<PAGE>


                                                                    Exhibit 4.27

--------------------------------------------------------------------------------



                          FIRST SUPPLEMENTAL INDENTURE

                          dated as of January 21, 2003

                                       to

                          JUNIOR SUBORDINATED INDENTURE

                          dated as of December 15, 1996

                                     between

                            STATE STREET CORPORATION
                                    as Issuer

                                       and

                          BANK ONE TRUST COMPANY, N.A.
                              as Indenture Trustee


                            FlOATING RATE MEDIUM TERM

              JUNIOR SUBORDINATED DEBENTURES DUE FEBRUARY 15, 2008

 -------------------------------------------------------------------------------

<PAGE>

                          FIRST SUPPLEMENTAL INDENTURE

     This FIRST SUPPLEMENTAL INDENTURE, dated as of January 21, 2003 (the "First
Supplemental Indenture"), to the Indenture, dated as of December 15, 1996, is
made between STATE STREET CORPORATION, a Massachusetts corporation (the
"Corporation"), and BANK ONE TRUST COMPANY, N.A. (as successor in interest to
The First National Bank of Chicago), a national banking association (the
"Trustee"). All capitalized terms used in this First Supplemental Indenture and
not otherwise defined herein have the meanings given such terms in the Original
Indenture (as defined below).

                              W I T N E S S E T H :

     WHEREAS, the Corporation and the Trustee entered into an indenture, dated
as of December 15, 1996 (the "Original Indenture"), pursuant to which one or
more series of unsecured junior subordinated debt securities of the Corporation
(the "Securities") may be issued from time to time; and

     WHEREAS, Section 3.1 of the Original Indenture permits the terms of any
Securities to be established in a supplemental indenture to the Original
Indenture; and

     WHEREAS, Section 9.1 of the Original Indenture provides that a supplemental
indenture may be entered into by the Corporation and Trustee, without the
consent of any Holders of Securities, to establish the form and terms of the
Securities of any series and to change any of the provisions of the Original
Indenture, provided that such change does not apply to any Outstanding
Securities; and

     WHEREAS, the Corporation has requested the Trustee to join with it in the
execution and delivery of this First Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things, establishing
the form and terms of one series of Securities to be known as the Corporation's
"Floating Rate Medium Term Junior Subordinated Debentures" (the "Debentures")
and amending certain provisions thereof; and

     WHEREAS, State Street Capital Trust II, a Delaware statutory trust (the
"Trust"), intends to offer to the public $345,000,000 aggregate liquidation
amount of its Floating Rate Medium Term Capital Securities, representing an
undivided beneficial interest in the assets of the Trust (the "Medium Term
Capital Securities"), and proposes to invest the proceeds from such offering,
together with the proceeds of the sale of $10,670,000 aggregate liquidation
amount of the Trust's common securities to the Corporation, in up to
$355,670,000 aggregate principal amount of the Debentures; and

     WHEREAS, concurrently with the offering of the Medium Term Capital
Securities, the Corporation intends to offer to the public $345,000,000
aggregate liquidation amount of its SPACES, which are equity security units (the
"SPACES"); and

<PAGE>

     WHEREAS, the Corporation and the Trustee desire to enter into this First
Supplemental Indenture for the purposes set forth in Sections 3.1 and 9.1 of the
Original Indenture as referred to above; and

     WHEREAS, all necessary actions to make this First Supplemental Indenture a
valid agreement of the Corporation and the Trustee and a valid supplement to the
Original Indenture have been duly taken,

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties to this First
Supplemental Indenture mutually covenant and agree as follows:

                                   ARTICLE I.

                       Designation and Terms of Debentures

     1.1 Establishment of Series. There is hereby created a series of Securities
to be known and designated as the Floating Rate Medium Term Junior Subordinated
Debentures, to be in substantially the form and with the terms set forth in
Exhibit A attached hereto, subject to changes in the form thereof made by the
Corporation and acceptable to the Trustee, and which shall be subordinated and
junior to all Senior Indebtedness of the Corporation. For purposes of the
Original Indenture, the Debentures shall constitute a single series of
Securities.

