<PAGE>
 
                                                                   EXHIBIT 10.21

================================================================================


                      INVESTORS FINANCIAL SERVICES CORP.

                        ______________________________



                        ______________________________


                                   INDENTURE

                         DATED AS OF JANUARY 31, 1997
                        ______________________________



                             THE BANK OF NEW YORK


                                  AS TRUSTEE


                        ______________________________


              JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES


================================================================================
<PAGE>
 
TIE-SHEET

     of provisions of Trust Indenture Act of 1939 with Indenture dated as of
January 31, 1997 between Investors Financial Services Corp. and The Bank of New
York, as Trustee:

<TABLE> 
<CAPTION> 
ACT SECTION                                                   INDENTURE SECTION
<S>                                                           <C>
310(a)(1).................................................................  6.09
   (a)(2).................................................................  6.09
310(a)(3).................................................................   N/A
   (a)(4).................................................................   N/A
310(a)(5)............................................................ 6.10, 6.11
310(b)....................................................................  6.08
310(c)....................................................................   N/A
311(a) and (b)............................................................  6.13
311(c)....................................................................   N/A
312(a)............................................................ 4.01, 4.02(a)
312(b) and (c)............................................................  4.02
313(a)....................................................................  4.04
313(b)(1).................................................................  4.04
313(b)(2).................................................................  4.04
313(c)....................................................................  4.04
313(d)....................................................................  4.04
314(a)............................................................... 3.05, 4.03
314(b)....................................................................   N/A
314(c)(1) and (2)....................................................6.07, 13.06
314(c)(3).................................................................   N/A
314(d)....................................................................   N/A
314(e)....................................................................  6.07
314(f)....................................................................   N/A
315(a),(c) and (d)........................................................  6.01
315(b)....................................................................  5.08
315(e)....................................................................  5.09
316(a)(1).................................................................  5.07
316(a)(2).................................................................   N/A
316(a) last sentence......................................................  2.09
316(b)....................................................................  9.02
317(a)............................................................... 5.02, 5.05
317(b)....................................................................  6.05
318(a).................................................................... 13.08
</TABLE> 
 
__________________________________
                                  
     THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
 
                              TABLE OF CONTENTS*



<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
     <S>                                                                    <C>
                                   ARTICLE I

                                  DEFINITIONS...............................   1

     SECTION 1.01. Definitions..............................................   1
     Additional Interest....................................................   1
     Adjusted Treasury Rate.................................................   2
     Adverse Tax Consequence................................................   2
     Affiliate..............................................................   2
     Authenticating Agent...................................................   2
     Bankruptcy Law.........................................................   2
     Board of Directors.....................................................   3
     Board Resolution.......................................................   3
     Business Day...........................................................   3
     Capital Securities.....................................................   3
     Capital Securities Guarantee...........................................   3
     Commission.............................................................   3
     Common Securities......................................................   3
     Common Securities Guarantee............................................   4
     Common Stock...........................................................   4
     Company................................................................   4
     Company Request........................................................   4
     Comparable Treasury Issue..............................................   4
     Comparable Treasury Price..............................................   4
     Compounded Interest....................................................   5
     Conditional Tax Redemption Event.......................................   5
     Custodian..............................................................   5
     Declaration............................................................   5
     Default................................................................   5
     Defeasance Agent.......................................................   5
     Deferred Interest......................................................   5
     Definitive Securities..................................................   5
     Depositary.............................................................   5
     Discharged.............................................................   5
     Dissolution Event......................................................   5
     Event of Default.......................................................   6
     Exchange Act...........................................................   6
     Exchange Offer.........................................................   6
     Extended Interest Payment Period.......................................   6
     Federal Reserve........................................................   6
     Global Security........................................................   6
     Indebtedness for Money Borrowed........................................   6
</TABLE>

____________________

     *  THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
        PART OF THE INDENTURE.

                                       i
<PAGE>
 
<TABLE>
     <S>                                                                      <C>
     Indebtedness Ranking Junior to the Securities..........................   6
     Indebtedness Ranking on a Parity with the Securities...................   7
     Indenture..............................................................   7
     Initial Optional Redemption Date.......................................   7
     Interest Payment Date..................................................   7
     Issue Date.............................................................   7
     Investors Capital Trust................................................   7
     Liquidated Damages.....................................................   7
     Maturity Date..........................................................   7
     Mortgage...............................................................   7
     Non Book-Entry Capital Securities......................................   7
     Officers...............................................................   7
     Officers' Certificate..................................................   8
     Opinion of Counsel.....................................................   8
     Optional Redemption Price..............................................   8
     Other Debentures.......................................................   8
     Other Guarantees.......................................................   8
     outstanding............................................................   8
     Person.................................................................   8
     Predecessor Security...................................................   9
     Principal Office of the Trustee........................................   9
     Purchase Agreement.....................................................   9
     Property Trustee.......................................................   9
     Quotation Agent........................................................   9
     Redemption Price.......................................................   9
     Reference Treasury Dealer..............................................   9
     Reference Treasury Dealer Quotations...................................   9
     Registration Rights Agreement..........................................   9
     Regulatory Capital Event...............................................  10
     Responsible Officer....................................................  10
     Restricted Security....................................................  10
     Rule 144A..............................................................  10
     Securities.............................................................  10
     Securities Act.........................................................  10
     Securityholder, holder of Securities...................................  10
     Security Register......................................................  10
     Security Registrar.....................................................  11
     Senior Indebtedness....................................................  11
     Series A Securities....................................................  11
     Series B Securities....................................................  11
     Special Event..........................................................  11
     Special Event Redemption Price.........................................  11
     Subsidiary.............................................................  11
     Tax Event..............................................................  12
     Trustee................................................................  12
     Trust Indenture Act of 1939............................................  12
     Trust Securities.......................................................  12
     U.S. Government Obligations............................................  12
</TABLE>

                                      ii
<PAGE>
 
<TABLE>
     <S>                                                                      <C>
                                  ARTICLE II

                                  SECURITIES................................  13

     SECTION 2.01.  Forms Generally.........................................  13
     SECTION 2.02.  Execution and Authentication............................  13
     SECTION 2.03.  Form and Payment........................................  14
     SECTION 2.04.  Legends.................................................  14
     SECTION 2.05.  Global Security.........................................  15
     SECTION 2.06   Interest................................................  16
     SECTION 2.07.  Transfer and Exchange...................................  17
     SECTION 2.08.  Replacement Securities..................................  20
     SECTION 2.09.  Treasury Securities.....................................  20
     SECTION 2.10.  Temporary Securities....................................  20
     SECTION 2.11.  Cancellation............................................  21
     SECTION 2.12.  Defaulted Interest......................................  21
     SECTION 2.13.  CUSIP Numbers...........................................  22

                                  ARTICLE III

                    PARTICULAR COVENANTS OF THE COMPANY.....................  23

     SECTION 3.01.  Payment of Principal, Premium and Interest..............  23
     SECTION 3.02.  Offices for Notices and Payments, etc...................  23
     SECTION 3.03.  Appointments to Fill Vacancies in Trustee's Office......  24
     SECTION 3.04.  Provision as to Paying Agent............................  24
     SECTION 3.05.  Certificate to Trustee..................................  25
     SECTION 3.06.  Compliance with Consolidation Provisions................  25
     SECTION 3.07.  Limitation on Dividends.................................  25
     SECTION 3.08.  Covenants as to Investors Capital Trust.................  26
     SECTION 3.09.  Payment of Expenses.....................................  27
     SECTION 3.10.  Payment Upon Resignation or Removal.....................  28

