Securities (including any
Successor Securities) in any material respect, (v) such successor entity has a purpose substantially identical tothat of the Trust, (vi) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer, orlease, the Company has received an opinion from independent counsel to the Trust experienced in such mattersto the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of the Capital Securities (including any
Successor Securities) in any material respect and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, (1) neither the Trust nor such successor entity will be required toregister as an investment company under the Investment Company Act and (2) the Trust or the successor entity
will continue to be classified as a grantor trust for United States federal income tax purposes, (vii) the Company
or any permitted successor or assignee owns all of the Common Securities of such successor entity and28

guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided
by the Guarantee, and (viii) such successor entity (if not the Trust) expressly assumes all of the obligations of
the Trust with respect to the Trustees. Notwithstanding the foregoing, the Trust shall not, except with the consent
of holders of 100% in aggregate liquidation amount of the Capital Securities, consolidate, amalgamate, merge
with or into, be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to
any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if suchconsolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as other than a grantor trust for United States federal income tax purposes.
Merger or Consolidation of Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or any Regular Trustee may be
merged or converted or with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Trustee, shall be the successor of such Trustee under the
Declaration, provided such corporation shall be otherwise qualified and eligible.
Governing Law
The Declaration and the Capital Securities will be governed by, and construed in accordance with, the lawsof the State of Delaware, without regard to principles of conflict of laws.
Miscellaneous
1. The Capital Securities represented by a Regulation S temporary global or permanent global security havebeen accepted for clearance through the CEDEL and Euroclear systems with a Common Code of 7281722. The
CUSIP Number for the Capital Securities represented by the Restricted Global Capital Securities is 218694AA5,
the CUSIP Number for the Regulation S Global Capital Securities is U20660AA1 and the CUSIP Number for
the Other Capital Securities represented by registered, certificated securities is 218694AB3. The International
Securities Identification Number ("ISIN") for the Capital Securities represented by the Regulation S temporary
global or permanent global security is USU 20660AA18.
2. Application has been made to list the Capital Securities on the Luxembourg Stock Exchange. The legal
notice relating to the issue of the Capital Securities and the Articles of Incorporation of the Company will be
registered prior to the listing with the Registrar of the District Court in Luxembourg (Greffier en Chef duTribunal d'Arrondissement de et a Luxembourg), where such documents are available for inspection and where
copies thereof can be obtained upon request. As long as the Capital Securities are listed on the Luxembourg
Stock Exchange, the Company will maintain a paying agent and a transfer agent in Luxembourg.
3. Each of the Company and the Trust has obtained all necessary contents, approvals and authorizations inconnection with the issue and performance of the Capital Securities, except as disclosed in this Offering
Memorandum.
4. Except as disclosed in this Offering Memorandum, there has been no material adverse change in thefinancial position or prospects of the Company or any of its subsidiaries since September 30, 1996.
5. Other than as referred to elsewhere in this Offering Memorandum, neither the Company nor any of its
subsidiaries is involved in any litigation or arbitration proceedings that may have, or have had during the 12months preceding the date of this document, a significant effect on the financial position of the Company or anyof its subsidiaries, nor is the Company or any of its subsidiaries aware that any such proceedings are pending or
threatened.
29

6. A copy of the Articles of Association of the Company and copies of the Indenture, the Declaration, theGuarantee and the Purchase Agreement (or, pending execution thereof, drafts thereof subject to modification)
will, for so long as the Capital Securities are listed on the Luxembourg Stock Exchange, be available forinspection during usual business hours on any weekday (except public holidays) at the offices of the transfer
agent in Luxembourg. As long as any Capital Securities remain outstanding, copies of the latest Call Report of
the Company, as at December 31 in each year and the quarterly Call Reports as at March 31, June 30 and
September 30 in each year may be obtained (free of charge) at the offices of the Company specified above and at
the specified offices of the paying agents. Other than Call Reports, the Company does not publish interim orother financial statements.
7. Approval for the issuance of the Capital Securities was granted by the Executive Committee of theCompany on December 11, 1996.
8. The Capital Securities will initially be offered to investors at 97.988% of the liquidation amount per
Capital Security.
9. The Company has taken all reasonable care to insure that the information contained in this Offering
Memorandum in relation to the Company and the Capital Securities is true and accurate in all material respects
and that in relation to the Company and the Capital Securities, there are no material facts the omission of which
would make misleading any statement herein, whether fact of opinion. The Company accepts responsibility forthe information contained in this Offering Memorandum.

30

DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURESThe Junior Subordinated Debentures are to be issued under an Indenture (the "Indenture") between the
Company and The Chase Manhattan Bank, as trustee (the "Indenture Trustee"). This summary of certain terms
and provisions of the Junior Subordinated Debentures and the Indenture does not purport to be complete and issubject to, and is qualified in its entirety by reference to, the Indenture.
GeneralConcurrently with the issuance of the Capital Securities, the Trust will invest the proceeds thereof and theconsideration paid by the Company for the Common Securities in the Junior Subordinated Debentures issued by
the Company. The Junior Subordinated Debentures will be issued in an aggregate principal amount equal to theaggregate liquidation amount of the Capital Securities and the Common Securities. It is anticipated that, until theliquidation, if any, of the Trust, each Junior Subordinated Debenture will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Capital Securities and the Common Securities. The Junior
Subordinated Debentures will bear interest at a variable annual rate equal to LIBOR plus .65% on the principal
amount thereof, payable quarterly in arrears on the 15th day of January, April, July and October of each year
(each, an "Interest Payment Date"), commencing April 15, 1997, to the person in whose name each Junior
Subordinated Debenture is registered, subject to certain exceptions, at the close of business on the first day ofthe month of the relevant Interest Payment Date. The amount of interest payable for any period will be computedon the basis of the actual number of days elapsed in a year of twelve 30-day months. In the event that any dateon which interest is payable on the Junior Subordinated Debentures is not a Business Day, then payment of theinterest payable on such date will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), with the same force and effect as if made on the datesuch payment was originally payable. Accrued interest that is not paid on the applicable Interest Payment Datewill bear additional interest on the amount thereof (to the extent permitted by law) at a variable annual rate equal
to LIBOR plus .65%, compounded quarterly. The term "interest" as used herein shall include quarterly interest
payments, interest on quarterly interest payments not paid on the applicable Interest Payment Date and any
Additional Interest, as applicable. Interest on the Junior Subordinated Debentures shall accrue from January 23,
1997.
The Junior Subordinated Debentures will mature on January 15, 2027.
The Junior Subordinated Debentures will be unsecured and will rank junior and be subordinate in right of
payment to all Indebtedness of the Company to the extent described herein. The Indenture does not limit theincurrence or issuance of other secured or unsecured debt of the Company, whether under the Indenture or any
existing or other indenture that the Company may enter into in the future or otherwise. See "—Subordination."
The federal banking agencies possess broad powers to take corrective action as deemed appropriate for an
insured depositary institution, including without limitation, under certain circumstances, the ability to prohibit
the payment of principal or interest on subordinated debt. See "Supervision, Regulation and Other Matters."
The Indenture does not limit the aggregate principal amount of Junior Subordinated Debentures that may be
issued thereunder.
The general provisions of the Indenture do not afford holders of the Junior Subordinated Debenturesprotection in the event of a highly leveraged or other transaction involving the Company that may adversely
affect holders of the Junior Subordinated Debentures.
Interest
The Chase Manhattan Bank, as Calculation Agent (the "Calculation Agent"), will calculate the interest rate
for each quarterly interest period based on LIBOR determined as of two London Business Days (defined as any
day, other than a Saturday or Sunday, on which banks are open for business in London) prior to the first day of31such interest period (each, a "Determination Date"). "LIBOR" means, with respect to a quarterly interest period
relating to an Interest Payment Date (in the following order of priority):(i) the rate (expressed as a percentage per annum) for Eurodollar deposits having a three-monthmaturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date;(ii) if such rate does not appear on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date, LIBOR will be the arithmetic mean (if necessary rounded upwards to the nearest whole
multiple of .00001%) of the rates (expressed as percentages per annum) for Eurodollar deposits having athree-month maturity that appear on Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") asof 11:00 a.m. (London time) on such Determination Date;(iii) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m. (London time) on the related
Determination Date, the Calculation Agent will request the principal London offices of four leading banks
in the London interbank market to provide such banks' offered quotations (expressed as percentages perannum) to prime banks in the London interbank market for Eurodollar deposits having a three-monthmaturity as of 11:00 a.m. (London time) on such Determination Date. If at least two quotations are provided,
LIBOR will be the arithmetic mean (if necessary rounded upwards to the nearest whole multiple of.00001%) of such quotations;(iv) if fewer than two such quotations are provided as requested in clause (iii) above, the Calculation
Agent will request four major New York City banks to provide such banks' offered quotations (expressedas percentages per annum) to leading European banks for loans in Eurodollars as of 11:00 a.m. (Londontime) on such Determination Date. If at least two such quotations are provided, LIBOR will be thearithmetic mean (if necessary rounded upwards to the nearest whole multiple of .00001%) of suchquotations; and(v) if fewer than two such quotations are provided as requested in clause (iv) above, LIBOR will be
LIBOR determined with respect to the interest period immediately preceding such current interest period.
If the rate for Eurodollar deposits having a three-month maturity that initially appears on Telerate Page 3750
or Reuters Page LIBO, as the case may be, as of 11:00 a.m. (London time) on the related Determination Date issuperseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a corrected rate before 12:00
noon (London time) on such Determination Date, the corrected rate as so substituted on the applicable page willbe the applicable LIBOR for such Determination Date.
Absent manifest error, the Calculation Agent's determination of LIBOR and its calculation of the applicableinterest rate for each interest period will be final and binding. Investors may obtain the interest rates for thecurrent and preceding interest period by writing or calling Corporate Trust Administration at the Calculation
Agent at The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001.
Option to Extend Interest Payment Period
So long as no Indenture Event of Default has occurred and is continuing, the Company has the right underthe Indenture to defer the payment of interest at any time or from time to time for a period not exceeding 20
consecutive quarters with respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures. At the end of such Extension Period, theCompany must pay all interest then accrued and unpaid (together with interest thereon at a variable annual rateequal to LIBOR plus .65%, compounded quarterly, to the extent permitted by applicable law). During an
Extension Period, interest will continue to accrue and holders of Junior Subordinated Debentures (or holders ofCapital Securities while the Capital Securities are outstanding) will be required to accrue interest income (asOID) for United States federal income tax purposes. See "Certain United States Federal Income Tax
Consequences—Interest Income and Original Issue Discount."
During any such Extension Period, the Company may not, and may not permit any subsidiary of theCompany to, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a
32

liquidation payment with respect to, any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank paripassu with or junior in interest to the Junior Subordinated Debentures or make any guarantee payments withrespect to any guarantee by the Company of the debt securities of any subsidiary of the Company if suchguarantee ranks pari passu with or junior in interest to the Junior Subordinated Debentures (other than (a)repurchases, redemptions or other acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more
employees, officers, directors or consultants, or in connection with a dividend reinvestment or stockholder stock
purchase plan, (b) as a result of an exchange or conversion of any class or series of the Company's capital stock(or any capital stock of a subsidiary of the Company) for any other class or series of the Company's capitalstock or of any class or series of the Company's indebtedness for any class or series of the Company's capitalstock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of
a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being
paid (or ranks pari passu with or junior to such stock)). Prior to the termination of any such Extension Period,
the Company may further extend the Extension Period, provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Junior Subordinated Debentures. Upon thetermination of any such Extension Period and the payment of all amounts then due on any Interest Payment Date,
the Company may elect to begin a new Extension Period subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof. The Company must give the Property
Trustee, the Regular Trustees and the Indenture Trustee notice of its election of such Extension Period not lessthan one Business Day prior to such record date. The Property Trustee shall give notice of the Company's
election to begin a new Extension Period to the holders of the Capital Securities.
Redemption
The Junior Subordinated Debentures are not redeemable prior to January 15, 2007 unless a Special Eventhas occurred. The Junior Subordinated Debentures are redeemable prior to maturity at the option of theCompany, subject to the receipt of any necessary prior approval of the OCC, (i) on or after January 15, 2007, in
whole or in part at any time, at a redemption price equal to the principal amount of the Junior SubordinatedDebentures so redeemed plus accrued and unpaid interest, if any, to the date of redemption, or (ii) at any time inwhole (but not in part), within 90 days of the occurrence of a Special Event, at such redemption price.
If the Junior Subordinated Debentures are redeemed, the Trust must redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of Junior Subordinated Debentures so
redeemed. See "Description of Capital Securities—Redemption—Mandatory Redemption."
Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption
date to each holder of Junior Subordinated Debentures to be redeemed at its registered address. Unless theCompany defaults in payment of the redemption price, on and after the redemption date interest will cease toaccrue on such Junior Subordinated Debentures or portions thereof called for redemption.
The OCC's risk-based capital guidelines currently provide that a national bank's capital instruments may beredeemed prior to maturity only with the prior approval of the OCC, and that the OCC typically will consider
requests for the redemption of capital instruments when the instruments are to be redeemed with the proceeds of,or are replaced by, a like amount of a similar or higher quality capital instrument.
The redemption of the Junior Subordinated Debentures by the Company prior to their Stated Maturity would
constitute the redemption of capital instruments under the OCC's current risk-based capital guidelines and would
be subject to the prior approval of the OCC.
33