     1.2 Limit on Aggregate Principal Amount. The aggregate principal amount of
Debentures that may be issued under this First Supplemental Indenture is limited
to $355,670,000.

     1.3 Maturity. The Stated Maturity for the payment of principal of the
Debentures is February 15, 2008.

     1.4 Interest. The Debentures will bear interest, accruing from the date of
initial issuance, at a variable annual rate equal to 3-Month LIBOR, determined
as described below, plus 0.50% (the "Interest Rate") of the principal amount
thereof, payable quarterly (subject to deferral as set forth in Exhibit A
attached hereto) in arrears on February 15, May 15, August 15 and November 15 of
each year (each, an "Interest Payment Date"), commencing May 15, 2003. "3-Month
LIBOR" means the London interbank offered rate for three-month, U.S. dollar
deposits and, with respect to any period of time beginning on any Interest
Payment Date (or the date of issuance of the Debentures, in the case of the
first Interest Period) and ending on the day immediately preceding the next
succeeding Interest Payment Date (an "Interest Period"), will be calculated by
Bank One Trust Company, N.A., as calculation agent (the "Calculation Agent"), as
follows:

               (a)  On the second Market Day (as defined below) preceding the
                    commencement of such Interest Period (each, a "Determination
                    Date"), 3-Month LIBOR will be determined on the basis of the
                    offered rate for deposits of not less than U.S. $1,000,000
                    for a period of three months (the "Index Maturity"),
                    commencing on the second Market Day immediately

                                       -2-

<PAGE>

                    preceding the commencement of such Interest Period, which
                    appears on the display designated as Page 3750 on the Dow
                    Jones Telerate Service (or such other pages as may replace
                    Page 3750 on that service for the purpose of displaying
                    London interbank offered rates of major banks) ("Telerate
                    Page 3750") as of 11:00 a.m., London time on said
                    Determination Date. If no such offered rate appears, 3-Month
                    LIBOR with respect to such Interest Period will be
                    determined as described in (b) below;

               (b)  With respect to a Determination Date on which no such
                    offered rate appears on Telerate Page 3750 as described in
                    (a) above, 3-Month LIBOR shall be the arithmetic mean,
                    expressed as a percentage, of the offered rates (unless by
                    its terms such display provides for only a single rate, in
                    which case a single rate shall be used) for deposits in U.S.
                    dollars for the Index Maturity that appears on the display
                    designated as "LIBO" on the Reuters Monitor Money Market
                    Rates Service (or such other page as may replace the LIBO
                    page on that service for the purpose of displaying London
                    interbank offered rates of major banks) ("Reuters Screen
                    LIBO Page") as of 11:00 a.m., London time, on such date. If,
                    in turn, at least two such rates are not displayed on the
                    Reuters Screen LIBO Page at such time (unless, as aforesaid,
                    only a single rate is required), the Calculation Agent will
                    obtain from each of four reference banks in London selected
                    by the Calculation Agent ("Reference Banks") such bank's
                    offered quotation (expressed as a percentage per annum) as
                    of approximately 11:00 a.m., London time, on such date for
                    deposits in U.S. dollars to prime banks in the London
                    interbank market for the Index Maturity. If two or more such
                    quotations are provided as requested, then 3-Month LIBOR for
                    such date shall be the arithmetic average of such
                    quotations. If, in turn, fewer than two such quotations are
                    provided as requested, then 3-Month LIBOR for such date will
                    be obtained from the preceding Market Day for which the
                    Telerate Page 3750 displayed a rate for the Index Maturity;
                    and

               (c)  If on any Determination Date, the Calculation Agent is
                    required but unable to determine 3-Month LIBOR in the manner
                    provided in paragraphs (a) and (b) above, 3-Month LIBOR for
                    such Interest Period shall be 3-Month LIBOR as determined on
                    the previous Determination Date.

     The term "Market Day" means any Business Day on which commercial banks and
foreign exchange markets are open for business (including dealings in foreign
exchange and foreign currency deposits) in New York and London.

     The Interest Rate for any Interest Period will at no time be higher than
the maximum rate then permitted by New York law as the same may be modified by
United States law.