                                  ARTICLE IV

                   SECURITYHOLDERS' LISTS AND REPORTS BY THE
                          COMPANY AND THE TRUSTEE...........................  28

     SECTION 4.01.  Securityholders' Lists..................................  28
     SECTION 4.02.  Preservation and Disclosure of Lists....................  28
     SECTION 4.03.  Reports by Company......................................  30
     SECTION 4.04.  Reports by the Trustee..................................  31

                                   ARTICLE V

                  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                            ON EVENT OF DEFAULT.............................  32

     SECTION 5.01.  Events of Default.......................................  32
</TABLE>

                                      iii
<PAGE>
 
<TABLE>
     <S>                                                                      <C>
     SECTION 5.02.  Payment of Securities on Default; Suit Therefor.........  34
     SECTION 5.03.  Application of Moneys Collected by Trustee..............  36
     SECTION 5.04.  Proceedings by Securityholders..........................  37
     SECTION 5.05.  Proceedings by Trustee..................................  38
     SECTION 5.06.  Remedies Cumulative and Continuing......................  38
     SECTION 5.07.  Direction of Proceedings and Waiver of Defaults
                    by Majority of Securityholders..........................  39
     SECTION 5.08.  Notice of Defaults......................................  40
     SECTION 5.09.  Undertaking to Pay Costs................................  40

                                  ARTICLE VI

                           CONCERNING THE TRUSTEE...........................  41

     SECTION 6.01.  Duties and Responsibilities of Trustee..................  41
     SECTION 6.02.  Reliance on Documents, Opinions, etc....................  42
     SECTION 6.03.  No Responsibility for Recitals, etc.....................  44
     SECTION 6.04.  Trustee, Authenticating Agent, Paying Agents,
                    Transfer Agents or Registrar May Own Securities.........  44
     SECTION 6.05.  Moneys to be Held in Trust..............................  44
     SECTION 6.06.  Compensation and Expenses of Trustee....................  44
     SECTION 6.07.  Officers' Certificate as Evidence.......................  45
     SECTION 6.08.  Conflicting Interest of Trustee.........................  46
     SECTION 6.09.  Eligibility of Trustee..................................  46
     SECTION 6.10.  Resignation or Removal of Trustee.......................  46
     SECTION 6.11.  Acceptance by Successor Trustee.........................  48
     SECTION 6.12.  Succession by Merger, etc...............................  49
     SECTION 6.13.  Limitation on Rights of Trustee as a Creditor...........  49
     SECTION 6.14.  Authenticating Agents...................................  49

                                  ARTICLE VII

                       CONCERNING THE SECURITYHOLDERS.......................  51

     SECTION 7.01.  Action by Securityholders...............................  51
     SECTION 7.02.  Proof of Execution by Securityholders...................  52
     SECTION 7.03.  Who Are Deemed Absolute Owners..........................  52
     SECTION 7.04.  Securities Owned by Company Deemed Not Outstanding......  52
     SECTION 7.05.  Revocation of Consents; Future Holders Bound............  53

                                 ARTICLE VIII

                          SECURITYHOLDERS' MEETINGS.........................  53

     SECTION 8.01.  Purposes of Meetings....................................  53
     SECTION 8.02.  Call of Meetings by Trustee.............................  54
</TABLE>

                                      iv
<PAGE>
 
<TABLE>
     <S>                                                                      <C>
     SECTION 8.03.  Call of Meetings by Company or Securityholders..........  54
     SECTION 8.04.  Qualifications for Voting...............................  54
     SECTION 8.05.  Regulations.............................................  55
     SECTION 8.06.  Voting..................................................  56

                                  ARTICLE IX

                                  AMENDMENTS................................  57

     SECTION 9.01.  Without Consent of Securityholders......................  57
     SECTION 9.02.  With Consent of Securityholders.........................  59
     SECTION 9.03.  Compliance with Trust Indenture Act of 1939;
                    Effect of Supplemental Indentures.......................  60
     SECTION 9.04.  Notation on Securities..................................  60
     SECTION 9.05.  Evidence of Compliance of Supplemental Indenture
                    to be Furnished Trustee.................................  60

                                   ARTICLE X

              CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.............  61

     SECTION 10.01. Company May Consolidate, etc., on Certain Terms.........  61
     SECTION 10.02. Successor Corporation to be Substituted for Company.....  62
     SECTION 10.03. Opinion of Counsel to be Given Trustee..................  62

                                  ARTICLE XI

                   SATISFACTION AND DISCHARGE OF INDENTURE..................  62

     SECTION 11.01. Discharge of Indenture..................................  62
     SECTION 11.02. Deposited Moneys and U.S. Government Obligations
                    to be Held in Trust by Trustee..........................  63
     SECTION 11.03. Paying Agent to Repay Moneys Held.......................  64
     SECTION 11.04. Return of Unclaimed Moneys..............................  64
     SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S.
                    Government Obligations..................................  64

                                  ARTICLE XII

                   IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                           OFFICERS AND DIRECTORS...........................  66

     SECTION 12.01. Indenture and Securities Solely Corporate
                    Obligations.............................................  66
</TABLE>

                                       v
<PAGE>
 
<TABLE>
     <S>                                                                      <C>
                                 ARTICLE XIII

                          MISCELLANEOUS PROVISIONS..........................  67

     SECTION 13.01. Successors..............................................  67
     SECTION 13.02. Official Acts by Successor Corporation..................  67
     SECTION 13.03. Surrender of Company Powers.............................  67
     SECTION 13.04. Addresses for Notices, etc..............................  67
     SECTION 13.05. Governing Law...........................................  68
     SECTION 13.06. Evidence of Compliance with Conditions Precedent........  68
     SECTION 13.07. Business Days...........................................  68
     SECTION 13.08. Trust Indenture Act of 1939 to Control..................  68
     SECTION 13.09. Table of Contents, Headings, etc........................  69
     SECTION 13.10. Execution in Counterparts...............................  69
     SECTION 13.11. Separability............................................  69
     SECTION 13.12. Assignment..............................................  69
     SECTION 13.13. Acknowledgement of Rights...............................  69

                                  ARTICLE XIV

                   REDEMPTION OF SECURITIES -- MANDATORY AND
                           OPTIONAL SINKING FUND............................  70

     SECTION 14.01. Special Event Redemption................................  70
     SECTION 14.02. Optional Redemption by Company..........................  70
     SECTION 14.03. No Sinking Fund.........................................  71
     SECTION 14.04. Notice of Redemption; Selection of Securities...........  71
     SECTION 14.05. Payment of Securities Called for Redemption.............  72
     SECTION 14.06. Conditional Right to Advance Maturity...................  73