Certain Covenants of the Company
The Company will covenant in the Indenture that if and so long as the Trust is the holder of all Junior
Subordinated Debentures, the Company, as borrower, will pay to the Trust all fees and expenses related to theTrust and the offering of the Capital Securities and will pay, directly or indirectly, all ongoing costs, expenses
and liabilities of the Trust (including any taxes, duties, assessments or governmental charges of whatever nature(other than withholding taxes) imposed by the United States or any domestic taxing authority upon the Trust but
excluding obligations under the Capital Securities).
The Company will also covenant that it will not, and will not permit any subsidiary of the Company to, (i)declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of principal, interest or premium,
if any, on or repay or repurchase or redeem any debt securities of the Company that rank pari passu with or
junior in interest to the Junior Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company if such guarantee ranks paripassu with or junior in interest to the Junior Subordinated Debentures (other than (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors
or consultants, or in connection with a dividend reinvestment or stockholder stock purchase plan, (b) as a resultof an exchange or conversion of any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any other class or series of the Company's capital stock or of any class or seriesof the Company's indebtedness for any class or series of the Company's capital stock, (c) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisionsof such capital stock or the security being converted or exchanged, (d) any declaration of a dividend inconnection with any stockholder's rights plan, or the issuance of rights, stock or other property under any
stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in theform of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise ofsuch warrants, options or other rights is the same stock as that on which the dividend is being paid (or ranks paripassu with or junior to such stock)) if at such time (x) there shall have occurred any event of which the Company
has actual knowledge that (I) with the giving of notice or the lapse of time, or both, would constitute an Indenture
Event of Default with respect to Junior Subordinated Debentures and (II) in respect of which the Company shallnot have taken reasonable steps to cure, (y) the Company shall be in default with respect to its payment of any
obligations under the Guarantee or (z) the Company shall have given notice of its election of an Extension Period
as provided in the Indenture and shall not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing.
Subordination
In the Indenture, the Company has covenanted and agreed that any Junior Subordinated Debentures issued
thereunder will be subordinated and junior in right of payment to all Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets of the Company upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any insolvency or bankruptcy
proceeding of the Company, the holders of Indebtedness will first be entitled to receive payment in full of theprincipal of and premium, if any, and interest, if any, on such Indebtedness before the holders of Junior
Subordinated Debentures or the Property Trustee on behalf of the holders of Capital Securities will be entitled toreceive or retain any payment in respect of the principal of and premium, if any, or interest, if any, on the Junior
Subordinated Debentures; provided, however, that holders of Indebtedness shall not be entitled to receive
payment of any such amounts to the extent that such holders would be required by the subordination provisionsof such Indebtedness to pay such amounts over to the obligees on trade accounts payable or other liabilities
arising in the ordinary course of the Company's business.
In the event of me acceleration of the maturity of any Junior Subordinated Debentures, the holders of all
Indebtedness outstanding at the time of such acceleration will first be entitled to receive payment in full of all34amounts then due thereon (including any amounts due upon acceleration thereof) before the holders of Junior
Subordinated Debentures will be entitled to receive or retain any payment in respect of the principal of andpremium, if any, or interest, if any, on the Junior Subordinated Debentures; provided, however, that holders ofIndebtedness shall not be entitled to receive payment of any such amounts to the extent that such holders would
be required by the subordination provisions of such Indebtedness to pay such amounts over to the obligees on
trade accounts payable or other liabilities arising in the ordinary course of the Company's business.
No payments on account of principal (or premium, if any) or interest, if any, in respect of the Junior
Subordinated Debentures may be made if there shall have occurred and be continuing a default in any payment
with respect to Indebtedness, or an event of default with respect to any Indebtedness resulting in the accelerationof the maturity thereof, or if any judicial proceeding shall be pending with respect to any such default.
"Indebtedness" means, whether recourse is to all or a portion of the assets of the Company and whether or
not contingent, (i) every obligation of the Company for money borrowed; (ii) every obligation of the Company
evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of the Company withrespect to letters of credit, bankers' acceptances or similar facilities issued for the account of the Company; (iv)every obligation of the Company issued or assumed as the deferred purchase price of property or services (butexcluding trade accounts payable or accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of the Company; (vi) every obligation of the Company for claims (as defined in Section
101(4) of the United States Bankruptcy Code of 1978, as amended) in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another person and all dividends of another person
the payment of which, in either case, the Company has guaranteed or is responsible or liable for, directly or
indirectly, as obligor or otherwise; provided that "Indebtedness" shall not include (i) any obligations which, by
their terms, are expressly stated to rank pari passu in right of payment with, or to not be superior in right of
payment to, the Junior Subordinated Debentures, (ii) any Indebtedness of the Company which when incurred
was without recourse to the Company, (iii) any Indebtedness of the Company to any of its subsidiaries, (iv)
Indebtedness to any employee of the Company, or (v) any indebtedness in respect of debt securities issued to
any trust, or a trustee of such trust, partnership or other entity affiliated with the Company that is a financing
entity of the Company in connection with the issuance by such financing entity of securities that are similar to
the Capital Securities.
The Indenture places no limitation on the amount of additional Indebtedness that may be incurred by theCompany or any indebtedness or other liabilities that may be incurred by the Company's subsidiaries. As of
September 30, 1996, Indebtedness of the Company (restated to include the accounts of New Jersey National,
which was merged into the Company on December 6, 1996) aggregated approximately $33 billion (which
includes approximately $32 billion of bank deposits) to which the Junior Subordinated Debentures would be
effectively subordinated.
Indenture Events of Default
The Indenture provides that any one or more of the following described events with respect to the Junior
Subordinated Debentures that has occurred and is continuing constitutes an "Indenture Event of Default" withrespect to the Junior Subordinated Debentures:(i) failure for 30 days to pay any interest on the Junior Subordinated Debentures when due (subject tothe deferral of any due date in the case of an Extension Period); or(ii) failure to pay any principal on the Junior Subordinated Debentures when due whether at maturity,
upon redemption by declaration or otherwise; or(iii) failure to observe or perform in any material respect any other covenant contained in the Indenturefor 90 days after written notice to the Company from the Indenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of outstanding Junior Subordinated Debentures; or35

(iv) the liquidation, insolvency or similar proceeding with respect to the Company or all or
substantially all its property.
The holders of a majority in aggregate outstanding principal amount of Junior Subordinated Debentures
have the right to direct the time, method and place of conducting any proceeding for any remedy available to the
Indenture Trustee. The Indenture Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of Junior Subordinated Debentures may declare the principal due and payable immediately upon an
Indenture Event of Default, and, should the Indenture Trustee or such holders of such Junior SubordinatedDebentures fail to make such declaration, the holders of at least 25% in aggregate liquidation amount of theCapital Securities shall have such right. The holders of a majority in aggregate outstanding principal amount ofJunior Subordinated Debentures may annul such declaration and waive the default if the default (other than the
non-payment of the principal of Junior Subordinated Debentures which has become due solely by suchacceleration) has been cured and a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee, and should the holders of such
Junior Subordinated Debentures fail to annul such declaration and waive such default, the holders of a majority
in aggregate liquidation amount of the Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the Junior Subordinated Debentures
affected thereby may, on behalf of the holders of all the Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited
with the Indenture Trustee) or a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding Junior Subordinated Debenture,and should the holders of such Junior Subordinated Debentures fail to waive such default, the holders of amajority in aggregate liquidation amount of the Capital Securities shall have such right. The Company is required
to file annually with the Indenture Trustee a certificate as to whether or not the Company is in compliance withall the conditions and covenants applicable to it under the Indenture.
In case an Indenture Event of Default shall occur and be continuing, the Property Trustee will have theright to declare the principal of and the interest on such Junior Subordinated Debentures and any other amounts
payable under the Indenture to be forthwith due and payable and to enforce its other rights as a creditor withrespect to such Junior Subordinated Debentures.
Enforcement of Certain Rights by Holders of Capital Securities
If an Indenture Event of Default has occurred and is continuing and such event is attributable to the failureof the Company to pay interest or principal on the Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, a holder of Capital Securities may institute a Direct Action for payment. The
Company may not amend the Indenture to remove the foregoing right to bring a Direct Action without the priorwritten consent of the holders of all of the Capital Securities. Notwithstanding any payment made to such holder
of Capital Securities by the Company in connection with a Direct Action, the Company shall remain obligated to
pay such principal of or interest on the Junior Subordinated Debentures held by the Trust or the Property Trustee
and the Company shall be subrogated to the rights of the holder of such Capital Securities with respect topayments on the Capital Securities to the extent of any payments made by the Company to such holder in any
Direct Action. Except as otherwise described herein, the holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Junior Subordinated Debentures.
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Company shall not consolidate with or merge into any other Person orconvey, transfer or lease its properties and assets substantially as an entirety to any Person, unless (i) in case theCompany consolidates with or merges into another Person or conveys, transfers or leases its properties and assets
substantially as an entirety to any Person, the successor Person is organized under the laws of the United States36

or any state or the District of Columbia, and such successor Person expressly assumes the Company's obligations
on the Junior Subordinated Debentures issued under the Indenture; (ii) immediately after giving effect thereto,
no Indenture Event of Default, and no event which, after notice or lapse of time or both, would become an
Indenture Event of Default, shall have happened and be continuing; (iii) if at the time any Capital Securities areoutstanding, such transaction is permitted under the Declaration and Guarantee and does not give rise to any
breach or violation of the Declaration or Guarantee; (iv) any such lease shall provide that it will remain in effectso long as any Junior Subordinated Debentures are outstanding; and (v) certain other conditions prescribed in
the Indenture are met.
Modification of Indenture
From time to time the Company and the Indenture Trustee may, without the consent of the holders of the
Junior Subordinated Debentures, amend, waive or supplement the Indenture for specified purposes, including,among other things, curing ambiguities, defects or inconsistencies (provided that any such action does notmaterially adversely affect the interest of the holders of Junior Subordinated Debentures), qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act and to add to, delete from or revise
the terms of the Junior Subordinated Debentures to provide for transfer procedures and restrictions substantiallysimilar to those applicable to the Capital Securities (for purposes of assuring that no registration of Junior
Subordinated Debentures is required under the Securities Act or Part 16 of the regulations of the OCC). The
Indenture contains provisions permitting the Company and the Indenture Trustee, with the consent of the holders
of not less than a majority in principal amount of outstanding Junior Subordinated Debentures affected, to modify
the Indenture in a manner affecting the rights of the holders of such Junior Subordinated Debentures; provided
that no such modification may, without the consent of the holder of each outstanding Junior SubordinatedDebentures so affected, (i) change the stated maturity of Junior Subordinated Debentures, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest thereon (except such extension as iscontemplated hereby) or (ii) reduce the percentage of principal amount of Junior Subordinated Debentures theholders of which are required to consent to any such modification of the Indenture, provided that, so long as any
Capital Securities remain outstanding, no such modification may be made that adversely affects the holders ofsuch Capital Securities in any material respect, and no termination of the Indenture may occur, and no waiver of
any Indenture Event of Default or compliance with any covenant under the Indenture may be effective, without
the prior consent of the holders of at least a majority of the aggregate liquidation amount of the outstanding
Capital Securities unless and until the principal of the Junior Subordinated Debentures and all accrued and unpaid
interest thereon have been paid in full and certain other conditions are satisfied.
Defeasance and Discharge
The Indenture provides that the Company, at the Company's option: (a) will be discharged from any and all
obligations in respect of the Junior Subordinated Debentures (except for certain obligations to register the transfer
or exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated Junior Subordinated Debentures,
maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with certain restrictive
covenants of the Indenture (including that described in the second paragraph under "Certain Covenants of theCompany"), in each case if the Company deposits, in trust with the Indenture Trustee, money or U.S.
Government Obligations which through the payment of interest thereon and principal thereof in accordance with
their terms will provide money, in an amount sufficient to pay all the principal of, and interest and premium, ifany, on the Junior Subordinated Debentures on the dates such payments are due in accordance with the terms ofsuch Junior Subordinated Debentures. To exercise any such option, the Company is required to deliver to the
Indenture Trustee an opinion of counsel to the effect that the deposit and related defeasance would not cause theholders of the Junior Subordinated Debentures to recognize income, gain or loss for United States federal income
tax purposes and, in the case of a discharge pursuant to clause (a), such opinion shall be accompanied by a
private letter ruling to the effect received by the Company from the United States Internal Revenue Service orrevenue ruling pertaining to a comparable form of transaction to such effect published by the United States
Internal Revenue Service.
37