     All percentages resulting from any calculations referred to in the
Indenture will be rounded, if necessary, to the nearest one ten-thousandth of a
percentage point, with five hundred-thousandths of a percentage point being
rounded upwards (e.g., 6.87655% (or .0687655) would be rounded to 6.8766% (or
..068766)), and all U.S. dollar amounts used in or

                                      -3-

<PAGE>

resulting from such calculations will be rounded to the nearest cent (with
one-half cent or more being rounded upwards).

     The Calculation Agent shall, as soon as practicable after 11:00 a.m.,
London time, on each Determination Date, determine 3-Month LIBOR and inform the
Trustee. Unless otherwise provided by the Trustee, the Paying Agent will
calculate the amount of interest payable in respect of the following Interest
Period (the "Interest Amount"). The Interest Amount shall be calculated by
applying the Interest Rate to the principal amount of each Debenture outstanding
at the commencement of the Interest Period, multiplying each such principal
amount by the actual number of days in the Interest Period concerned (which
actual number of days shall include the first day but exclude the last day of
such Interest Period) divided by 360 and rounding the resulting figure to the
nearest cent (with one-half cent or more being rounded upwards). The
determination of the Interest Rate by the Calculation Agent and the Interest
Amount by the Paying Agent will (in the absence of willful default, bad faith or
manifest error) be final, conclusive and binding on all concerned. None of the
Trustee, the Paying Agent, the Calculation Agent, the Trust or the Corporation
(or any of their respective officers, directors, agents, beneficiaries,
employees or affiliates) shall have any liability to any Person for (i) the
selection of any Reference Bank or (ii) any inability to retain major banks in
the London interbank market, in the case of the Calculation Agent, which is
caused by circumstances beyond its reasonable control.

     Upon the request of a holder of a Debenture, the Calculation Agent will
provide the Interest Rate then in effect and, if determined, the Interest Rate
for the next Interest Period with respect to the Debentures. Each such Interest
Rate may be obtained by telephoning the Calculation Agent.

     Interest will include Additional Sums, if any, as provided in Section 10.6
of the Indenture until the principal hereof is paid or duly provided for or made
available for payment; provided that any overdue principal, premium or
Additional Sums and any overdue installment of interest shall bear Additional
Interest at the Interest Rate (to the extent that the payment of such interest
shall be legally enforceable), compounded quarterly, from the dates such amounts
are due until they are paid or made available for payment, and such interest
shall be payable on demand.

     In the event that any Interest Payment Date is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day, except that, if such Business Day is in the next
succeeding month, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment, which shall be the fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date, except as provided below. In the
event that the Debentures are in book-entry only form, the Regular Record Date
for each Interest Payment Date shall be the Business Day next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a

                                      -4-

<PAGE>

Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.

     1.5 Deferral of Interest Payments. The Corporation shall have the right,
pursuant to Section 3.12 of the Original Indenture, to defer the payment of
interest on the Debentures on the terms set forth in Exhibit A attached hereto.

     1.6 Fixed Early Redemption. On December 15, 2005 (the "Fixed Early
Redemption Date"), the Corporation shall redeem all outstanding Debentures, in
whole but not in part, provided that (i) the Corporation is "well-capitalized"
for purposes of the then applicable provisions of Regulation Y of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") and
otherwise complies with the then applicable provisions of the then applicable
capital adequacy guidelines of the Federal Reserve Board and (ii) the Federal
Reserve Board consents to such redemption.

     The Corporation shall make a good faith effort to determine whether it
meets the conditions set forth in clause (i) above based on the Corporation's
unaudited consolidated financial statements as of September 30, 2005. If the
Corporation determines that it has met such conditions, the Corporation shall
seek consent from the Federal Reserve Board to the redemption of the Debentures
on the Fixed Early Redemption Date. If the Federal Reserve Board consents to
such redemption, the Corporation (or, at the Corporation's request, the Trustee)
shall provide notice of such redemption to the Property Trustee under the
Amended and Restated Trust Agreement (as defined below) no later than
thirty-five (35) days and no earlier than sixty-five (65) days prior to the
Fixed Early Redemption Date. Any redemption on the Fixed Early Redemption Date
shall be at a Redemption Price equal to 100% of the principal amount of the
Debentures, together with accrued interest, including any Additional Interest,
to, but excluding, the Fixed Early Redemption Date.