                                  ARTICLE XV

                        SUBORDINATION OF SECURITIES.........................  74

     SECTION 15.01. Agreement to Subordinate................................  74
     SECTION 15.02. Default on Senior Indebtedness..........................  74
     SECTION 15.03. Liquidation; Dissolution; Bankruptcy....................  75
     SECTION 15.04. Subrogation.............................................  76
     SECTION 15.05. Trustee to Effectuate Subordination.....................  77
     SECTION 15.06. Notice by the Company...................................  77
     SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness...  79
     SECTION 15.08. Subordination May Not Be Impaired.......................  79

                                  ARTICLE XVI

                    EXTENSION OF INTEREST PAYMENT PERIOD....................  80

     SECTION 16.01. Extension of Interest Payment Period....................  80
     SECTION 16.02. Notice of Extension.....................................  81
</TABLE>

                                      vi
<PAGE>
 
<TABLE>
<S>                                                                          <C>
EXHIBIT A................................................................... A-1
</TABLE>

Testimonium
Signatures
Acknowledgements

                                      vii
<PAGE>
 
          THIS INDENTURE, dated as of January 31, 1997, between Investors
Financial Services Corp., a Delaware corporation (hereinafter sometimes called
the "Company"), and The Bank of New York, a New York banking corporation, as
trustee (hereinafter sometimes called the "Trustee"),

                             W I T N E S  E T H :

          In consideration of the premises, and the purchase of the Securities
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to time
of the Securities, as follows:


                                   ARTICLE I

                                  DEFINITIONS

          SECTION 1.01.  Definitions.

          The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context other wise requires) for all purposes
of this Indenture shall have the respective meanings specified in this Section
1.01.  All other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act of 1939"), or which
are by reference therein defined in the Securities Act, shall (except as herein
otherwise expressly provided or unless the context otherwise requires) have the
meanings assigned to such terms in said Trust Indenture Act of 1939 and in said
Securities Act as in force at the date of this Indenture as originally executed.
The following terms have the meanings given to them in the Declaration:  (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Property Trustee; (iv)
Administrative Trustees; (v) Direct Action; (vi) Purchase Agreement; (vii)
Distributions; (viii) Series A Capital Securities; and (ix) Series B Capital
Securities.  All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting principles and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation.  The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.  Headings are used for convenience of
reference only and do not affect interpretation.  The singular includes the
plural and vice versa.

          "Additional Interest" shall have the meaning set forth in Section
2.06(c).
<PAGE>
 
          "Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Initial Optional Redemption Date (if no maturity
is within three months before or after the Initial Optional Redemption Date,
yields for the two published maturities most closely corresponding to the
Initial Optional Redemption Date shall be interpolated, and the Adjusted
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption
date plus, in each case, (a) 1.90% if such redemption date occurs on or prior to
February 1, 1998, and (b) 1.50% in all other cases.

          "Adverse Tax Consequence" shall have the meaning set forth in the
definition of Tax Event.

          "Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.

          "Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.

          "Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.

                                       2
<PAGE>
 
          "Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.

          "Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

          "Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking institutions
in The City of New York or Boston, Massachusetts are authorized or required by
law or executive order to close.

          "Capital Securities" shall mean undivided beneficial interests in the
assets of Investors Capital Trust which rank pari passu with the Common
Securities issued by Investors Capital Trust; provided, however, that if an
                                              --------  -------            
Event of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the holders of the Capital
Securities shall be paid in full the Distributions and the liquidation,
redemption and other payments to which they are entitled.  References to
"Capital Securities" shall include collectively any Series A Capital Securities
and Series B Capital Securities.

          "Capital Securities Guarantee" shall mean any guarantee that the
Company may enter into with The Bank of New York or other Persons that operates
directly or indirectly for the benefit of holders of Capital Securities of
Investors Capital Trust and shall include a Series A Capital Securities
Guarantee and a Series B Capital Securities Guarantee with respect to the Series
A Capital Securities and the Series B Capital Securities, respectively.

          "Commission" shall mean the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act of 1939,
then the body performing such duties at such time.

          "Common Securities" shall mean undivided beneficial interests in the
assets of Investors Capital Trust which rank pari passu with Capital Securities
issued by Investors Capital Trust; provided, however, that if an Event of
                                   --------  -------                     
Default has oc curred and is continuing, no payments in respect of Distributions
on, or payments upon liquidation, redemption or otherwise with respect to, the
Common Securities shall be made until the holders

                                       3
<PAGE>
 
of the Capital Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.

          "Common Securities Guarantee" shall mean any guarantee of the Company
that operates directly or indirectly for the benefit of holders of Common
Securities of Investors Capital Trust.

          "Common Stock" shall mean (i) the Common Stock, par value $.01 per
share, of the Company, (ii) the Class A Common Stock, par value $.01 per share,
of the Company or (iii) any other class of stock resulting from changes or
reclassifications of such Common Stock or Class A Common Stock consisting solely
of changes in par value, or from par value to no par value, or from no par value
to par value.

          "Company" shall mean Investors Financial Services Corp., a Delaware
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.

          "Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, a Vice Chairman, a Vice President, the Comptroller, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.

          "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Initial Optional Redemption Date that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a maturity date corresponding to the
Initial Optional Redemption Date.  If no United States Treasury security has a
maturity date which is within three months before or after the Initial Optional
Redemption Date, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Adjusted
Treasury Rate shall be interpolated or extrapolated on a straight-line basis,
rounding to the nearest month.

          "Comparable Treasury Price" means, with respect to any redemption date
pursuant to Section 14.01, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of five Reference Treasury Dealer Quotations for
such

                                       4
<PAGE>
 
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.

          "Compounded Interest" shall have the meaning set forth in Section
16.01.

          "Conditional Tax Redemption Event" shall have the meaning set forth in
Section 14.06.

          "Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.

          "Declaration" means the Amended and Restated Declaration of Trust of
Investors Capital Trust, dated as of the Issue Date.

          "Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.

          "Defeasance Agent" shall have the meaning set forth in Section 11.05.

          "Deferred Interest" shall have the meaning set forth in Section 16.01.

          "Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.

          "Depositary" shall mean, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.05(d).

          "Discharged" shall have the meaning set forth in Section 11.05.

          "Dissolution Event" means the liquidation of the Trust pursuant to the
Declaration, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by Investors Capital Trust
pro rata in accordance with the Declaration.
--- ----                                     

                                       5
<PAGE>
 
          "Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          "Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B Securities
for Series A Securities and to exchange a Series B Capital Securities Guarantee
for a Series A Capital Securities Guarantee and (ii) by Investors Capital Trust
to exchange Series B Capital Securities for Series A Capital Securities.

          "Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.

          "Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.

          "Global Security" means, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the Indenture,
which shall be registered in the name of the Depositary or its nominee.

          "Indebtedness for Money Borrowed" shall mean (i) any obligation of, or
any obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments and any deferred obligation for the payment of the purchase price of
property or assets acquired other than in the ordinary course of business, and
(ii) all indebtedness of the Company for claims in respect of derivative
products such as interest and foreign exchange rate contracts, commodity
contracts and similar arrangements, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred.  For
purposes of this definition, "claim" shall have the meaning assigned in Section
101(5) of the Bankruptcy Code of 1978, as amended and in effect on the date of
the execution of this Indenture.