Distributions of Junior Subordinated Debentures; Book-Entry Issuance
Under certain circumstances involving the termination of the Trust, Junior Subordinated Debentures may be
distributed to the holders of the Capital Securities in liquidation of the Trust after satisfaction of liabilities tocreditors of the Trust as provided by applicable law. If distributed to holders of Capital Securities in liquidation,
the Junior Subordinated Debentures will initially be issued in the form of global securities and certificatedsecurities. DTC, or any successor depositary, will act as depositary for such global securities. It is anticipatedthat the depositary arrangements for and certain restrictions with respect to such global securities would besubstantially identical to those in effect for the Capital Securities. For a description of global securities andcertificated securities, see "Book-Entry Issuance."
There can be no assurance as to the market price of any Junior Subordinated Debentures that may be
distributed to the holders of Capital Securities.
Payment and Paying Agents
The Company initially will act as Paying Agent with respect to the Junior Subordinated Debentures except
that, if the Junior Subordinated Debentures are distributed to the holders of the Capital Securities in liquidationof such holders' interests in the Trust, the Indenture Trustee will act as the Paying Agent. The Company at any
time may designate additional Paying Agents or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts, except that the Company will be required to maintain a Paying
Agent at the place of payment.
Any moneys deposited with the Indenture Trustee or any Paying Agent, or then held by the Company intrust, for the payment of the principal of and premium, if any, or interest on any Junior Subordinated Debenturesand remaining unclaimed for two years after such principal and premium, if any, or interest has become due andpayable shall, at the request of the Company, be repaid to the Company and the holder of such Junior
Subordinated Debentures shall thereafter look, as a general unsecured creditor, only to the Company for payment
thereof.
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed by and construed in accordancewith the laws of the State of New York.
Information Concerning the Indenture Trustee
The Indenture Trustee shall have and be subject to all the duties and responsibilities specified with respect
to an indenture trustee under the Trust Indenture Act. Subject to such provisions, the Indenture Trustee is under
no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder against the costs, expenses andliabilities which might be incurred thereby. The Indenture Trustee is not required to expend or risk its own funds
or otherwise incur personal financial liability in the performance of its duties if the Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
The Company and certain of its affiliates conduct banking and other transactions with the Indenture Trustee
and its affiliates in the ordinary course of their business.

38

DESCRIPTION OF GUARANTEEThe Guarantee will be executed and delivered by the Company concurrently with the issuance by the Trustof the Capital Securities for the benefit of the holders from time to time of such Capital Securities. The Chase
Manhattan Bank will act as trustee ("Guarantee Trustee") under the Guarantee. This summary of certain
provisions of the Guarantee does not purport to be complete and is subject to, and qualified in its entirety byreference to, all of the provisions of the Guarantee, including the definitions therein of certain terms. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the Capital Securities.
GeneralThe Company will irrevocably and unconditionally agree to pay in full on a subordinated basis, to the extent
set forth in the Guarantee and described herein, the Guarantee Payments (as defined below) to the holders of theCapital Securities, as and when due, regardless of any defense, right of set-off or counterclaim that the Trust
may have or assert other than the defense of payment. The following payments with respect to the Capital
Securities, to the extent not paid by or on behalf of the Trust (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on the Capital Securities, to theextent that the Trust has sufficient funds available therefor at the time, (ii) the redemption price with respect to
any Capital Securities called for redemption, to the extent that the Trust has sufficient funds available therefor atsuch time, or (iii) upon a voluntary or involuntary dissolution, winding up or liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital Securities), the lesser of (a) the
aggregate liquidation amount of the Capital Securities and all accrued and unpaid Distributions thereon to thedate of payment and (b) the amount of assets of the Trust remaining available for distribution to holders ofCapital Securities. The Company's obligation to make a Guarantee Payment may be satisfied by direct paymentof the required amounts by the Company to the holders of the applicable Capital Securities or by causing theTrust to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of the Trust's obligations under the
Capital Securities, but will apply only to the extent that the Trust has sufficient funds available to make suchpayments.
If the Company does not make interest payments on the Junior Subordinated Debentures held by the Trust,the Trust will not be able to pay Distributions on the Capital Securities and will not have funds legally available
therefor. The Guarantee will rank subordinate and junior in right of payment to all Indebtedness of the Company
to the same extent as the Junior Subordinated Debenture. See "—Status of the Guarantee." The Guarantee does
not limit the incurrence or issuance of other secured or unsecured debt of the Company, whether under the
Indenture or any existing or other indenture that the Company may enter into in the future or otherwise.
The Company has, through the Guarantee, the Junior Subordinated Debentures and the Indenture, taken
together, fully and unconditionally guaranteed all of the Trust's obligations under the Capital Securities. No
single document standing alone or operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has the effect of providing a full andunconditional guarantee of the Trust's obligations under the Capital Securities. See "Relationship Among theCapital Securities, the Junior Subordinated Debentures and the Guarantee."
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the Company and will rank subordinate and juniorin right of payment to all Indebtedness of the Company to the same extent as the Junior Subordinated Debenture.
The Guarantee does not place a limitation on the amount of additional Indebtedness that may be incurred by theCompany.
The Guarantee will constitute a guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The Guarantee will be held by the Guarantee
39Trustee for the benefit of the holders of the Capital Securities. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Trust or upon distribution of the Junior
Subordinated Debentures to the holders of the Capital Securities in exchange for all of the Capital Securities.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect the rights of holders of the Capital
Securities (in which case no vote will be required), the Guarantee may not be amended without the prior approvalof the holders of not less than a majority of the aggregate liquidation amount of the outstanding Capital
Securities. The manner of obtaining any such approval will be as set forth under "Description of Capital
Securities—Voting Rights; Amendment of the Declaration." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Company and shallinure to the benefit of the registered holders of the Capital Securities then outstanding.
Events of Default
An event of default under the Guarantee will occur upon the failure of the Company to perform any of its
payment or other obligations thereunder. The holders of a majority in aggregate liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Capital Securities may institute a legal proceeding directly against the Company toenforce its rights under the Guarantee without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee Trustee a certificate as towhether or not the Company is in compliance with all the conditions and covenants applicable to it under the
Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of a default by the Company inperformance of the Guarantee, undertakes to perform only such duties as are specifically set forth in the
Guarantee and, after default with respect to the Guarantee, must exercise the same degree of care and skill as aprudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, theGuarantee Trustee is under no obligation to exercise any of the powers vested in it by the Guarantee at therequest of any holder of any Capital Security unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
The Company and certain of its affiliates conduct banking and other transactions with the Guarantee Trustee
and its affiliates in the ordinary course of their business.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect upon full payment of the Redemption
Price of all of the Capital Securities, upon full payment of the amounts payable upon liquidation of the Trust or
upon distribution of Junior Subordinated Debentures to the holders of the Capital Securities in exchange for allof the Capital Securities. The Guarantee will continue to be effective or will be reinstated, as the case may be, if
at any time any holder of the Capital Securities must restore payment of any sums paid under the Capital
Securities or the Guarantee.
Governing Law
The Guarantee will be governed by and construed in accordance with the laws of the State of New York.
40

RELATIONSHIP AMONG THE CAPITAL SECURITIES,THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities (to the extent the Trust has funds
available for the payment of such Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of Guarantee." If and to the extent that the Company does not make payments under
the Junior Subordinated Debentures, the Trust will not pay Distributions or other amounts due on the Capital
Securities. The Guarantee does not cover payment of Distributions when the Trust does not have sufficient funds
to pay such Distributions. In such event, a holder of Capital Securities may institute a legal proceeding directlyagainst the Company under the Indenture to enforce payment of such Distributions to such holder after therespective due dates. Taken together, the Company's obligations under the Junior Subordinated Debentures, theIndenture and the Guarantee provide, in the aggregate, a full and unconditional guarantee of payments of
distributions and other amounts due on the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full and unconditional guarantee of the Trust's
obligations under the Capital Securities. The obligations of the Company under the Guarantee and the Junior
Subordinated Debentures are subordinate and junior in right of payment to all Indebtedness of the Company tothe extent described herein.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the Junior SubordinatedDebentures, such payments will be sufficient to cover Distributions and other payments due on the Capital
Securities, primarily because (i) the aggregate principal amount of the Junior Subordinated Debentures will beequal to the sum of the aggregate stated liquidation amount of the Capital Securities and the Common Securities;(ii) the interest rate and interest and other payment dates on the Junior Subordinated Debentures will match theDistribution rate and Distribution and other payment dates for the related Capital Securities; (iii) the Company
will pay for all and any costs, expenses and liabilities of the Trust except the Trust's obligations under the Capital
Securities; and (iv) the Declaration further provides that the Trust will not engage in any activity that is notconsistent with the limited purposes of the Trust.
Notwithstanding anything to the contrary in the Indenture, the Company has the right to set-off any payment
it is otherwise required to make thereunder with and to the extent the Company has theretofore made, or isconcurrently on the date of such payment making, a related payment under the Guarantee.
Enforcement Rights of Holders of Capital Securities
A holder of Capital Securities may institute a legal proceeding directly against the Company to enforce its
rights under the Guarantee without first instituting a legal proceeding against the Guarantee Trustee, the Trust or
any other person or entity.
A default or event of default under any Indebtedness of the Company will not constitute a default or
Indenture Event of Default. In addition, in the event of payment defaults under, or acceleration of, Indebtednessof the Company, the subordination provisions of the Indenture provide that, except as otherwise specified therein,no payments may be made in respect of the Junior Subordinated Debentures until such Indebtedness has been
paid in full or any payment default thereunder has been cured or waived. Failure to make required payments on
the Junior Subordinated Debentures would constitute an Indenture Event of Default under the Indenture.
Limited Purpose of Trust
The Capital Securities evidence a beneficial ownership interest in the assets of the Trust, and the Trust exists
for the sole purpose of issuing the Capital Securities and the Common Securities and investing the proceeds
thereof in Junior Subordinated Debentures. A principal difference between the rights of a holder of Capital
Securities and a holder of Junior Subordinated Debentures is that a holder of Junior Subordinated Debentures is
entitled to receive from the Company the principal amount of and interest accrued on Junior Subordinated41Debentures held, while a holder of Capital Securities is entitled to receive Distributions from the Trust (or fromthe Company under the Guarantee) if and to the extent the Trust has funds available for the payment of such
Distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or liquidation of the Trust involving theliquidation of the Junior Subordinated Debentures, the holders of the Capital Securities will be entitled to receive,out of assets held by the Trust, the liquidation distribution in cash. See "Description of Capital Securities—
Liquidation Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of theCompany, the Property Trustee, as holder of the Junior Subordinated Debentures, would be a subordinatedcreditor of the Company, subordinated in right of payment to all Indebtedness to the extent described herein, but
entitled to receive payment in full of principal and interest before any stockholders of the Company receive
payments or distributions. Since the Company is the guarantor under the Guarantee and has agreed to pay for all
costs, expenses and liabilities of the Trust (other than the Trust's obligations to the holders of the Capital
Securities), the positions of a holder of Capital Securities and a holder of the Junior Subordinated Debentures
relative to other creditors and to stockholders of the Company in the event of liquidation or bankruptcy of theCompany would be substantially the same.