     1.7 Special Event Redemption. Subject to the Corporation having received
prior approval of the Federal Reserve Board if then required under applicable
law, rules, guidelines or policies of the Federal Reserve Board, the Corporation
shall have the right to redeem the Debentures in whole, but not in part, subject
to the terms and conditions of Article XI of the Indenture, at any time within
90 days following the occurrence and during the continuation of a Tax Event,
Investment Company Event or Capital Treatment Event (or, if the approval of the
Federal Reserve Board is then required for such redemption, on such later date
as promptly as practicable after such approval is obtained), in either case,
upon not less than 30 nor more than 60 days' notice to the Holders and upon the
provision of notice of such redemption by the Corporation to the Property
Trustee under the Amended and Restated Trust Agreement no later than forty-five
(45) days prior to such redemption date, at a redemption price equal to 100% of
the principal amount of the Debentures, plus accrued interest, including any
Additional Interest, to the redemption date.

                                      -5-

<PAGE>

     1.8  Definition of Capital Treatment Event. Solely for purposes of the
Debentures, the definition of "Capital Treatment Event" in Section 1.1 of the
Original Indenture shall not apply, and the following definition shall instead
be applicable:

     "Capital Treatment Event" means the reasonable determination by the
     Corporation (as evidenced by an Officers' Certificate delivered to the
     Trustee) that, as a result of any amendment to, or change (including any
     proposed change) in, the laws (or any regulations thereunder) of the United
     States or any political subdivision 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 effective or which proposed change, pronouncement, action or
     decision is announced on or after the date of issuance of the Medium Term
     Capital Securities, there is more than an insubstantial risk that, taking
     into consideration the terms of the Medium Term Capital Securities and the
     terms of the SPACES, the Corporation will not be entitled to treat an
     amount equal to the aggregate Liquidation Amount (as such term is defined
     in the Amended and Restated Trust Agreement) of the Medium Term Capital
     Securities as "Tier 1 Capital" (or the then equivalent thereof) for
     purposes of the capital adequacy guidelines of the Board of Governors of
     the Federal Reserve System, as then in effect and applicable to the
     Corporation."

     1.9 State Street Capital Trust II. The forms of (a) the Amended and
Restated Trust Agreement of the Trust (the "Amended and Restated Trust
Agreement") among the Corporation, Bank One Trust Company, N.A., as Property
Trustee, Bank One Delaware, Inc., as Delaware Trustee, the Administrative
Trustees named therein and the holders of Trust Securities (as defined therein)
and (b) the Guarantee Agreement between the Corporation and Bank One Trust
Company, N.A., as Guarantee Trustee, relating to the Trust are attached hereto
as Exhibit B and Exhibit C, respectively.

     1.10 Global Securities. If the Debentures are distributed to holders of
Medium Term Capital Securities in connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust, the Debentures will be
issued in the form of one or more Global Securities registered in the name of
The Depository Trust Company ("DTC") or its nominee and will be subject to the
relevant provisions of the Indenture, including without limitation Section 3.5
thereof.

     1.11 Definition of Senior Indebtedness. Solely for purposes of the
Debentures, clauses (b), (e) and (f) of the definition of "Senior Indebtedness"
in Section 1.1 of the Original Indenture shall not apply, and the following
clauses (b) and (e) shall instead be applicable:

     "(b) any Debt of the Corporation to any of its Subsidiaries, other than
     Subsidiaries that are banks or bank holding companies as defined in the
     Bank Holding Company Act of 1956, as amended,"

     "(e) any Debt which by its terms is subordinated to trade accounts payable
     or accrued liabilities arising in the ordinary course of business to the
     extent that payments made to the holders of such Debt by the holders of the
     Debentures as a result of the subordination provisions of this Indenture
     would be greater than such payments otherwise would have

                                      -6-

<PAGE>

     been as a result of any obligation of such holders of such Debt to pay
     amounts over to the obligees on such trade accounts payable or accrued
     liabilities arising in the ordinary course of business as a result of
     subordination provisions to which such Debt is subject."