          "Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter created, assumed or incurred, which specifically by
its terms ranks junior to and not equally with or prior to the Securities (and
any other Indebtedness Ranking on a Parity with the Securities) in right of
payment upon the happening of any dissolution or winding up or liquidation or
reorganization of the Company.  The securing of any Indebtedness for Money
Borrowed, otherwise constituting

                                       6
<PAGE>
 
Indebtedness Ranking Junior to the Securities, shall not be deemed to prevent
such Indebtedness for Money Borrowed from constituting Indebtedness Ranking
Junior to the Securities.

          "Indebtedness Ranking on a Parity with the Securities" shall mean
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter created, assumed or incurred, which specifically by
its terms ranks equally with and not prior to the Securities in the right of
payment upon the happening of any dissolution or winding up or liquidation or
reorganization of the Company.  The securing of any Indebtedness for Money
Borrowed, otherwise constituting Indebtedness Ranking on a Parity with the
Securities, shall not be deemed to prevent such Indebtedness for Money Borrowed
from constituting Indebtedness Ranking on a Parity with the Securities.

          "Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.

          "Initial Optional Redemption Date" means February 1, 2007.

          "Interest Payment Date" shall have the meaning set forth in Section
2.06.

          "Issue Date" means January 31, 1997.

          "Investors Capital Trust" shall mean Investors Capital Trust I, a
Delaware business trust created for the purpose of issuing undivided beneficial
interests in its assets in connection with the issuance of Securities under
this Indenture.

          "Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.

          "Maturity Date" shall mean February 1, 2027, or such other date to
which the maturity of the Securities is changed pursuant to the right of the
Company to advance the maturity date pursuant to the provisions of Section
14.06.

          "Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.

          "Non Book-Entry Capital Securities" shall have the meaning set forth
in Section 2.05.

          "Officers" shall mean any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, a Vice President, the Comptroller, the Group
Director, the Secretary or an Assistant Secretary of the Company.

                                       7
<PAGE>
 
          "Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.

          "Opinion of Counsel" shall mean a written opinion of counsel, who may
be an employee of the Company, and who shall be acceptable to the Trustee.

          "Optional Redemption Price" shall have the meaning set forth in
Section 14.02.

          "Other Debentures" means all junior subordinated debentures issued by
the Company from time to time and sold to trusts to be established by the
Company (if any), in each case similar to Investors Capital Trust.

          "Other Guarantees" means all guarantees issued by the Company with
respect to capital securities (if any) and issued to other trusts established by
the Company (if any), in each case similar to Investors Capital Trust.

          The term "outstanding" when used with reference to Securities, shall,
subject to the provisions of Section 7.04, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except

          (a)  Securities theretofore cancelled by the Trustee or the
               Authenticating Agent or delivered to the Trustee for
               cancellation;

          (b)  Securities, or portions thereof, for the payment or redemption of
               which moneys in the necessary amount shall have been deposited in
               trust with the Trustee or with any paying agent (other than the
               Company) or shall have been set aside and segregated in trust by
               the Company (if the Company shall act as its own paying agent);
               provided that, if such Securities, or portions thereof, are to be
               redeemed prior to maturity thereof, notice of such redemption
               shall have been given as in Article XIV provided or provision
               satisfactory to the Trustee shall have been made for giving such
               notice; and

          (c)  Securities in lieu of or in substitution for which other
               Securities shall have been authenticated and delivered pursuant
               to the terms of Section 2.08 unless proof satisfactory to the
               Company and the Trustee is presented that any such Securities are
               held by bona fide holders in due course.

          "Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock

                                       8
<PAGE>
 
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

          "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt and as that evidenced by
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.08 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.

          "Principal Office of the Trustee", or other similar term, shall mean
the office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered.

          "Purchase Agreement" shall mean the Purchase Agreement dated January
30, 1997 among the Company, Investors Capital Trust and the initial purchaser
named therein.

          "Property Trustee" shall have the same meaning as set forth in the
Declaration.

          "Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.

          "Redemption Price" means the Special Event Redemption Price or the
Optional Redemption Price, as the context requires.

          "Reference Treasury Dealer" means (i) Goldman, Sachs & Co. and its
successors; provided, however, that if the foregoing shall cease to be a primary
            --------  -------                                                   
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer,
and (ii) any other Primary Treasury Dealer selected by the Company.

          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date pursuant to Section 14.01, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m. New York City time on the third Business Day preceding such
redemption date.

          "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Trust and
the Initial Purchaser named therein as such agreement may be amended, modified
or supplemented from time to time.

                                       9
<PAGE>
 
          "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 Federal Reserve or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the Issue Date, the
Capital Securities do not constitute, or within 90 days of the date thereof,
will not constitute, Tier I Capital (or its then equivalent); provided,
                                                               -------- 
however, that a Regulatory Capital Event shall not occur by reason of the use of
-------                                                                         
the proceeds of the Securities in the manner contemplated by the Offering
Memorandum dated January 30, 1997 relating to the Capital Securities.

          "Responsible Officer", when used with respect to the Trustee, shall
mean any vice president, any assistant vice president, any assistant secretary,
any assistant treasurer or senior trust officer, any trust officer or assistant
trust officer or any other officer or assistant officer in the Principal Office
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

          "Restricted Security" shall mean Securities that bear or are required
to bear the Securities Act legends set forth in Exhibit A hereto.

          "Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.

          "Securities" means, collectively, the Series A Securities and the
Series B Securities.

          "Securities Act" shall mean the Securities Act of 1933, as amended.

          "Securityholder", "holder of Securities", or other similar terms,
shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.

          "Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Trustee pursuant to Section 4.01, and (ii)
following a Dissolution Event, any security register maintained by a Security
Registrar for the

                                      10
<PAGE>
 
Securities appointed by the Company following the execution of a supplemental
indenture providing for transfer procedures as provided for in Section 2.07(a).

          "Security Registrar" shall mean the Person who is appointed by the
Company to maintain the Security Register.

          "Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed or incurred, except Indebtedness Ranking on a Parity with the
Securities or Indebtedness Ranking Junior to the Securities, and any deferrals,
renewals or extensions of such Senior Indebtedness.

          "Series A Securities" means the Company's 9.77% Series A Junior
Subordinated Deferrable Interest Debentures due February  1, 2027, as
authenticated and issued under this Indenture.

          "Series B Securities" means the Company's Series B 9.77% Junior
Subordinated Deferrable Interest Debentures due February 1, 2027, as
authenticated and issued under this Indenture.

          "Special Event" means a Conditional Tax Redemption Event or a
Regulatory Capital Event, as the case may be.

          "Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities pursuant to Section 14.01 hereof, an amount in cash
equal to the greater of (i) 100% of the principal amount to be redeemed or (ii)
the sum, as determined by a Quotation Agent, of the present values of the
principal amount and premium payable with respect to an optional redemption
pursuant to Section 14.02 on the Initial Optional Redemption Date, together with
scheduled payments of interest on the Securities from the redemption date to and
including the Initial Optional Redemption Date, in each case discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, any
accrued and unpaid interest thereon, including Compounded Interest and
Additional Interest, if any, to the date of such redemption.

          "Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries, or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a

                                      11
<PAGE>
 
general partner.  For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.