42

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Simpson Thacher & Bartlett, in its capacity as special tax counsel to the Company and theTrust ("Tax Counsel"), the following summary accurately describes the material United States federal income
tax consequences that may be relevant to the purchase, ownership and disposition of the Capital Securities.
Unless otherwise stated, this summary deals only with Capital Securities held as capital assets by United States
Persons (defined below) who purchase the Capital Securities upon original issuance at their original offering
price. As used herein, a "United States Person" means (i) a person that is a citizen or resident of the UnitedStates, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States
or any political subdivision thereof, (iii) an estate the income of which is subject to United States federal income
taxation regardless of its source, or (iv) a trust the income of which is subject to United States federal income
tax regardless of its source; provided, however, that a "United States Person" shall include any trust if a court
within the United States is able to exercise primary supervision over the administration of such trust and one ormore United States fiduciaries have the authority to control all the substantial decisions of such trust. The tax
treatment of a holder may vary depending on its particular situation. This summary does not address all the tax
consequences that may be relevant to a particular holder or to holders that may be subject to special tax
treatment, such as banks, real estate investment trusts, regulated investment companies, insurance companies,
dealers in securities or currencies, or tax-exempt investors. In addition, this summary does not include any
description of any alternative minimum tax consequences or the tax laws of any state, local or foreign
government that may be applicable to a holder of Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations promulgated thereunder andadministrative and judicial interpretations thereof, as of the date hereof, all of which are subject to change,
possibly on a retroactive basis. The authorities on which this summary is based are subject to various
interpretations, and the opinions of Tax Counsel are not binding on the Internal Revenue Service ("IRS") or the
courts, either of which could take a contrary position. Moreover, no rulings have been or will be sought from the
IRS with respect to the transactions described herein. Accordingly, there can be no assurance that the IRS will
not challenge the opinions expressed herein or that a court would not sustain such a challenge. Nevertheless,
Tax Counsel has advised that it is of the view that, if challenged, the opinions expressed herein would besustained by a court with jurisdiction in a properly presented case.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAXCONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE CAPITALSECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE CAPITALSECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF
CAPITAL SECURITIES—REDEMPTION—SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF
JUNIOR SUBORDINATED DEBENTURES."Classification of the Trust
In connection with the issuance of the Capital Securities, Tax Counsel will deliver an opinion that undercurrent law and assuming full compliance with the terms of the Declaration and other documents, the Trust will
be classified as a grantor trust and will not be taxable as a corporation for United States federal income tax
purposes. Accordingly, for United States federal income tax purposes, each holder of Capital Securities will betreated as owning an undivided beneficial interest in the Junior Subordinated Debentures and, thus, will be
required to include in its gross income its pro rata share of interest income or original issue discount that is paidor accrued on the Junior Subordinated Debentures.
Classification of the Junior Subordinated Debentures
The Company, the Trust and the holders of the Capital Securities (by the acceptance of a beneficial interestin a Capital Security) will agree to treat the Junior Subordinated Debentures as indebtedness for all United Statesfederal income tax purposes. In connection with the issuance of the Junior Subordinated Debentures, Tax
43

Counsel will deliver an opinion that, under current law, and based on the representations, facts and assumptions
set forth herein, the Junior Subordinated Debentures will be classified as indebtedness for United States federal
income tax purposes.
Interest Income and Original Issue DiscountUnder the applicable Treasury regulations, the Junior Subordinated Debentures will not be treated as issued
with "original issue discount" ("OID") within the meaning of section 1273(a) of the Code. Accordingly, except
as set forth below, stated interest on the Junior Subordinated Debentures generally will be taxable to a holder as
ordinary income at the time it is paid or accrued in accordance with such holder's regular method of tax
accounting.
If, however, the Company exercises its right to defer payments of interest on the Junior SubordinatedDebentures, the Junior Subordinated Debentures will become OID instruments at such time and all holders of
the Junior Subordinated Debentures and, consequently, holders of the Capital Securities will be required to
accrue their pro rata share of OID (which will include both the stated interest and any de minimis OID on the
Junior Subordinated Debentures) on a daily economic accrual basis during the Extension Period even though theCompany will not pay such interest until the end of the Extension Period, and even though some holders may
use the cash method of tax accounting. Moreover, thereafter the Junior Subordinated Debentures will be taxed as
OID instruments for as long as they remain outstanding. Thus, even after the end of an Extension Period, allholders would be required to continue to include the stated interest (and any de minimis OID) on the Junior
Subordinated Debentures in income on a daily basis, regardless of their method of tax accounting and in advanceof receipt of the cash attributable to such interest income. Under the OID economic accrual rules, a holder would
accrue an amount of interest income each year that approximates the stated interest payments called for under
the terms of the Junior Subordinated Debentures, and actual cash payments of interest on the Junior SubordinatedDebentures would not be reported separately as taxable income. Any amount of OID included in a holder's grossincome (whether or not during an Extension Period) with respect to a Capital Security will increase such holder's
tax basis in such Capital Security, and the amount of Distributions received by a holder in respect of such accrued
OID will reduce the tax basis of such Capital Security.
The Treasury regulations described above have not yet been addressed in any rulings or other interpretations
by the IRS, and it is possible that the IRS could take a contrary position. If the IRS were to assert successfully
that the stated interest on the Junior Subordinated Debentures was OID regardless of whether the Company
exercises its option to defer payments of interest on such debentures, all holders of Capital Securities would be
required to include such stated interest in income on a daily economic accrual basis as described above.
Corporate holders of Capital Securities will not be entitled to a dividends-received deduction with respect
to any income recognized by such holders with respect to the Capital Securities.
Distribution of Junior Subordinated Debentures or Cash upon Liquidation of the TrustAs described under the caption "Description of Junior Subordinated Debentures—Distribution of Junior
Subordinated Debentures; Book-Entry Issuance," Junior Subordinated Debentures may be distributed to holders
in exchange for the Capital Securities and in liquidation of the Trust. Under current law, such a distribution
would be non-taxable, and will result in the holder receiving directly its pro rata share of the Junior SubordinatedDebentures previously held indirectly through the Trust, with a holding period and aggregate tax basis equal tothe holding period and aggregate tax basis such holder had in its Capital Securities before such distribution. If,
however, the liquidation of the Trust were to occur because the Trust is subject to United States federal income
tax with respect to income accrued or received on the Junior Subordinated Debentures, the distribution of the
Junior Subordinated Debentures to holders would be a taxable event to the Trust and to each holder and a holder
would recognize gain or loss as if the holder had exchanged its Capital Securities for the Junior SubordinatedDebentures it received upon liquidation of the Trust. A holder would accrue interest in respect of the Junior
Subordinated Debentures received from the Trust in the manner described above under "—Interest Income andOriginal Issue Discount."44Under certain circumstances described herein (see "Description of Capital Securities—Redemption—
Special Event Redemption or Distribution of Junior Subordinated Debentures"), the Junior SubordinatedDebentures may be redeemed for cash, with the proceeds of such redemption distributed to holders in redemptionof their Capital Securities. Under current law, such a redemption would constitute a taxable disposition of theredeemed Capital Securities for United States federal income tax purposes, and a holder would recognize gain orloss as if it sold such redeemed Capital Securities for cash. See "—Sales of Capital Securities."
Sales of Capital Securities
A holder that sells Capital Securities will recognize gain or loss equal to the difference between the amountrealized by such holder on the sale of the Capital Securities (except to the extent that such amount realized ischaracterized as a payment in respect of accrued but unpaid interest on such holder's allocable share of the Junior
Subordinated Debentures that the holder had not included in gross income previously) and the holder's adjusted
tax basis in the Capital Securities sold. Such gain or loss generally will be a capital gain or loss and generally
will be taxable as a long-term capital gain or loss if the Capital Securities have been held for more than one
year. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for UnitedStates federal income tax purposes.
Proposed Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was introduced in the 104th
Congress which would have, among other things, generally denied interest deductions for interest on an
instrument, issued by a corporation that has a maximum term of more than 20 years and that is not shown asindebtedness on the separate balance sheet of the issuer or, where the instrument is issued to a related party (otherthan a corporation) where the holder or some other related party issues a related instrument that is not shown asindebtedness on the issuer's consolidated balance sheet. The above-described provisions of the Bill was proposed
to be effective generally for instruments issued on or after December 7, 1995. If this provision were to apply to
the Junior Subordinated Debentures, the Company would not be able to deduct interest on the Junior
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate Finance and House Waysand Means Committees issued the Joint Statement to the effect that it was their intention that the effective dateof the Bill, if enacted, would be no earlier than the date of appropriate Congressional action. In addition,subsequent to the publication of the Joint Statement, Senator Daniel Patrick Moynihan and Representatives Sam
M. Gibbons and Charles B. Rangel sent the Democrat Letters to Treasury Department officials concurring withthe views expressed in the Joint Statement. The 104th Congress adjourned without enacting the Bill. Moreover,
if the principles contained in the Joint Statement and Democrat Letters were followed, any similar legislationthat is subsequently proposed or enacted would not apply to the Junior Subordinated Debentures. It is possiblethat similar legislative proposals may be offered by the Administration and considered by Congress in 1997.
There can be no assurance that future legislative or administrative proposals or final legislation will not adversely
affect the ability of the Company to deduct interest on the Junior Subordinated Debentures or otherwise affectthe tax treatment described herein. Such a change, therefore, could give rise to a Tax Event, which would permit
the Company to cause the redemption of the Capital Securities or to terminate the Trust and distribute the Junior
Subordinated Debentures to the holders of Trust Securities in liquidation of the Trust as described more fully
under "Description of Capital Securities—Redemption—Special Event Redemption or Distribution of Junior
Subordinated Debentures."
Non-United States Holders
As used herein, the term "Non-United States Holder" means any holder that is not a United States Person(as defined above). As discussed above, the Capital Securities will be treated as evidence of an indirect beneficial
ownership interest in the Junior Subordinated Debentures. See "—Classification of the Trust." Thus, underpresent United States federal income tax law, and subject to the discussion below concerning backup
withholding:45

(a) no withholding of United States federal income tax will be required with respect to the payment by
the Trust or the Company or any paying agent of principal or interest (which for purposes of this discussion
includes any OID) on the Junior Subordinated Debentures to a Non-United States Holder, provided (i) thatthe beneficial owner of the Capital Securities ("Beneficial Owner") does not actually or constructively own
10% or more of the total combined voting power of all classes of stock of the Company entitled to votewithin the meaning of section 871(h)(3) of the Code and the regulations thereunder, (ii) the Beneficial
Owner is not a controlled foreign corporation that is related to the Company through stock ownership, (in)the Beneficial Owner is not a bank whose receipt of interest on the Junior Subordinated Debentures is
described in section 881(c)(3)(A) of the Code and (iv) the Beneficial Owner satisfies the statement
requirement (described generally below) set forth in section 871(h) and section 881(c) of the Code and theregulations thereunder; and(b) no withholding of United States federal income tax will be required with respect to any gain
realized by a Non-United States Holder upon the sale or other disposition of the Capital Securities (or Junior
Subordinated Debentures).
To satisfy the requirement referred to in (a)(iv) above, the Beneficial Owner, or a financial institution
holding the Capital Securities on behalf of such owner, must provide, in accordance with specified procedures,to the Trust or its paying agent, a statement to the effect that the Beneficial Owner is not a United States Person.
Pursuant to current temporary Treasury regulations, these requirements will be met if (1) the Beneficial Owner
provides his name and address, and certifies, under penalties of perjury, that it is not a United States Person(which certification may be made on an IRS Form W-8 (or successor form)) or (2) a financial institution holding
the Capital Securities on behalf of the Beneficial Owner certifies, under penalties of perjury, that such statement
has been received by it and furnishes a paying agent with a copy thereof.
If a Non-United States Holder cannot satisfy the requirements of the "portfolio interest" exception
described in (a) above, payments of interest (including any OID) made to such Non-United States Holder will be
subject to a 30% withholding tax unless the Beneficial Owner provides the Trust or the Company or any paying
agent, as the case may be, with a properly executed (1) IRS Form 1001 (or successor form) claiming an
exemption from, or a reduction of, such withholding tax under the benefit of a tax treaty or (2) IRS Form 4224
(or successor form) stating that interest paid on the Junior Subordinated Debentures is not subject to withholding
tax because it is effectively connected with the Beneficial Owner's conduct of a trade or business in the UnitedStates.
As discussed above, legislation was introduced in the 104th Congress that would have affected thecharacterization of interest payable on the Junior Subordinated Debentures, and would have adversely affected
Non-United States Holders by characterizing income derived from the Junior Subordinated Debentures as
dividends which would generally be subject to 30% withholding tax when paid to a Non-United States Holder.
The 104th Congress adjourned without enacting such legislation. However, it is possible that legislation could
be enacted in the future that could affect the characterization of income paid on the Junior SubordinatedDebentures. See "—Proposed Tax Law Changes".
If a Non-United States Holder is engaged in a trade or business in the United States and interest on the
Junior Subordinated Debentures is effectively connected with the conduct of such trade or business, the NonUnited States Holder, although exempt from the withholding tax discussed above, will be subject to United Statesfederal income tax on such interest income on a net income basis in the same manner as if it were a UnitedStates Person. In addition, if such Non-United States Holder is a foreign corporation, it may be subject to abranch profits tax equal to 30% of its effectively connected earnings and profits for the taxable year, subject toadjustments. For this purpose, such interest income would be included in such foreign corporation's earnings
and profits.
Any gain realized upon the sale or other disposition of the Capital Securities (or the Junior SubordinatedDebentures) generally will not be subject to United States federal income tax unless (i) such gain is effectively
connected with a trade or business in the United States of the Non-United States Holder, (ii) in the case of a46