     1.12 Representations and Warranties. In connection with the issuance of the
Debentures, the Corporation hereby represents and warrants that as of the date
of this Supplemental Indenture, the Corporation is not obligated in respect of
any Debt for borrowed money from (i) any Subsidiary that is not a bank or bank
holding company as defined in the Bank Holding Company Act of 1956, as amended,
or (ii) any employee of the Corporation, except, in each case, (x) in respect of
Debt on which the Corporation shall defer payments of principal, interest and
premium to the same extent that the Corporation defers payments of interest on
the Debentures; or (y) in the ordinary course of business.

     1.13 Additional Covenants. Solely for purposes of the Debentures, the
following new Sections 10.9 and 10.10 of the Original Indenture shall be
applicable:

          "Section 10.9 Indebtedness to Certain Subsidiaries.

          Except in the ordinary course of business, the Corporation shall not
     incur Debt for borrowed money from any Subsidiary that is not a bank or
     bank holding company as defined in the Bank Holding Company Act of 1956, as
     amended, unless, pursuant to the terms of such Debt, the Corporation defers
     payments of principal, interest and premium, if any, in respect of such
     Debt to the same extent that the Corporation defers payments of interest on
     the Debentures.

          Section 10.10 Debt to Employees.

          Except in the ordinary course of business, the Corporation shall not
     incur Debt for borrowed money from any employee of the Corporation, unless,
     pursuant to the terms of such Debt, the Corporation defers payments of
     principal, interest and premium, if any, in respect of such Debt to the
     same extent that the Corporation defers payments of interest on the
     Debentures."

     1.14 Events of Default. Solely for purposes of the Debentures, clause (3)
of the definition of "Event of Default" set forth in Section 5.1 of the Original
Indenture shall be inapplicable.

                                   ARTICLE II.

                                  Miscellaneous

     2.1  Effect of Supplemental Indenture on Original Indenture. This First
Supplemental Indenture is a supplement to the Original Indenture. As
supplemented by this First Supplemental Indenture, the Original Indenture is in
all respects ratified, approved and confirmed, and the Original Indenture and
this First Supplemental Indenture shall together constitute one and the same
instrument.

                                       -7-

<PAGE>

     2.2 Effective Date. The modifications to the Original Indenture set forth
in this First Supplemental Indenture shall become effective on the date first
written above.

     2.3 Counterparts. This First Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

     2.4 Recitals. The recitals contained herein shall be taken as the
statements of the Corporation, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this First Supplemental Indenture.

     2.5 Governing Law. This First Supplemental Indenture shall be governed by
and construed in accordance with the laws of the jurisdiction that govern the
Original Indenture and its construction.

          The remainder of this page has been intentionally left blank.

                                      -8-

<PAGE>

     IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.

                                     STATE STREET CORPORATION




                                     By: /s/ Frederick P. Baughman
                                         -------------------------------------
                                         Name: Frederick P. Baughman
                                         Title: Senior Vice President,
                                                Controller & Chief Financial
                                                Officer




                                     BANK ONE TRUST COMPANY, N.A., as Trustee




                                     By: /s/ Melissa Wilman
                                         -------------------------------------
                                         Name: Melissa Wilman
                                         Title: Authorized Officer

<PAGE>

                                                                       EXHIBIT A

                                FORM OF DEBENTURE

<PAGE>

                                                                       EXHIBIT B

                               FORM OF AMENDED AND
                            RESTATED TRUST AGREEMENT

<PAGE>

                                                                       EXHIBIT C

                           FORM OF GUARANTEE AGREEMENT

<PAGE>

                            STATE STREET CORPORATION
             Floating Rate Medium Term Junior Subordinated Debenture