          "Tax Event" shall mean the receipt by Investors Capital Trust and the
Company of an opinion of a nationally recognized tax counsel experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced prospective 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 administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
(a) amendment or change is effective or (b) which pronouncement or decision is
announced, on or after the Issue Date, there is more than an insubstantial risk
that (i) Investors Capital Trust is, or will be within 90 days of the date of
such opinion, subject to United States Federal income tax with respect to income
received or accrued on the Securities, (ii) interest payable by the Company on
the Securities 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) Investors Capital Trust is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges (each of the circumstances
referred to in clauses (i), (ii) and (iii) being referred to herein as an
"Adverse Tax Consequence").

          "Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder.

          "Trust Indenture Act of 1939" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture, except as provided
in Section 9.03.

          "Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.

          "U.S. Government Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable

                                      12
<PAGE>
 
or redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation evidenced
by such depository receipt.


                                  ARTICLE II

                                  SECURITIES

          SECTION 2.01.  Forms Generally.

          The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, the terms of which are incorporated
in and made a part of this Indenture.  The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject or usage.  Each Security shall be dated the date of
its authentication.  The Securities shall be issued in minimum denominations of
$100,000 and integral multiples of $1,000 above $100,000.

          SECTION 2.02.  Execution and Authentication.

          The Securities shall be signed on behalf of the Company by the
Chairman, a Vice Chairman, the Chief Executive Officer, the President, a Vice
President or the Controller and attested by its Secretary or an Assistant
Secretary.  Any signature may be in the form of a manual or facsimile signature
in the manner set forth in Exhibit A.  If an Officer whose signature is on a
Security no longer holds that office at the time the Security is authenticated,
the Security shall nevertheless be valid.

          A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee.  The signature of the
Trustee shall be conclusive evidence that the Security has been authenticated
under this Indenture.  The form of Trustee's certificate of authentication to be
borne by the Securities shall be substantially as set forth in Exhibit A hereto.

          The Trustee shall, upon a Company Order, authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at any
time may not exceed the sum of

                                      13
<PAGE>

$25,774,000 aggregate principal amount of the Securities, except as provided in
Sections 2.07, 2.08, 2.10 and 14.05.  The series of Securities to be initially
issued hereunder shall be the Series A Securities.

          SECTION 2.03.  Form and Payment.

          Except as provided in Section 2.05, the Securities shall be issued in
fully registered certificated form without interest coupons.  Principal of,
premium, if any, and interest on the Securities issued in certificated form will
be payable, the transfer of such Securities will be registrable and such
Securities will be exchangeable for Securities bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
under Section 3.02; provided, however, that payment of interest with respect to
                    --------  -------
the Securities (other than Securities issued in global form, the payment of
interest on which shall be made in immediately available funds) may be made at
the option of the Company (i) by check mailed to the holder at such address as
shall appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto, provided that proper wire transfer
instructions have been received in writing by the relevant record date.
Notwithstanding the foregoing, so long as the holder of any Securities is the
Property Trustee, the payment of the principal of, premium, if any, and
interest (including Compounded Interest and Additional Interest, if any) on such
Securities held by the Property Trustee will be made in immediately available
funds at such place and to such account as may be designated by the Property
Trustee.
          SECTION 2.04.  Legends.

          (a) Except as permitted by subsection (b) of this Section 2.04 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit A
hereto.

          (b) The Company shall issue and the Trustee shall authenticate Series
B Securities in exchange for Series A Securities accepted for exchange in the
Exchange Offer, which Series B Securities shall not bear the legends required by
subsection (a) above, in each case unless the holder of such Series A Securities
is either (A) a broker-dealer who purchased such Series A Securities directly
from the Company for resale pursuant to Rule 144A or any other available
exemption under the Securities Act, (B) a Person participating in the
distribution of the Series A Securities or (C) a Person who is an affiliate (as
defined in Rule 144 under the Securities Act) of the Company.

                                      14
<PAGE>
 
          SECTION 2.05.  Global Security.

          (a)  In connection with a Dissolution Event,

               (i)  if any Capital Securities are held in book-entry form, the
     related Definitive Securities shall be presented to the Trustee (if an
     arrangement with the Depositary has been maintained) by the Property
     Trustee in exchange for one or more Global Securities (as may be required
     pursuant to Section 2.07) in an aggregate principal amount equal to the
     aggregate principal amount of all outstanding Securities, to be registered
     in the name of the Depositary, or its nominee, and delivered by the Trustee
     to the Depositary for crediting to the accounts of its participants
     pursuant to the instructions of the Administrative Trustees; the Company
     upon any such presentation shall execute one or more Global Securities in
     such aggregate principal amount and deliver the same to the Trustee for
     authentication and delivery in accordance with this Indenture; and payments
     on the Securities issued as a Global Security will be made to the
     Depositary; and

               (ii) if any Capital Securities are held in certificated form,
     the related Definitive Securities may be presented to the Trustee by the
     Property Trustee and any Capital Security certificate which represents
     Capital Securities other than Capital Securities in book-entry form ("Non
     Book-Entry Capital Securities") will be deemed to represent beneficial
     interests in Securities presented to the Trustee by the Property Trustee
     having an aggregate principal amount equal to the aggregate liquidation
     amount of the Non Book-Entry Capital Securities until such Capital Security
     certificates are presented to the Security Registrar for transfer or
     reissuance, at which time such Capital Security certificates will be
     cancelled and a Security, registered in the name of the holder of the
     Capital Security certificate or the transferee of the holder of such
     Capital Security certificate, as the case may be, with an aggregate
     principal amount equal to the aggregate liquidation amount of the Capital
     Security certificate cancelled, will be executed by the Company and
     delivered to the Trustee for authentication and delivery in accordance with
     this Indenture.  Upon the issuance of such Securities, Securities with an
     equivalent aggregate principal amount that were presented by the Property
     Trustee to the Trustee will be deemed to have been cancelled.

          (b)  The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, that the
                                                           --------          
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and redemp-

                                      15
<PAGE>
 
tions.  Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.05.

          (c) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of such
successor Depositary.

          (d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to be
a clearing agency registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company will
execute, and the Trustee, upon Company Order, will authenticate and make
available for delivery the Definitive Securities, in authorized denominations,
and in an aggregate principal amount equal to the principal amount of the Global
Security in exchange for such Global Security.  If there is an Event of Default,
the Depositary shall have the right to exchange the Global Securities for
Definitive Securities.  In addition, the Company may at any time determine that
the Securities shall no longer be represented by a Global Security.  In the
event of such an Event of Default or such a determination, the Company shall
execute, and subject to Section 2.07, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
make available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security.  Upon the
exchange of the Global Security for such Definitive Securities, in authorized
denominations, the Global Security shall be cancelled by the Trustee.  Such
Definitive Securities issued in exchange for the Global Security shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee.  The Trustee shall deliver such Definitive
Securities to the Depositary for delivery to the Persons in whose names such
Definitive Securities are so registered.

          SECTION 2.06   Interest.

          (a) Each Security will bear interest at the rate of 9.77% per annum
(the "Coupon Rate") from the most recent date to which interest has been paid or
duly provided for or, if no interest has been paid or duly provided for, from
the Issue Date, until the principal thereof becomes due and payable, and at the
Coupon Rate on any overdue principal (and premium, if any) and

                                      16
<PAGE>
 
(to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest, compounded semiannually, payable
(subject to the provisions of Article XVI) semiannually in arrears on February 1
and August 1 of each year (each, an "Interest Payment Date") commencing on
August 1, 1997, to the Person in whose name such Security or any predecessor
Security is registered, at the close of business on the regular record date for
such interest installment, which shall be the date fifteen days prior to the
relevant Interest Payment Date.