Non-United States Holder who is an individual, such individual is present in the United States for 183 days ormore in the taxable year of such sale, exchange or retirement, and certain other conditions are met, and (iii) in
the case of any gain representing accrued interest on the Junior Subordinated Debentures, the requirements of
the "portfolio interest" exception described in (a) above are not satisfied.
Information Reporting and Backup Withholding
The amount of interest (or OID, if any) accrued on the Capital Securities (or the Junior SubordinatedDebentures) held of record by United States Persons (other than corporations and other exempt holders) will bereported annually to such holders and to the IRS. The Property Trustee currently intends to deliver such reports
to holders of record prior to January 31 following each calendar year. It is anticipated that persons who hold
Capital Securities as nominees for beneficial holders will report the required tax information to beneficial holders
on Form 1099.
"Backup withholding" at a rate of 31% will apply to payments of interest (or OID, if any) to non-exempt
United States Persons unless the holder furnishes its taxpayer identification number in the manner prescribed inapplicable Treasury regulations, certifies that such number is correct, certifies as to no loss of exemption frombackup withholding and meets certain other conditions.
No information reporting or backup withholding will be required with respect to payments made by theTrust or any paying agent to Non-United States Holders if a statement described in (a)(iv) under "Non-UnitedStates Holders" has been received and the payor does not have actual knowledge that the beneficial owner is a
United States Person.
In addition, backup withholding and information reporting will not apply if payments of the principal,
interest, OID or premium on the Junior Subordinated Debentures are paid or collected by a foreign office of acustodian, nominee or other foreign agent on behalf of the Beneficial Owner, or if a foreign office of a broker(as defined in applicable Treasury regulations) pays the proceeds of the sale of the Capital Securities (or the
Junior Subordinated Debentures) to the owner thereof. If, however, such nominee, custodian, agent or broker is,
for United States federal income tax purposes, a United States Person, a controlled foreign corporation or aforeign person that derives 50% or more of its gross income for certain periods from the conduct of a trade orbusiness in the United States, such payments will not be subject to backup withholding but will be subject toinformation reporting, unless (1) such custodian, nominee, agent or broker has documentary evidence in its
records that the Beneficial Owner is not a United States Person and certain other conditions are met or (2) the
Beneficial Owner otherwise establishes an exemption.
Payment of the proceeds from disposition of Capital Securities (or the Junior Subordinated Debentures) toor through a United States office of a broker is subject to information reporting and backup withholding unlessthe holder or beneficial owner establishes an exemption from information reporting and backup withholding.
Any amounts withheld from a holder of the Capital Securities under the backup withholding rules will beallowed as a refund or a credit against such holder's United States federal income tax liability, provided therequired information is furnished to the IRS.

47

BOOK-ENTRY ISSUANCE
Capital Securities offered and sold to qualified institutional buyers in reliance on Rule 144A ("Rule 144A
Capital Securities") initially will be represented by one or more Capital Securities in registered, global form
(collectively, the "Restricted Global Capital Securities"). Capital Securities offered and sold to institutional
accredited investors in transactions exempt from registration under the Securities Act not made in reliance on
Rule 144A or Regulation S ("Other Capital Securities") will be issued only in registered, certificated (i.e., nonglobal) form. Capital Securities offered and sold outside of the United States in reliance on Regulation S under
the Securities Act will be issued in the form of a single temporary global note (the "Regulation S Temporary
Global Capita! Securities"). Beneficial interests in a Regulation S Temporary Global Capital Security will be
exchanged for beneficial interests in a single permanent global note (the "Regulation S Permanent Capital
Securities" and, together with the Regulation S Temporary Global Note, the "Regulation S Global Capital
Securities") upon the later of (i) the Restricted Period (as defined herein) and (ii) the first date on which therequisite certifications are provided to the Property Trustee as described under "—Payments; Certifications by
Holders of Regulation S Temporary Capital Securities." Regulation S Global Capital Securities together with
Restricted Global Capital Securities are referred to herein as the "Global Capital Securities."
The Global Capital Securities will be deposited upon issuance with the Property Trustee as custodian for
The Depository Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its
nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below.
Through and including the 40th day after the later of the commencement of the offering and the issue date (suchperiod through and including such 40th day, the "Restricted Period"), beneficial interests in the Regulation S
Global Capital Securities may be held only through the Euroclear System ("Euroclear") and Cedel, S.A.
("CEDEL") (as indirect participants in DTC), unless transferred to a person that takes delivery through the
Restricted Global Capital Securities in accordance with the certification requirements described below. Beneficial
interests in the Restricted Global Capital Securities may not be exchanged for beneficial interests in theRegulation S Global Capital Securities at any time except in the limited circumstances described below. See"—Exchanges between Regulation S Capital Securities and Rule 144A Capital Securities."
Except as set forth below, the Global Capital Securities may be transferred, in whole and not in part, only
to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form except in the limited circumstances
described below. See "Exchange of Book-Entry Capital Securities for Certificated Capital Securities."
Other Capital Securities may not be exchanged for beneficial interests in any Global Capital Securities
except in the limited circumstances described below. See "Exchange of Certificated Capital Securities for BookEntry Capital Securities."
Capital Securities (including beneficial interests in the Restricted Global Capital Securities) will be subject
to certain restrictions on transfer and (other than Regulation S Global Capital Securities) will bear a restrictive
legend as described under "Notice to Investors." In addition, transfer of beneficial interests in the Global Capital
Securities will be subject to the applicable rules and procedures of DTC and its direct or indirect participants(including, if applicable, those of Euroclear and CEDEL), which may change from time to time.
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose trust company created to holdsecurities for its participating organizations (collectively, the "Participants") and to facilitate the clearance andsettlement of transactions in those securities between Participants through electronic book-entry changes inaccounts of its Participants. The Participants include securities brokers and dealers (including the Initial
Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's
system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect48

Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC
only through the Participants or the Indirect Participants. The ownership interest and transfer of ownershipinterest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of theParticipants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures established by it, (i) upon
deposit of the Global Capital Securities, DTC will credit the accounts of Participants designated by the Initial
Purchasers with portions of the principal amount of the Global Capital Securities and (ii) ownership of suchinterests in the Global Capital Securities will be shown on, and the transfer of ownership thereof will be effected
only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial interests in the Global Capital Securities).
Investors in the Restricted Global Capital Securities may hold their interests therein directly through DTC
if they are participants in such system, or indirectly through organizations (including Euroclear and CEDEL)
which are participants in such system. Investors in the Regulation S Global Capital Securities must initially holdtheir interests therein through Euroclear or CEDEL, if they are participants in such systems, or indirectly throughorganizations which are participants in such systems. After the latter of the expiration of the Restricted Period
and the first date on which the requisite certificates are provided to the Property Trustee as described under"—Payments; Certifications by Holders of the Regulation S Temporary Global Capital Security" (but notearlier), investors may also hold interests in the Regulation S Global Capital Securities through organizations
other than Euroclear and CEDEL that are participants in the DTC system. Euroclear and CEDEL will holdinterests in the Regulation S Global Capital Securities on behalf of their participants through customers'
securities accounts in their respective names on the books of their respective depositaries, which are Morgan
Guaranty Trust Company of New York, Brussels office, as operator of Euroclear, and Citibank, N.A., asdepository of CEDEL. The depositaries, in turn, will hold such interests in the Regulation S Global Capital
Securities in customers' securities accounts in the depositaries' names on the books of DTC. All interest in a
Global Capital Security, including those held through Euroclear or CEDEL, may be subject to the procedures
and requirements of DTC. Those interests held through Euroclear or CEDEL may also be subject to theprocedures and requirements of such system. The laws of some states require that certain persons take physicaldelivery in certificated form of securities that they own. Consequently, the ability to transfer beneficial interests
in a Global Capital Security to such persons will be limited to that extent. Because DTC can act only on behalfof Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person
having beneficial interests in a Global Capital Security to pledge such interests to persons or entities that do notparticipate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lackof a physical certificate evidencing such interests. For certain other restrictions on the transferability of theCapital Securities, see "—Exchange of Book-Entry Capital Securities for Certificated Capital Securities,""—Exchange of Certificated Capital Securities for Book-Entry Capital Securities" and "—Exchanges Between
Regulation S Capital Securities and Rule 144A Capital Securities" below.
Except as described below, owners of interests in the Global Capital Securities will not have Capital
Securities registered in their name, will not received physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof for any purpose.
Payments in respect of the Global Capital Security registered in the name DTC or its nominee will bepayable by the Property Trustee to DTC in its capacity as the registered holder. The Property Trustee will treat
the persons in whose names the Capital Securities, including the Global Capital Securities, are registered as theowners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever.
Consequently, neither the Property Trustee nor any agent thereof has or will have any responsibility or liabilityfor (i) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the Global Capital Securities, or for maintaining,supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to
the beneficial ownership interests in the Global Capital Securities or (ii) any other matter relating to the actions
and practices of DTC or any of its Participants or Indirect Participants. DTC has advised the Trust and the49Company that its current practice, upon receipt of any payment in respect of securities such as the Capital
Securities, is to credit the accounts of the relevant Participants with the payment on the payment date unless
DTC has reason to believe it will not receive payment on such payment date. Payments by the Participants andthe Indirect Participants to the beneficial owners of Capital Securities will be governed by standing instructions
and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not
be the responsibility of DTC, the Property Trustee or the Trust. Neither the Trust nor the Property Trustee will
be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the Capital
Securities, and the Trust and the Property Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Except for trades involving only Euroclear or CEDEL participants, interests in the Global Capital Securities
will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC andits participants.
Transfers between Participants in DTC will be effected in accordance with DTC' s procedures, and will besettled in same-day funds. Transfers between participants in Euroclear or CEDEL will be effected in the ordinary
way in accordance will their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the Capital Securities described herein,cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or CEDEL participants,on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or
CEDEL, as the case may be, by its respective depositary; however, such cross-market transactions will requiredelivery of instructions to Euroclear or CEDEL, as the case may be, by the counterparty in such system inaccordance with the rules and procedures and within the established deadlines (Brussels time) of such system.
Euroclear or CEDEL, as the case may be, will, if the transaction meets its settlement requirements, deliver
instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or
receiving interests in the relevant Global Capital Securities in DTC, and making or receiving payment inaccordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and
CEDEL participants may not deliver instructions directly to the depositaries for Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear or CEDEL participant purchasing aninterest in a Global Capital Security from a Participant in DTC will be credited, and any such crediting will bereported to the relevant Euroclear of CEDEL participant, during the securities settlement processing day (whichmust be a business day for Euroclear and CEDEL) immediately following the settlement date of DTC. Cashreceived in Euroclear or CEDEL as a result of sales of interest in a Global Capital Security by or through aEuroclear or CEDEL participant to a Participant in DTC will be received with value on the settlement date of
DTC but will be available in the relevant Euroclear or CEDEL cash account only as of the business day for
Euroclear or CEDEL following DTC's settlement date.
DTC has advised the Trust and the Company that it will take any action permitted to be taken by a holder
of Capital Securities only at the direction of one or more Participants to whose account with DTC interests in
the Global Capital Securities are credited. However, if there is an Event of Default, DTC reserves the right toexchange the Global Capital Securities for legended Capital Securities in certificated form and to distribute such
Capital Securities to its Participants.
The information in this section concerning DTC, Euroclear and CEDEL and their book-entry systems has
been obtained from sources that the Trust and the Company believe to be reliable, but neither the Trust nor theCompany takes responsibility for the accuracy thereof.
Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures to facilitate transfers ofinterest in the Regulation S Global Capital Securities and in the Restricted Global Capital Securities among
participants in DTC, Euroclear and CEDEL, they are under no obligation to perform or to continue to perform
50