No. F-1                                                            $355,670,000

     STATE STREET CORPORATION, a corporation organized and existing under the
laws of The Commonwealth of Massachusetts (hereinafter called the "Corporation",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Bank One Trust
Company, N.A., as Property Trustee for State Street Capital Trust II, a
statutory trust formed under the laws of the State of Delaware, or registered
assigns, the principal sum of Three Hundred Fifty-Five Million Six Hundred
Seventy Thousand Dollars ($355,670,000) on February 15, 2008. The Corporation
further promises to pay interest on said principal sum from January 21, 2003 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on the 15th day of February, May, August and November of each year,
commencing May 15, 2003 (each, an "Interest Payment Date") at a variable annual
rate equal to 3-Month LIBOR, determined as described below, plus 0.50% (the
"Interest Rate"). "3-Month LIBOR" means the London interbank offered rate for
three-month, U.S. dollar deposits and, with respect to the period beginning on,
and including, the date of original issuance of this Security, and ending on,
but excluding, the first Interest Payment Date, and each successive period
beginning on, and including, any Interest Payment Date, and ending on, but
excluding, the next succeeding Interest Payment Date (each such period, an
"Interest Period"), will be calculated by Bank One Trust Company, N.A. as
calculation agent, as provided in the Indenture.

     Interest will include Additional Sums, if any, as provided in Section 10.6
of the Indenture until the principal hereof is paid or duly provided for or made
available for payment; provided that any overdue principal, premium or
Additional Sums and any overdue installment of interest shall bear Additional
Interest at the Interest Rate (to the extent that the payment of such interest
shall be legally enforceable), compounded quarterly, from the dates such amounts
are due until they are paid or made available for payment, and such interest
shall be payable on demand. The amount of interest payable for any period shall
be computed by applying the Interest Rate on the principal amount of this
Security outstanding at the commencement of the Interest Period, multiplying
each such principal amount by the actual number of days in the Interest Period
concerned (which actual number of days shall include the first day but exclude
the last day of such Interest Period) divided by 360 and rounding the resulting
figure to the nearest cent (with one-half cent or more being rounded upwards).
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
installment, which shall be the fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a

<PAGE>

Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.

     So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time during the term of this Security,
from time to time to defer the payment of interest on this Security for up to 20
consecutive quarterly interest payment periods with respect to each deferral
period (each an "Extension Period") at the end of which the Corporation shall
pay all interest then accrued and unpaid including any Additional Interest, as
provided below; provided, however, that no Extension Period shall extend beyond
the Stated Maturity of the principal of this Security and no such Extension
Period may end on a date other than an Interest Payment Date; and provided,
further, however, that during any such Extension Period, the Corporation shall
not (i) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu in all respects with or junior in interest to this Security, or (ii)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Corporation's capital
stock (other than (a) repurchases, redemptions or other acquisitions of shares
of capital stock of the Corporation 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, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Corporation (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a Subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) the purchase of fractional interests in shares of the
Corporation'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 Rights Plan, or the issuance of
rights, stock or other property under any 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
Corporation may further defer the payment of interest, provided that no
Extension Period shall exceed 20 consecutive quarterly interest payment periods,
extend beyond the Stated Maturity of the principal of this Security or end on a
date other than an Interest Payment Date. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Corporation may
elect to begin a new Extension Period, subject to the above conditions. No
interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension shall bear

<PAGE>

Additional Interest (to the extent that the payment of such interest shall be
legally enforceable) at the Interest Rate, compounded quarterly and calculated
as set forth in the first paragraph of this Security, from the dates on which
amounts would otherwise have been due and payable until paid or made available
for payment. The Corporation shall give the Holder of this Security and the
Trustee notice of its election to begin any Extension Period at least one
Business Day prior to the next succeeding Interest Payment Date on which
interest on this Security would be payable but for such deferral or, so long as
such Securities are held by State Street Capital Trust II (the "Issuer Trust"),
at least one Business Day prior to the earlier of (i) the next succeeding date
on which Distributions on the Capital Securities of such Issuer Trust would be
payable but for such deferral, and (ii) the date on which the Property Trustee
of such Issuer Trust is required to give notice to holders of such Capital
Securities of the record date or the date such Distributions are payable.

     Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Corporation maintained for
that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the
Corporation payment of interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Securities
Register, or (ii) by wire transfer in immediately available funds at such place
and to such account as may be designated by the Person entitled thereto as
specified by the Securities Register.

     The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided, and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.