          (b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.  In the event that any
Interest Payment Date falls on a day that is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which 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 such date.

          (c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and payable
by Investors Capital Trust on the outstanding Securities shall not be reduced as
a result of any additional taxes, duties and other governmental charges to which
Investors Capital Trust has become subject as a result of a Tax Event
("Additional Interest").

          SECTION 2.07.  Transfer and Exchange.

          (a)  Transfer Restrictions.  The Series A Securities, and those Series
               ---------------------                                            
B Securities with respect to which any Person described in Section 2.04(b)(A),
(B) or (C) is the beneficial owner, may not be transferred except in compliance
with the legend contained in Exhibit A unless otherwise determined by the
Company in accordance with applicable law.  The Securities may be transferred
only in blocks having an aggregate principal amount of not less than $100,000.
Any such transfer of the Securities in a block having an aggregate principal
amount of less than $100,000 shall be deemed to be void and of no legal effect
whatsoever.  Any such transferee shall be deemed not to be holder of such
Securities for any purpose, including but not limited to the receipt of payment
on such Securities, and such transferee shall be deemed to have no interest
whatsoever in such Securities.  Upon any distribution of the Securities
following a Dissolution Event, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 9.01 to provide for the transfer
restrictions and procedures with respect to the Securities substantially similar
to those contained in the

                                      17
<PAGE>
 
Declaration to the extent applicable in the circumstances existing at such
time.

          (b)  General Provisions Relating to Transfers and Exchanges.  Upon
               -------------------------------------------------------       
surrender for registration of transfer of any Security at the office or agency
of the Company maintained for the purpose pursuant to Section 3.02, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the
same series, of any authorized denominations and of a like aggregate principal
amount.

          At the option of the holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency.  Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive.

          Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.

          All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.

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

          The Company shall not be required to (i) issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption or any notice of
selection of Securities for redemption under Article XIV hereof and ending at
the close of business on the day of such mailing; or (ii) register the transfer
of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.

                                      18
<PAGE>
 
          (c)  Exchange of Series A Securities for Series B Securities.  The
               -------------------------------------------------------      
Series A Securities may be exchanged for Series B Securities pursuant to the
terms of the Exchange Offer.  The Trustee shall make the exchange as follows:

          The Company shall present the Trustee with an Officers' Certificate
certifying the following:

          (A)  upon issuance of the Series B Securities, the transactions
               contemplated by the Exchange Offer have been consummated; and

          (B)  the principal amount of Series A Securities properly tendered in
               the Exchange Offer that are represented by a Global Security and
               the principal amount of Series A Securities properly tendered in
               the Exchange Offer that are represented by Definitive Securities,
               the name of each holder of such Definitive Securities, the
               principal amount properly tendered in the Exchange Offer by each
               such holder and the name and address to which Definitive
               Securities for Series B Securities shall be registered and sent
               for each such holder.

          The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Securities have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act of 1939 and (y) with respect to the
matters set forth in Section 3(p) of the Registration Rights Agreement and (iii)
a Company Order, shall authenticate (A) a Global Security for Series B
Securities in aggregate principal amount equal to the aggregate principal amount
of Series A Securities represented by a Global Security indicated in such
Officers' Certificate as having been properly tendered and (B) Definitive
Securities representing Series B Securities registered in the names of, and in
the principal amounts indicated in, such Officers' Certificate.

          If the principal amount of the Global Security for the Series B
Securities is less than the principal amount of the Global Security for the
Series A Securities, the Trustee shall make an endorsement on such Global
Security for Series A Securities indicating a reduction in the principal amount
represented thereby.

          The Trustee shall deliver such Definitive Securities for Series B
Securities to the holders thereof as indicated in such Officers' Certificate.

                                      19
<PAGE>
 
          SECTION 2.08.  Replacement Securities.

          If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met.  An indemnity bond must be supplied by
the holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee and any authenticating agent from any loss that
any of them may suffer if a Security is replaced.  The Company or the Trustee
may charge for its expenses in replacing a Security.

          Every replacement Security is an obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
of mutilated, destroyed, lost or stolen Securities.

          SECTION 2.09.  Treasury Securities.

          In determining whether the holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or any Affiliate of the Company shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so considered.

          SECTION 2.10.  Temporary Securities.

          Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.

          If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay.  The definitive Securities
shall be printed, lithographed, typewritten or engraved, or provided by any
combination thereof,

                                      20
<PAGE>
 
or in any other manner permitted by the rules and regulations of any applicable
securities exchange, all as determined by the officers executing such definitive
Securities.  After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency maintained by the Company for such
purpose pursuant to Section 3.02 hereof, without charge to the Holder.  Upon
surrender for cancellation of any one or more temporary Securities, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, in exchange therefor the same aggregate principal amount of definitive
Securities of authorized denominations. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.

          SECTION 2.11.  Cancellation.

          The Company at any time may deliver Securities to the Trustee for
cancellation.  The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of cancelled Securities in accordance
with its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it.  The Company
may not issue new Securities to replace Securities that have been redeemed or
paid or that have been delivered to the Trustee for cancellation.

          SECTION 2.12.  Defaulted Interest.

          Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the holder on the
relevant regular record date by virtue of having been such holder; and such
Defaulted Interest shall be paid by the Company, at its election, as provided in
clause (a) or clause (b) below:

          (a)  The Company may make payment of any Defaulted Interest on
     Securities to the Persons in whose names such Securities (or their
     respective Predecessor Securities) are registered at the close of business
     on a special record date for the payment of such Defaulted Interest, which
     shall be fixed in the following manner: the Company shall notify the
     Trustee in writing of the amount of Defaulted Interest proposed to be paid
     on each such Security and the date of the proposed payment, and at the same
     time the Company shall deposit with the Trustee an amount of money equal to
     the aggregate amount proposed to be paid in respect of such Defaulted
     Interest or shall make arrangements satisfactory to the Trustee for such
     deposit prior to the date of the proposed payment, such money when
     deposited to be held in

                                      21
<PAGE>
 
     trust for the benefit of the Persons entitled to such Defaulted Interest
     as in this clause provided.  Thereupon the Trustee shall fix a special
     record date for the payment of such Defaulted Interest which shall not be
     more than 15 nor less than 10 days prior to the date of the proposed
     payment and not less than 10 days after the receipt by the Trustee of the
     notice of the proposed payment.  The Trustee shall promptly notify the
     Company of such special record date and, in the name and at the expense of
     the Company, shall cause notice of the proposed payment of such Defaulted
     Interest and the special record date therefor to be mailed, first class
     postage prepaid, to each Securityholder at his or her address as it appears
     in the Security Register, not less than 10 days prior to such special
     record date.  Notice of the proposed payment of such Defaulted Interest and
     the special record date therefor having been mailed as aforesaid, such
     Defaulted Interest shall be paid to the Persons in whose names such
     Securities (or their respective Predecessor Securities) are registered on
     such special record date and shall be no longer payable pursuant to the
     following clause (b).