such procedures, and such procedures may be discontinued at any time. Neither the Trust nor the Property
Trustee will have any responsibility for the performance by DTC, Euroclear or CEDEL or their respective
participants or indirect participants of their respective obligations under the rules and procedures governing theiroperations.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Capital Securities in registered certificated form if (i) DTC(x) notifies the Trust that it is unwilling or unable to continue as Depositary for the Global Capital Security and
the Trust thereupon fails to appoint a successor Depositary or (y) has ceased to be a clearing agency registeredunder the Exchange Act, (ii) the Company in its sole discretion elects to cause the issuance of the Capital
Securities in certificated form or (iii) there shall have occurred and be continuing an Event of Default or any
event which after notice or lapse of time or both would be an Event of Default under the Declaration. In addition,
beneficial interests in a Global Capital Security may be exchanged for certificated Capital Securities upon request
but only upon at least 20 days' prior written notice given to the Property Trustee by or on behalf of DTC in
accordance with customary procedures. In all cases, certificated Capital Securities delivered in exchange for any
Global Capital Security or beneficial interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures) andwill bear, in the case of the Restricted Global Capital Security, the restrictive legend referred to in "Notice toInvestors."
Exchange of Certificated Capital Securities for Book-Entry Capital Securities
Other Capital Securities which will be issued in certificated form may not be exchanged for beneficial
interests in any Global Capital Security unless such exchange occurs in connection with a transfer of such Other
Capital Securities and the transferor first delivers to the Property Trustee a written certificate to the effect thatsuch transfer will comply with the appropriate transfer restrictions applicable to such Capital Securities as set
forth in Appendix A hereto. In the case of any such exchange for an interest in the Regulation S Global Capital
Security, such transfer must occur pursuant to Regulation S or Rule 144 (if available).
Exchanges Between Regulation S Capital Securities and Rule 144A Capital Securities
Prior to the expiration of the Restricted Period, beneficial interests in the Regulation S Global Capital
Security may be exchanged for beneficial interests in the Restricted Global Capital Security only if suchexchange occurs in connection with a transfer of the Capital Securities pursuant to Rule 144A and the transferor
first delivers to the Property Trustee a written certificate to the effect that the Capital Securities are beingtransferred to a person who the transferor reasonably believes is a qualified institutional buyer within the meaningof Rule 144A under the Securities Act, purchasing for its own account or the account of a qualified institutionalbuyer in a transaction meeting the requirements of Rule 144A and in accordance with all applicable securities
laws of the states of the United States and other jurisdictions.
Beneficial interests in the Restricted Global Capital Securities may be transferred to a person who takes
delivery in the form of an interest in the Regulation S Global Capital Securities, whether before or after the
expiration of the Restricted Period, only if the transferor first delivers to the Property Trustee a written certificate
to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (ifavailable) and that, if such transfer occurs prior to the expiration of the Restricted Period, the interest transferred
will be held immediately thereafter through Euroclear or CEDEL.
Transfers involving an exchange of a beneficial interest in the Regulation S Global Capital Securities for abeneficial interest in the Restricted Global Capital Securities or vice versa will be effected in DTC by means ofan instruction originated by the Property Trustee through the DTC Deposit/Withdraw at Custodian ("DWAC")
system.
Any beneficial interest in one of the Global Capital Securities that is transferred to a person who takes
delivery in the form of an interest in the other Global Capital Security will, upon transfer, cease to be an interestin such Global Capital Security and will become an interest in the other Global Capital Security and, accordingly,
51

will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interest in suchother Global Capital Security for so long as it remains such an interest.
Payments; Certifications by Holders of the Regulation S Temporary Global Capital Security
A holder of a beneficial interest in a Regulation S Temporary Global Capital Security must provide
Euroclear or CEDEL as the case may be, with a certificate in the form required by the Declaration certifying thatthe beneficial owner of the interest in such Capital Security is not a U.S. Person, and Euroclear or CEDEL, as
the case may be, must provide to the Property Trustee (or the paying agent if other than the Property Trustee) a
certificate in the form required by the Declaration, prior to (i) the payment of Distributions, Redemption Price or
any other payment with respect to such holder's beneficial interest in the Regulation S Temporary Global Capital
Security and (ii) any exchange of such beneficial interest for a beneficial interest in a Regulation S Permanent
Global Capital Security.
NOTICE TO INVESTORS
Purchasers are advised to consult legal counsel prior to selling the Capital Securities. Each purchaser of theCapital Securities, by its acceptance thereof, will be deemed to have acknowledged, represented and agreed with
the Initial Purchasers, the Company, CoreStates Capital Markets and the Trust as follows:(1) It understands and acknowledges that the Capital Securities have not been registered under the
Securities Act or any other applicable securities law or Part 16 of the regulations of the OCC and, unless soregistered, may not be offered, sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act, Part 16 of the regulations of the OCC or any other applicable securities law,pursuant to an exemption therefrom or in a transaction not subject thereto, and in each case, in compliance withthe conditions for transfer set forth in paragraph (4) below.
(2) It is:(a) a QIB within the meaning of Rule 144A under the Securities Act and is aware that any sale of theCapital Securities to it will be made in reliance on Rule 144A. Such acquisition will be for its own accountor for the account of another QIB;(b) an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act (an "institutional accredited investor") that is purchasing Capital Securities with aprincipal amount of at least $100,000, and if the Capital Securities are to be purchased for one or moreaccounts ("investor accounts") for which it is acting as fiduciary or agent, each such account is an
institutional accredited investor that is purchasing Capital Securities with a principal amount of at least$100,000. In the normal course of its business or its investing activities, it invests in or purchases securities
similar to the Capital Securities and it has such knowledge and experience in financial business matters that
it is capable of evaluating the merits and risks of purchasing the Capital Securities. It is aware that it (orany investor account) may be required to bear the economic risk of an investment in the Capital Securities
for an indefinite period of time and it (or such account) is able to bear such risk for an indefinite period andthat it will be required to sign an agreement in the form attached hereto as Appendix A; or(c) a non-U.S. person and is acting in reliance upon Regulation S under the Securities Act. As usedherein "U.S. Person" has the meaning given it under Regulation S.
(3) It acknowledges that none of the Company, CoreStates Capital Markets, the Trust or the Initial
Purchasers, or any person representing such parties, has made any representation to it with respect to theCompany, the Trust or the offering of the Capital Securities, other than in this Offering Memorandum, which
has been delivered to it and upon which it is relying in making its investment decision with respect to the Capital
Securities. Accordingly, it acknowledges that no representation or warranty is made by the Initial Purchasers as
to the accuracy or completeness of such materials. It has had access to such financial and other information52

concerning the Company, the Trust and the Capital Securities as it deemed necessary in connection with its
decision to purchase any of the Capital Securities, including an opportunity to ask questions and request
information from the Company and the Initial Purchasers.
(4) It is purchasing the Capital Securities for its own account, or for one or more investor accounts forwhich it is acting as a fiduciary or agent, in each case for investment, and not with a view to, or for offer or salein connection with, any distribution thereof in violation of the Securities Act or Part 16 of the regulations of the
OCC, subject to any requirement of law that the disposition of its property or the property of such investor
account or accounts be at all times within its or their control and subject to its or their ability to resell such
Capital Securities pursuant to Rule 144A, Regulation S or any exemption from registration available under the
Securities Act and Part 16 of the regulations of the OCC. It agrees on its own behalf and on behalf of any investor
account for which it is purchasing the Capital Securities, and each subsequent holder of the Capital Securities by
its acceptance thereof will agree, to offer, sell or otherwise transfer such Capital Securities prior to the date whichis three years after the later of the date of original issue and the last date on which the Company or any affiliateof the Company was the owner of such Capital Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a registration statement which has been declaredeffective under the Securities Act and Part 16 of the regulations of the OCC, (c) for so long as the Capital
Securities are eligible for resale pursuant to Rule 144A, to a person it reasonably believes is a QIB that purchases
for its own account or for the account of a QIB to whom notice is given that the transfer is being made in relianceon Rule 144A, (d) outside the United States in a transaction meeting the requirements of Rule 904 under the
Securities Act, (e) to an institutional "accredited investor," within the meaning of subparagraph (a) (1), (2), (3)or (7) of Rule 501 under the Securities Act that is acquiring the Capital Securities for its own account or for theaccount of such an institutional "accredited investor," for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the Securities Act or Part 16 of the regulationsof the OCC or (f) pursuant to another available exemption from the registration requirements of the Securities
Act and Part 16 of the regulations of the OCC and, in each case, in accordance with the applicable securities
laws of any state of the United States or any other applicable jurisdiction and subject to any requirement of law
that the disposition of its property or the property of such investor account or accounts be at all times within its
or their control. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. Each purchaser acknowledges that the Company and the Property Trustee reserve the rightprior to any offer, sale or other transfer prior to the Resale Restriction Termination Date of the Capital Securities
pursuant to clauses (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or otherinformation acceptable to the Company and the Property Trustee in form and substance. Each purchaser
acknowledges that each Capital Security will contain a legend substantially to the following effect: "THISSECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR PART 16 OF
THE REGULATIONS OF THE OFFICE OF THE CONTROLLER OF THE CURRENCY ("OCC") AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBYNOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OFSECTION 5 OF THE SECURITIES ACT AND PART 16 OF THE OCC'S REGULATIONS PROVIDED BY
RULE 144A, REGULATION S OR ANOTHER EXEMPTION THEREUNDER. THE HOLDER OF THISSECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR
THE BENEFIT OF THE COMPANY THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY
WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR PART 16 OF THE
REGULATIONS OF THE OCC; (II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THISSECURITY PRIOR TO THE LATER OF THE DATE WHICH IS THREE YEARS AFTER THE DATE OFORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF SUCH RESTRICTED SECURITIES (OR ANY
PREDECESSOR) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATIONSTATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND PART53

16 OF THE REGULATIONS OF THE OCC, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FORRESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIESACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE
UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR," WITHIN THE MEANINGOF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT ISACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR PART 16 OF THE REGULATIONS OF THE OCC, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR PART 16 OF THE REGULATIONS OF THE OCC, AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITEDSTATES OR ANY APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENTHOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE
RESALE RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITIONPURSUANT TO THE FOREGOING CLAUSES (II)(D) (E) AND (F) IS SUBJECT TO THE RIGHT OF THE
ISSUER OF THIS SECURITY AND THE PROPERTY TRUSTEE FOR SUCH SECURITIES TO REQUIRETHE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATIONACCEPTABLE TO THEM IN FORM AND SUBSTANCE."(5) It understands and acknowledges that the purchase by it of any Capital Security constitutes a
representation by it that it either (a) is not a Plan or a Plan Asset Entity and is not purchasing such Capital
Securities on behalf of or with "plan assets" of any Plan or (b) is eligible for the exemptive relief available
under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 with respect to such purchase. Capitalized terms used in thisrepresentation have the meanings therefor set out under "Benefit Plan Considerations."(6) It acknowledges that the Company, CoreStates Capital Markets, the Initial Purchasers, the Trust andothers will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements
and agrees that, if any of the acknowledgments, representations and agreements deemed to have been made bypurchase of the Capital Securities are no longer accurate, it shall promptly notify the Initial Purchasers. If it isacquiring any Capital Securities as a fiduciary or agent for one or more investor accounts, it represents that it hassole investment discretion with respect to each such account and it has full power to make the foregoing
acknowledgments and agreements on behalf of each such account.