Dated: January 21, 2003

[SEAL]                                  State Street Corporation



                                        By: ___________________________________
                                        Name:
                                        Title:

Attest:



___________________________

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

Dated: January 21, 2003

                                        Bank One Trust Company, N.A.,
                                        as Trustee



                                        By: ____________________________________
                                                    Authorized officer

<PAGE>

     This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of December 15,
1996, as supplemented by the First Supplemental Indenture, dated as of January
21, 2003 (as previously supplemented and amended, and as further amended or
supplemented, "Indenture"), between the Corporation and Bank One Trust Company,
N.A. (as successor in interest to The First National Bank Of Chicago), as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Corporation, the Trustee, the holders of Senior Indebtedness
and the Holders of the Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof, limited in aggregate principal amount to
$355,670,000.

     All terms used in this Security that are defined in the Indenture or in the
Amended and Restated Trust Agreement, dated as of January 21, 2003 (as modified,
amended or supplemented from time to time, the "Trust Agreement"), relating to
State Street Capital Trust II (the "Issuer Trust"), among the Corporation, as
Depositor, the Trustees named therein and the Holders from time to time of the
Trust Securities issued pursuant thereto, shall have the meanings assigned to
them in the Indenture or the Trust Agreement, as the case may be.

     On December 15, 2005 (the "Fixed Early Redemption Date"), the Company shall
redeem this Security, in whole but not in part, provided that (i) the Company is
"well-capitalized" for purposes of the then applicable provisions of Regulation
Y of the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") and otherwise complies with the then applicable provisions of the then
applicable capital adequacy guidelines of the Federal Reserve Board and (ii) the
Federal Reserve Board consents to such redemption.

     The Company shall make a good faith effort to determine whether it meets
the conditions set forth in clause (i) above based on the Company's unaudited
consolidated financial statements as of September 30, 2005. If the Company
determines that it has met such conditions, the Company shall seek consent from
the Federal Reserve Board to the redemption of the Securities on the Fixed Early
Redemption Date. If the Federal Reserve Board consents to such redemption, the
Company (or, at the Company's request, the Trustee) shall provide notice of such
redemption to the Property Trustee under the Amended and Restated Trust
Agreement no later than thirty-five (35) days prior to the Fixed Early
Redemption Date. Any redemption on the Fixed Early Redemption Date shall be at a
Redemption Price equal to 100% of the principal amount hereof, together with
accrued interest, including any Additional Interest, to, but excluding, the
Fixed Early Redemption Date.

     Subject to the Corporation having received prior approval of the Federal
Reserve Board if then required under applicable law, rules, guidelines or
policies of the Federal Reserve Board, the Corporation shall have the right to
redeem this Security in whole, but not in part, subject to the terms and
conditions of Article XI of the Indenture, at any time within 90 days following
the occurrence and during the continuation of a Tax Event, Investment Company
Event or Capital Treatment Event (or, if the approval of the Federal Reserve
Board is then required for such

<PAGE>

redemption, on such later date as promptly as practicable after such approval is
obtained), in either case, upon not less than 30 nor more than 60 days' notice,
at a redemption price equal to 100% of the principal amount hereof, plus accrued
interest, including any Additional Interest, to the redemption date.

     In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.

     The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Corporation with
certain conditions set forth in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the
Corporation and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Corporation and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Corporation with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

     As provided in and subject to the provisions of the Indenture, if an Event
of Default with respect to the Securities of this series at the time Outstanding
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
of this series may declare the principal amount of all the Securities of this
series to be due and payable immediately, by a notice in writing to the
Corporation (and to the Trustee if given by Holders), provided that, if upon an
Event of Default, the Trustee or such Holders fail to declare the principal of
all the Outstanding Securities of this series to be immediately due and payable,
the holders of at least 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding shall have the right to make such declaration by a
notice in writing to the Corporation and the Trustee; and upon any such
declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Corporation, which
is absolute and unconditional, to

<PAGE>

pay the principal of (and premium, if any) and interest (including any
Additional Interest) on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation maintained under Section 10.2 of the Indenture for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Corporation and the Securities Registrar
duly executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

     The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or
exchange, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.

     The Corporation and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.

     This Security shall be governed by and construed in accordance with the
laws of the State of New York.