          (b)  The Company may make payment of any Defaulted Interest on any
     Securities in any other lawful manner not inconsistent with the
     requirements of any securities exchange on which such Securities may be
     listed, and upon such notice as may be required by such exchange, if, after
     notice given by the Company to the Trustee of the proposed payment pursuant
     to this clause, such manner of payment shall be deemed practicable by the
     Trustee.

          SECTION 2.13.  CUSIP Numbers.

          The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Securityholders; provided that any such notice
                                                   --------                     
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.  The Company will promptly notify
the Trustee of any change in the CUSIP numbers.

                                      22
<PAGE>
 
                                  ARTICLE III

                      PARTICULAR COVENANTS OF THE COMPANY

          SECTION 3.01.  Payment of Principal, Premium and Interest.

          The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the place,
at the respective times and in the manner provided herein.  Except as provided
in Section 2.03, each installment of interest on the Securities may be paid by
mailing checks for such interest payable to the order of the holder of Security
entitled thereto as they appear in the Security Register.  The Company further
covenants to pay any and all amounts including, without limitation, Liquidated
Damages, if any, on the dates and in the manner required under the Registration
Rights Agreement.

          SECTION 3.02.  Offices for Notices and Payments, etc.

          So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Securities may be presented for payment, an office or agency where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Securities or of this Indenture may be
served.  The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof.  Until
otherwise designated from time to time by the Company in a notice to the
Trustee, any such office or agency for all of the above purposes shall be the
Principal Office of the Trustee.  In case the Company shall fail to maintain any
such office or agency in the Borough of Manhattan, The City of New York, or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Principal Office of the Trustee.

          In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of Manhattan,
The City of New York, where the Securities may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned.  The Company will give
to the

                                      23
<PAGE>
 
Trustee prompt written notice of any such designation or rescission thereof.

          SECTION 3.03.  Appointments to Fill Vacancies in Trustee's Office.

          The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.

          SECTION 3.04.  Provision as to Paying Agent.

          (a)  If the Company shall appoint a paying agent other than the
               Trustee with respect to the Securities, it will cause such paying
               agent to execute and deliver to the Trustee an instrument in
               which such agent shall agree with the Trustee, subject to the
               provision of this Section 3.04,

               (1)  that it will hold all sums held by it as such agent for the
                    payment of the principal of and premium, if any, or interest
                    on the Securities (whether such sums have been paid to it
                    by the Company or by any other obligor on the Securities of
                    such series) in trust for the benefit of the holders of the
                    Securities;

               (2)  that it will give the Trustee notice of any failure by the
                    Company (or by any other obligor on the Securities) to make
                    any payment of the principal of and premium or interest on
                    the Securities when the same shall be due and payable; and

               (3)  that it will at any time during the continuance of any such
                    failure, upon the written request of the Trustee, forthwith
                    pay to the Trustee all sums so held in trust by it as such
                    paying agent.

          (b)  If the Company shall act as its own paying agent, it will, on or
               before each due date of the principal of and premium, if any, or
               interest on the Securities, set aside, segregate and hold in
               trust for the benefit of the holders of the Securities a sum
               sufficient to pay such principal, premium or interest so becoming
               due and will notify the Trustee of any failure to take such
               action and of any failure by the Company (or by any other obligor
               under the Securities) to make any payment of the principal of and
               premium, if any, or interest

                                      24
<PAGE>
 
               on the Securities when the same shall become due and payable.

          (c)  Anything in this Section 3.04 to the contrary notwithstanding,
               the Company may, at any time, for the purpose of obtaining a
               satisfaction and discharge with respect to the Securities
               hereunder, or for any other reason, pay or cause to be paid to
               the Trustee all sums held in trust for any such Securities by the
               Trustee or any paying agent hereunder, as required by this
               Section 3.04, such sums to be held by the Trustee upon the trusts
               herein contained.

          (d)  Anything in this Section 3.04 to the contrary notwithstanding,
               the agreement to hold sums in trust as provided in this Section
               3.04 is subject to Sections 11.03 and 11.04.

          SECTION 3.05.  Certificate to Trustee.

          The Company will deliver to the Trustee on or before 120 days after
the end of each fiscal year in each year, commencing with the first fiscal year
ending after the date hereof, so long as Securities are outstanding hereunder,
an Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the Company
stating that in the course of the performance by the signers of their duties as
officers of the Company they would normally have knowledge of any default by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature thereof.

          SECTION 3.06.  Compliance with Consolidation Provisions.

          The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article X hereof are complied with.

          SECTION 3.07.  Limitation on Dividends.

          The Company will not (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 (which includes common and preferred 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

                                      25
<PAGE>
 
(including any Other Debentures) that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of any securities of any Subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Securities (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Common Stock of the Company; (b) any declaration of a dividend in connection
with the implementation of a stockholder's rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto; (c) payments under the Capital Securities Guarantee;
(d) as a direct result of, and only to the extent required in order to avoid the
issuance of fractional shares of capital stock following a reclassification of
the Company's capital stock or the exchange or the conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock; (e) 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; and (f)
purchases of Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans) if at such time
(i) an Event of Default shall have occurred and be continuing, (ii) there shall
have occurred any event of which the Company has actual knowledge that (a) is,
or with the giving of notice or the lapse of time, or both, would constitute, an
Event of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (iii) if the Securities are held by the Property
Trustee, the Company shall be in default with respect to its payment obligations
under the Capital Securities Guarantee or (iv) the Company shall have given
notice of its election of the exercise of its right to extend the interest
payment period pursuant to Section 16.01 and any such extension shall be
continuing.

          SECTION 3.08.  Covenants as to Investors Capital Trust.

          In the event Securities are issued to Investors Capital Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
Investors Capital Trust, for so long as such Trust Securities remain
outstanding, the Company will (i) maintain 100% direct ownership of the Common
Securities of Investors Capital Trust; provided, however, that any successor of
                                       --------  -------                       
the Company, permitted pursuant to Article X, may succeed to the Company's
ownership of such Common Securities, (ii) use its reasonable efforts to cause
Investors Capital Trust (a) to remain a statutory business trust, except in
connection with a distribution of Securities, the redemption of all of the Trust
Securities of Investors Capital Trust or certain mergers, consolidations or

                                      26
<PAGE>
 
amalgamations, each as permitted by the Declaration of Investors Capital Trust,
and (b) to otherwise continue to be treated as a grantor trust and not an
association taxable as a corporation for United States federal income tax
purposes and (iii) to use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the
Securities.

          SECTION 3.09.  Payment of Expenses.

          In connection with the offering, sale and issuance of the Securities
to Investors Capital Trust and in connection with the sale of the Trust
Securities by Investors Capital Trust, the Company, in its capacity as borrower
with respect to the Securities, shall:

          (a)  pay all costs and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the initial purchaser
payable pursuant to the Purchase Agreement, fees and expenses in connection
with any exchange offer or other action to be taken pursuant to the Registration
Rights Agreement and compensation of the Trustee in accordance with the
provisions of Section 6.06;

          (b)  pay all costs and expenses of Investors Capital Trust (including,
but not limited to, costs and expenses relating to the organization of Investors
Capital Trust, the offering, sale and issuance of the Trust Securities
(including commissions to the initial purchaser in connection therewith), the
fees and expenses of the Property Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of Investors Capital Trust, including
without limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing, and
disposition of assets of Investors Capital Trust;

          (c)  be primarily and fully liable for any indemnification obligations
arising with respect to the Declaration;

          (d)  pay any and all taxes (other than United States withholding taxes
attributable to Investors Capital Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of Investors Capital Trust; and

          (e)  pay all other fees, expenses, debts and obligations (other than
payments of principal of, premium, if any, or interest on the Trust Securities)
related to Investors Capital Trust.