54

BENEFIT PLAN CONSIDERATIONSBefore authorizing an investment in the Capital Securities, fiduciaries of pension, profit sharing or other
employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended("ERISA"), should consider, among other matters, (a) ERISA's fiduciary standards (including its prudence anddiversification requirements), (b) whether such fiduciaries have authority to make such investment in the Capital
Securities under the applicable Plan investment policies and governing instruments, and (c) rules under ERISA
and the Code that prohibit Plan fiduciaries from causing a Plan to engage in a "prohibited transaction."
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as individual retirement
accounts and Keogh plans subject to Section 4975 of the Code (also "Plans"), from, among other things,
engaging in certain transactions involving "plan assets" with persons who are "parties in interest" under ERISA
or "disqualified persons" under the Code with respect to such Plan. A violation of these "prohibited
transaction" rules may result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Codefor such persons, unless exemptive relief is available under an applicable statutory or administrative exemption.
Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA), certain church plans(as defined in Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(5) of ERISA) are notsubject to the requirements of ERISA or Section 4975 of the Code.
The Department of Labor ("DOL") has issued a regulation (29 C.F.R. § 2510.3-101) (the "Plan Assets
Regulation") concerning the definition of what constitutes the assets of a Plan. The Plan Assets Regulation
provides that as a general rule, the underlying assets and properties of corporations, partnerships, trusts andcertain other entities in which a plan makes an "equity" investment will be deemed for purposes of ERISA to
be assets of the investing plan unless certain exceptions apply.
Pursuant to an exception contained in the Plan Assets Regulation, the assets of the Trust would not be
deemed to be "plan assets" of investing Plans if, immediately after the most recent acquisition of any equity
interest in the Trust, less than 25% of the value of each class of equity interest in the Trust were held by Plans,
other employee benefit plans not subject to ERISA or Section 4975 of the Code (such as governmental, church
and foreign plans) and entities holding assets deemed to be "plan assets" of any Plan (collectively, "Benefit
Plan Investors"). No assurance can be given that the value of the Capital Securities held by Benefit Plan
Investors will be less than 25% of the total value of such Capital Securities at the completion of the initialoffering or thereafter, and no monitoring or other measures will be taken with respect to the satisfaction of theconditions to this exception. All of the Common Securities will be purchased and held directly by the Company.
There can be no assurance that any of the exceptions set forth in the Plan Assets Regulation will apply tothe purchase of Capital Securities offered hereby and, as a result, an investing Plan's assets could be considered
to include an undivided interest in the Junior Subordinated Debentures held by the Trust. In the event that assetsof the Trust are considered assets of an investing Plan, the Trustees, the Company and other persons, in providing
services with respect to the Junior Subordinated Debentures, may be considered fiduciaries to such Plan andsubject to the fiduciary responsibility provisions of Title I of ERISA. In addition, certain transactions involving
the Trust and/or the Capital Securities could be deemed to constitute direct or indirect prohibited transactions
under ERISA and Section 4975 of the Code with respect to a Plan. For example, if the Company is a Party inInterest with respect to an investing Plan (either directly or by reason of its ownership of the Banks or othersubsidiaries), extensions of credit between the Company and the Trust (as represented by the Junior SubordinatedDebentures and the Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and Section
4975(c)(1)(B) of the Code.
The DOL has issued five prohibited transaction class exemptions ("PTCEs") that may provide exemptive
relief for direct or indirect prohibited transactions resulting from the purchase or holding of the Capital Securities,
assuming that assets of the Trust were deemed to be "plan assets" of Plans investing in the Trust (see above).
Those class exemptions are PTCE 96-23 (for certain transactions determined by in-house asset managers), PTCE
91-38 (for certain transactions involving bank collective investment funds), PTCE 95-60 (for certain transactions
involving PTCE 90-1 (for certain transactions involving insurance company pooled separate accounts) and PTCE
84-14 (for certain transactions determined by independent qualified professional asset managers).
55

Because of ERISA's prohibitions and those of Section 4975 of the Code, the Capital Securities may not bepurchased or held by any Plan, any entity whose underlying assets include "plan assets" by reason of any Plan'sinvestment in the entity (a "Plan Asset Entity") or any person having "plan assets" of any Plan, unless such
purchase or holding is covered by the exemptive relief provided by PTCE 95-23, 95-60, 91-38, 90-1 or 84-14 oranother applicable exemption. If a purchaser or holder of the Capital Securities that is a Plan or a Plan Asset
Entity elects to rely on an exemption other than PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, the Company and theTrust may require a satisfactory opinion of counsel or other evidence with respect to the availability of such
exemption for such purchase and holding. Any purchaser or holder of the Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof that either (a) the purchaser andholder is not a Plan or a Plan Asset Entity and is not purchasing such securities on behalf of or with "planassets" of any Plan or (b) the purchase and holding of the Capital Securities is covered by the exemptive relief
provided by PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or another applicable exemption. See "Notice toInvestors" herein.
Any Plans or other entities whose assets include Plan assets subject to ERISA or Section 4975 of the Codeproposing to acquire Capital Securities should consult with their own counsel.
Governmental Plans, as defined in Section 3(32) of ERISA, are not subject to ERISA, and are also not
subject to the prohibited transaction provisions of Section 4975 of the Code. However, state laws or regulations
governing the investment and management of the assets of such plans may contain fiduciary and prohibited
transaction provisions similar to those under ERISA and the Code discussed above. Accordingly, fiduciaries ofgovernment plans, in consultation with their advisers, should consider the impact of their respective state laws
on investments in the Capital Securities, and the considerations discussed above, to the extent applicable.

SUPERVISION, REGULATION AND OTHER MATTERS
The following information is not intended to be an exhaustive description of the statutes and regulations
applicable to the Company or the Holding Corporation. The discussion is qualified in its entirety by reference toall particular statutory or regulatory provisions. Additional information regarding supervision and regulation is
included in the documents incorporated herein by reference. See "Incorporation of Certain Information by
Reference."
The business of the Company is influenced by prevailing economic conditions and governmental policies,
both foreign and domestic. The actions and policy directives of the Federal Reserve determine to a significant
degree the cost and the availability of funds obtained from money market sources for lending and investing. The
Federal Reserve's policies and regulations also influence, directly and indirectly, the rates of interest paid bycommercial banks on their time and savings deposits. The nature and impact on the Company of future changes
in economic conditions and monetary and fiscal policies, both foreign and domestic, are not predictable.
The Company is subject to supervision and examination by federal bank regulatory authorities. The
Company's primary bank regulatory authority is the OCC.
The federal banking regulatory authorities have each adopted risk-based capital guidelines to which theCompany is subject. These guidelines are based on an international agreement developed by the Basle Committeeon Banking Regulations and Supervisory Practices, which consists of representatives of central banks andsupervisory authorities in 12 countries including the United States. The guidelines establish a systematic
analytical framework that makes regulatory capital requirements more sensitive to differences in risk profiles
among banking organizations, takes off-balance sheet exposures into explicit account in assessing capital
adequacy and minimizes disincentives to holding liquid, low-risk assets. Risk-based assets are determined byallocating assets and specified off-balance sheet commitments and exposures into four weighing categories, withhigher levels of capital being required for the categories perceived as representing greater risk.
56

All banks are required to maintain a minimum total risk-based ratio of 8%, of which half (4%) must be"Tier 1" capital. In addition, the federal bank regulators have established leverage ratio (Tier 1 capital to total
adjusted average assets) guidelines providing for a minimum leverage ratio of 3% for banks meeting certain
specified criteria, including excellent asset quality, high liquidity, low interest rate exposure and the highest
regulatory rating or which are not experiencing or anticipating significant growth. Institutions not meeting thesecriteria are expected to maintain a ratio which exceeds the 3% minimum by at least 100 to 200 basis points. The
federal bank regulatory authorities may, however, set higher capital requirements when a bank's particular
circumstances warrant. As of September 30, 1996, the Company's total risk-based capital ratio was 10.6%, ofwhich 8.04% constituted Tier 1 capital. The Company's leverage ratio at such date was 6.97%, These ratios havebeen restated to include New Jersey National which was merged into the Company on December 6, 1996.
Effective January 17, 1995, the federal bank regulatory agencies, including the FDIC, the Federal Reserve
Board and the OCC, amended their respective agency risk-based capital standards to include concentration of
credit risk and the risks of non-traditional activities. The Federal Reserve Board, the OCC and the FDIC also
issued a joint policy statement, effective June 26, 1996, that provides guidance on sound practices for interest
rate risk management. The policy describes critical factors affecting the agencies' evaluation of a bank's interest
rate risk when making a determination of capital adequacy.
The federal banking agencies possess broad powers to take corrective action as deemed appropriate for an
insured depository institution and its holding companies. The extent of these powers depends upon whether the
institution in question is considered "well capitalized," "adequately capitalized," "undercapitalized,""significantly undercapitalized" or "critically undercapitalized." Generally, as an institution is deemed to beless well capitalized, the scope and severity of the agencies' powers increase. The agencies' corrective powers
can include, among other things, requiring an insured financial institution to adopt a capital restoration plan
which cannot be approved unless guaranteed by the institution's parent holding company; placing limits on asset
growth and restrictions on activities; placing restrictions on transactions with affiliates; restricting the interest
rates the institution may pay on deposits; prohibiting the institution from accepting deposits from correspondentbanks; prohibiting the payment of principal or interest on subordinated debt; prohibiting the holding company
from making capital distributions without prior regulatory approval; and, ultimately, appointing a receiver for
the institution. Business activities may also be influenced by an institution's capital classification. For instance,
only a "well capitalized" depository institution may accept brokered deposits without prior regulatory approvaland only an "adequately capitalized" depository institution may accept brokered deposits with prior regulatory
approval. At September 30, 1996, the Company exceeded the required minimum ratios for classification as "wellcapitalized."Powers of the FDIC in Connection with the Insolvency of an Insured Depository Institution
A depository institution insured by the FDIC can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC in connection with (i) the default of a commonly-controlled FDIC-insured
depository institution or (ii) any assistance provided by the FDIC to a commonly-controlled FDIC-insured
depository institution in danger of default. "Default" is generally defined as the appointment of a receiver orconservator and "in danger of default" is defined generally as the existence of certain conditions indicating thata "default" is likely to occur in the absence of regulatory assistance. Such liability by a depository institution to
the FDIC would be subordinated in right of payment to deposit liabilities, secured obligations, any other generalor senior liability and any obligation subordinated to obligations to depositors or other general creditors (such as
the Junior Subordinated Debentures), other than obligations owed to any affiliate of the depository institution(with certain exceptions) and obligations to shareholders of such depository institution in their capacity as such.
If the FDIC is appointed conservator or receiver for an insured depository institution, the FDIC may
disaffirm or repudiate any contract or lease to which such institution is a party, the performance of which isdetermined by the FDIC to be burdensome and the disaffirmance or repudiation of which is determined by the
FDIC to promote the orderly administration of the institution's affairs. If the FDIC were to repudiate the Junior
Subordinated Debentures, the effect of such repudiation would be to accelerate the maturity of such securities.
57

To the Company's knowledge, the FDIC has not taken the position that such repudiation would impair the rightof a holder of such securities to make a claim for principal and interest accrued through the date of theappointment of the conservator or receiver. The amount paid upon this claim would depend upon, among otherfactors, the amount of receivership assets available for the payment of unsecured claims and the priority of thisclaim relative to the priority of other unsecured creditors. If the maturity of the Junior Subordinated Debentures
were so accelerated and a claim relating to the Junior Subordinated Debentures were paid by the conservatorshipor receivership, depending upon economic conditions, the holders of such Junior Subordinated Debentures might
not be able to reinvest any amounts paid on such securities at a comparable rate of interest. In addition, although
the terms of the Junior Subordinated Debentures permit the holders to accelerate the maturity of such securities
in the event of the appointment of a receiver or conservator for the Company, the FDIC as receiver or conservator
may enforce most types of contracts, including the Junior Subordinated Debentures, pursuant to their terms,
notwithstanding any such acceleration provision. The FDIC as conservator or receiver may also transfer to a new
obligor any of the Company's assets and liabilities, including the Junior Subordinated Debentures, without theapproval or consent of the Company's creditors, including holders of the Junior Subordinated Debentures.
Pursuant to federal law, the FDIC may not take any action that would have the effect of increasing the losses
to a deposit insurance fund by protecting depositors for more than the insured portion of their deposits, or
creditors other than depositors (such as holders of the Junior Subordinated Debentures). The FDIC is also
authorized to settle all uninsured and unsecured claims in the insolvency of an insured depository institution bymaking a final settlement payment after the declaration of insolvency. The rate of such final settlement is to be apercentage rate determined by the FDIC reflecting an average of the FDIC's receivership recovery experience.
Such a payment would constitute full payment and disposition of the FDIC's obligations to claimants, regardlessof the assets of the insolvent institution actually available for distribution to creditors.
Federal law also provides that in the event of the liquidation or other resolution of an insured depository
institution, administrative expenses of the receiver and the claims of depositors of such institution (including
claims by the FDIC as subrogee of insured depositors) are entitled to priority in payment over the claims ofother general creditors of the institution.
The Bank Holding Company Act of 1956, as amended, currently permits adequately capitalized andadequately managed bank holding companies from any state to acquire banks and bank holding companies
located in any other state, subject to certain conditions. States may affirmatively opt-in earlier, which Delaware,
New Jersey and Pennsylvania (among other states) have done. Competition may increase as banks branch acrossstate lines and enter new markets.

58

PLAN OF DISTRIBUTION
The Company and the Trust have entered into an agreement (the "Purchase Agreement") with the initialpurchasers named below (the "Initial Purchasers") pursuant to which, on the terms and subject to the conditions
thereof, the Trust and the Company have agreed that the Trust will sell to the Initial Purchasers, and the Initial
Purchasers have agreed to purchase, the liquidation amount of Capital Securities set forth opposite their names
below:

Initial Purchasers

Lehman Brothers International (Europe)
Bear, Stearns International Limited
J.P. Morgan Securities Ltd
Salomon Brothers International Limited
Deutsche Bank AG London
UBS Limited

Liquidation
Amount of
CapitalSecurities$100,750,000
10,000,000
10,000,000
10,000,000
5,000,000
5,000,000

Total$140,750,000

In addition, the Company through CoreStates Capital Markets (which is not an Initial Purchaser for purposesof the Purchase Agreement) will directly offer for placement with QIBs and institutional investors that are
accredited investors within the meaning of Rule 501 (a)(1), (2), (3), or (7) of Regulation D under the Securities
Act, $9,250,000 aggregate liquidation amount of Capital Securities, subject to the limitations and conditions set
forth under "Notice to Investors."
The Purchase Agreement provides that the obligations of the Initial Purchasers to pay for and accept
delivery of the Capital Securities are subject to the approval of certain legal matters by their counsel and tocertain other conditions. The Initial Purchasers are obligated to take and pay for $140,750,000 aggregateliquidation amount of the Capital Securities offered hereby if any are taken.
In the Purchase Agreement, the Company and the Trust have agreed to indemnify the Initial Purchasers
against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Initial
Purchasers may be required to make in respect thereof.
The Initial Purchasers have agreed that they will offer or sell the Capital Securities at 97.988% of theliquidation amount, outside the United States only in offshore transactions complying with Rule 903 or Rule 904
of Regulation S under the Securities Act, and inside the United States through their respective United States
affiliates who are broker-dealers registered as such under the Exchange Act, as selling agents, only (i) to persons
whom they reasonably believe to be qualified institutional buyers in reliance on Rule 144A under the Securities
Act and (ii) to a limited number of institutional accredited investors within the meaning of Rule 501(a)(1), (2),(3) or (7) of Regulation D under the Securities Act.
In view of the fact that the proceeds from the sale of the Capital Securities will be used to purchase the
Junior Subordinated Debentures issued by the Company, the Purchase Agreement provides that the Company
will pay as compensation for the Initial Purchasers' arranging the investment therein of such proceeds an amountof $8.75 per Capital Security for the accounts of the Initial Purchasers.
The Company and the Trust have agreed with the Initial Purchasers, not to offer, sell, contract to sell, grant
any other option to purchase or otherwise dispose of, directly or indirectly, (i) any trust certificates or othersecurities of the Trust (other than the Common Securities to the Company and the Capital Securities to the Initial
Purchasers and $9,250,000 aggregate liquidation amount of Capital Securities through CoreStates Capital
59Markets as agent for the Company as described above), (ii) any securities substantially similar to the Capital
Securities or (iii) any other securities which are convertible into, or exercisable or exchangeable for, any of (i)and (ii), or enter into any agreement, or announce the intention, to do any of the foregoing, for a period of 30days from the date of issuance of the Capital Securities without the prior written consent of Lehman Brothers
International (Europe).
The Initial Purchasers have acknowledged and agreed that, except as permitted by the Purchase Agreement,
they will not offer, sell or deliver the Capital Securities within the United States or to, or for the account or
benefit of, U.S. Persons (i) as part of the distribution at any time or (ii) otherwise until 40 days after the later ofthe commencement of the offering and the Closing Date, that they will send to each dealer to which they sellCapital Securities in reliance on Regulation S during the restricted period a confirmation or other notice setting
forth the restrictions on offers and sales of the Capital Securities within the U.S. or to, or for the account or
benefit of, U.S. Persons. Terms used in this paragraph have the meaning given to them by Regulation S under
the Securities Act.
The Offered Securities have not been registered under the Securities Act or Part 16 of the regulations of the
OCC and may not be offered or sold within the United States except in certain transactions exempt from, or not
subject to, the registration requirements of the Securities Act and Part 16 of the regulations of the OCC. See"Notice to Investors."
The Company and the Trust have been advised by the Initial Purchasers that they intend to make a market
in the Capital Securities as permitted by applicable laws and regulations. The Initial Purchasers are not obligated,
however, to make a market in the Capital Securities and any such market making may be discontinued at any
time at the sole discretion of the Initial Purchasers. Accordingly, no assurance can be given as to the liquidity of,or trading markets for, the Capital Securities.
The Initial Purchasers and certain of their affiliates from time to time each perform investment banking andother financial advisory services for the Company and its affiliates for which they receive customarycompensation.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Trust Securities and the formation of theTrust will be passed upon on behalf of the Trust by Richards, Layton & Finger P.A., special Delaware counsel
to the Company and the Trust. The validity under New York law of the Junior Subordinated Debentures and the
Guarantee will be passed upon for the Company and me Trust by Simpson Thacher & Bartlett, (a partnershipwhich includes professional corporations), New York, New York, Certain United States federal income tax
matters will be passed upon for the Company and the Trust by Simpson Thacher & Bartlett. Certain legal matterswill be passed upon for the Initial Purchasers by Cleary, Gottlieb, Steen & Hamilton, New York, New York.

INDEPENDENT AUDITORS
The consolidated financial statements of the Holding Corporation and its affiliates incorporated by referencein this Offering Memorandum, have been audited by Ernst & Young LLP, independent auditors, as stated intheir report. The Company's Call Reports incorporated by reference in this Offering Memorandum are unaudited.

60

APPENDIX A
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTERCoreStates Capital II
CoreStates Bank, N.A.
[Selling Agent][Address]
Dear Sirs:
In connection with our proposed purchase from you of Floating Rate Subordinated Capital Income
Securities (the "Restricted Securities") of CoreStates Capital II, a Delaware statutory business trust (the"Trust"), which Trust's common securities are owned by CoreStates Bank, N.A. (the "Company"), we
represent, warrant and agree on our own behalf and on behalf of any investor account (as hereinafter defined) for
which we are purchasing the Restricted Securities as follows:
1. We are an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)under the Securities Act (an "Institutional Accredited Investor") that is purchasing Restricted Securities
with a principal amount of at least $100,000, and if the Restricted Securities are to be purchased for one ormore accounts ("investor accounts") for which we are acting as fiduciary or agent, each such account is an
Institutional Accredited Investor that is purchasing Restricted Securities with a principal amount of at least$100,000. In the normal course of our business, we invest in or purchase securities similar to the Restricted
Securities and we have such knowledge and experience in financial business matters as to be capable ofevaluating the merits and risks of purchasing the Restricted Securities. We are aware that we (or any
investor account) may be required to bear the economic risk of an investment in the Restricted Securities
for an indefinite period of time and we are (or such account is) able to bear such risk for an indefinite period.
2. We acknowledge that none of the Company, CoreStates Capital Markets, the Trust or the Initial
Purchasers (as defined in the Offering Memorandum), or any person representing the Company, CoreStates
Capital Markets, the Trust or the Initial Purchasers, has made any representation to us with respect to theCompany, the Trust or the offering of the Restricted Securities, other than the Offering Memorandum dated
January 16, 1997 (the "Offering Memorandum"), a copy of which has been delivered to us and upon which
we are relying in making our investment decision with respect to the Restricted Securities. Accordingly, we
acknowledge that no representation or warranty is made by the Initial Purchasers as to the accuracy orcompleteness of such materials. We have had access to such financial and other information concerning theCompany and the Restricted Securities as we deemed necessary in connection with our decision to purchase
the Restricted Securities, including an opportunity to ask questions and request information from theCompany and the Initial Purchasers. We acknowledge that we have read and agreed to the matters statedunder the caption "Notice to Investors" in such Offering Memorandum and the restrictions on duplicationand circulation of such Offering Memorandum.
3. We understand that any subsequent transfer of the Restricted Securities is subject to certain
restrictions and conditions set forth in the Offering Memorandum under the caption "Notice to Investors"
and we agree to be bound by, and not to resell, pledge or otherwise transfer the Restricted Securities except
in compliance with such restrictions and conditions and the Securities Act of 1933, as amended (the"Securities Act") and Part 16 of the regulations of the Office of the Comptroller of the Currency (the"OCC").
4. We understand and hereby acknowledge that the Restricted Securities have not been registeredunder the Securities Act or Part 16 of the regulations of the OCC, and may not be sold except as permitted
in the following sentence. We agree to offer, sell or otherwise transfer such Restricted Securities prior to
the date which is three years after the later of the date of original issue and the last date on which the
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Company or any affiliate of the Company was the owner of such Restricted Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company, (b) pursuant to a registration
statement which has been declared effective under the Securities Act and Part 16 of the regulations of the
OCC, (c) for so long as the Restricted Securities are eligible for resale pursuant to Rule 144A under the
Securities Act, to a person we reasonable believe is qualified institutional buyer under Rule 144A ("QIB")
that purchases for its own account or for the account of a QIB to whom notice is given that the transfer isbeing made in reliance on Rule 144A, (d) outside the United States in a transaction meeting therequirements of Rule 904 of Regulation S under the Securities Act, (e) to an Institutional "accredited
investor," with the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act thatis acquiring the securities for its own account or for the account of such an institutional "accredited
investor," for investment purposes and not with a view to, or for offer or sale in connection with, anddistribution in violation of the Securities Act or Part 16 of the regulations of the OCC or (f) pursuant to any
other available exemption from the registration requirements of the Securities Act and Part 16 of theregulations of the OCC, and, in each case, in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and subject to any requirement of law that thedisposition of our property or the property of such investor account or accounts be at all times within our or
their control. The foregoing restriction on resale will not apply subsequent to the Resale Restriction
Termination Date. We acknowledge that the Company and the Property Trustee reserve the right prior toany offer, sale or other transfer prior to the Resale Restriction Termination Date of the Restricted Securities
pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications orother information acceptable to the Company and the Property Trustee in form and substance. We
acknowledge that the Restricted Securities purchased by us will be in the form of definitive physicalcertificates and will bear a legend reflecting the substance of this paragraph 4.
5. Prior to any proposed transfer of the Restricted Securities (other than pursuant to an effective
registration statement) occurring before the Resale Restriction Termination Date, we must check theappropriate box set forth on the reverse of the certificate(s) evidencing such Restricted Securities relating to
the manner of such transfer and submit such certificate(s) to the Property Trustee. We understand that theProperty Trustee will not be required to accept any Restricted Securities for registration of transfer, except
upon presentation of evidence satisfactory to the Company and to the Property Trustee that the foregoing
restrictions on transfer have been complied with.
6. We are acquiring the Restricted Securities for our own account or for one or more accounts (eachof which is an "institutional accredited investor") as to each of which we exercise sole investment
discretion.
7. We are not acquiring the Restricted Securities with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act or Part 16 of the regulations of the OCC.
8. We shall provide to any person purchasing any Restricted Securities from us a notice advising such
purchaser that transfers of the Restricted Securities are restricted as set forth herein.
9. We understand and acknowledge that our purchase of any Capital Security constitutes a
representation by us that we either (a) are not a Plan or a Plan Asset Entity and are not purchasing such
Capital Securities on behalf of or with "plan assets" of any Plan or (b) are eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 with respect to such purchase. Capitalized terms
used in this representation have the meanings therefor set out under the caption "Benefit Plan
Considerations" in the Offering Memorandum.

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We acknowledge that you and others will rely upon our confirmations, acknowledgments and agreements
set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties hereinceases to be accurate and complete. You are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered
hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT APPLICATION OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY.

Very truly yours,(Name of Purchaser)
By:
Name:
Title:
Address:

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PRINCIPAL EXECUTIVE OFFICE OF CORESTATES BANK, N.A.
CoreStates Bank, N.A.
Centre Square, West Tower
1500 Market Street
Philadelphia, PA 19101

PROPERTY TRUSTEEThe Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

PAYING AGENTS AND TRANSFER AGENTS
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

Chase Manhattan Bank Luxembourg, S.A.
5, Rue Plaetia
L-2338, Luxembourg

LEGAL ADVISORS
To the Company and the Trust as to U.S. law
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017

To the Initial Purchasers as to U.S. law
Cleary, Gottlieb, Steen & Hamilton
One Liberty PlazaNew York, New York 10006

To the Company and the Trust as to Delaware law
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899

INDEPENDENT AUDITORS FOR CORESTATES FINANCIAL CORP
Ernst & Young LLP
2001 Market Street
Two Commerce Square
Philadelphia, Pennsylvania 19103

LISTING AGENT
Kredietbank S.A.
Luxembourgeoise 43
Boulevard Royal
L-2955 Luxembourg