                                      27
<PAGE>
 
          SECTION 3.10.  Payment Upon Resignation or Removal.

          Upon termination of this Indenture or the removal or resignation of
the Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation.  Upon termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued and owing to the
date of such termination, removal or resignation.


                                  ARTICLE IV

                   SECURITYHOLDERS' LISTS AND REPORTS BY THE
                            COMPANY AND THE TRUSTEE

          SECTION 4.01.  Securityholders' Lists.

          The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:

          (a)  on a semiannual basis on each regular record date for the
               Securities, a list, in such form as the Trustee may reasonably
               require, of the names and addresses of the Securityholders as of
               such record date; and

          (b)  at such other times as the Trustee may request in writing, within
               30 days after the receipt by the Company, of any such request, a
               list of similar form and content as of a date not more than 15
               days prior to the time such list is furnished,

          except that, no such lists need be furnished so long as the Trustee is
          in possession thereof by reason of its acting as Security Registrar.

          SECTION 4.02.  Preservation and Disclosure of Lists.

          (a)  The Trustee shall preserve, in as current a form as is reasonably
               practicable, all information as to the names and addresses of the
               holders of the Securities (1) contained in the most recent list
               furnished to it as provided in Section 4.01 or (2) received by it
               in the capacity of Securities registrar (if so acting)
               hereunder.  The Trustee may destroy any list furnished to it as
               provided in Section 4.01 upon receipt of a new list so furnished.

                                      28
<PAGE>
 
          (b)  In case three or more holders of Securities (hereinafter referred
               to as "applicants") apply in writing to the Trustee and furnish
               to the Trustee reasonable proof that each such applicant has
               owned a Security for a period of at least six months preceding
               the date of such application, and such application states that
               the applicants desire to communicate with other holders of
               Securities or with holders of all Securities with respect to
               their rights under this Indenture and is accompanied by a copy
               of the form of proxy or other communication which such
               applicants propose to transmit, then the Trustee shall within 5
               Business Days after the receipt of such application, at its
               election, either:

          (1)  afford such applicants access to the information preserved at the
               time by the Trustee in accordance with the provisions of
               subsection (a) of this Section 4.02; or

          (2)  inform such applicants as to the approximate number of holders
               of all Securities, whose names and addresses appear in the
               information preserved at the time by the Trustee in accordance
               with the provisions of subsection (a) of this Section 4.02, and
               as to the approximate cost of mailing to such Securityholders the
               form of proxy or other communication, if any, specified in such
               application.

                    If the Trustee shall elect not to afford such applicants
               access to such information, the Trustee shall, upon the written
               request of such applicants, mail to each Securityholder whose
               name and address appear in the information preserved at the time
               by the Trustee in accordance with the provisions of subsection
               (a) of this Section 4.02 a copy of the form of proxy or other
               communication which is specified in such request with reasonable
               promptness after a tender to the Trustee of the material to be
               mailed and of payment, or provision for the payment, of the
               reasonable expenses of such mailing, unless within five days
               after such tender, the Trustee shall mail to such applicants and
               file with the Commission, together with a copy of the material to
               be mailed, a written statement to the effect that, in the opinion
               of the Trustee, such mailing would be contrary to the best
               interests of the holders of Securities of such series or all
               Securities, as the case may be, or would be in violation of
               applicable law. Such written statement shall specify the basis of
               such opinion.

                                      29
<PAGE>
 
               If the Commission, after opportunity for a hearing upon the
               objections specified in the written statement so filed, shall
               enter an order refusing to sustain any of such objections or if,
               after the entry of an order sustaining one or more of such
               objections, the Commission shall find, after notice and
               opportunity for hearing, that all the objections so sustained
               have been met and shall enter an order so declaring, the Trustee
               shall mail copies of such material to all such Securityholders
               with reasonable promptness after the entry of such order and the
               renewal of such tender; otherwise the Trustee shall be relieved
               of any obligation or duty to such applicants respecting their
               application.

          (c)  Each and every holder of Securities, by receiving and holding the
               same, agrees with the Company and the Trustee that neither the
               Company nor the Trustee nor any paying agent shall be held
               accountable by reason of the disclosure of any such information
               as to the names and addresses of the holders of Securities in
               accordance with the provisions of subsection (b) of this Section
               4.02, regardless of the source from which such information was
               derived, and that the Trustee shall not be held accountable by
               reason of mailing any material pursuant to a request made under
               said subsection (b).

          SECTION 4.03.  Reports by Company.

          (a)  The Company covenants and agrees to file with the Trustee, within
               15 days after the date on which the Company is required to file
               the same with the Commission, copies of the annual reports and of
               the information, documents and other reports (or copies of such
               portions of any of the foregoing as the Commission may from time
               to time by rules and regulations prescribe) which the Company may
               be required to file with the Commission pursuant to Section 13 or
               Section 15(d) of the Exchange Act; or, if the Company is not
               required to file information, documents or reports pursuant to
               either of such sections, then to file with the Trustee and the
               Commission, in accordance with rules and regulations prescribed
               from time to time by the Commission, such of the supplementary
               and periodic information, documents and reports which may be
               required pursuant to Section 13 of the Exchange Act in respect of
               a security listed and registered on a national securities
               exchange as may be pre-

                                      30
<PAGE>
 
               scribed from time to time in such rules and regulations.

          (b)  The Company covenants and agrees to file with the Trustee and the
               Commission, in accordance with the rules and regulations
               prescribed from time to time by the Commission, such additional
               information, documents and reports with respect to compliance by
               the Company with the conditions and covenants provided for in
               this Indenture as may be required from time to time by such rules
               and regulations.

          (c)  The Company covenants and agrees to transmit by mail to all
               holders of Securities, as the names and addresses of such holders
               appear upon the Security Register, within 30 days after the
               filing thereof with the Trustee, such summaries of any
               information, documents and reports required to be filed by the
               Company pursuant to subsections (a) and (b) of this Section 4.03
               as may be required by rules and regulations prescribed from time
               to time by the Commission.

          (d)  Delivery of such reports, information and documents to the
               Trustee is for informational purposes only and the Trustee's
               receipt of such shall not constitute constructive notice of any
               information contained therein or determinable from information
               contained therein, including the Company's compliance with any of
               its covenants hereunder (as to which the Trustee is entitled to
               rely exclusively on Officers' Certificates).

          (e)  So long as is required for an offer or sale of the Securities to
               qualify for an exemption under Rule 144A under the Securities
               Act, the Company shall, upon request, provide the information
               required by clause (d)(4) thereunder to each Holder and to each
               beneficial owner and prospective purchaser of Securities
               identified by any holder of Restricted Securities, unless such
               information is furnished to the Commission pursuant to Section 13
               or 15(d) of the Exchange Act.

          SECTION 4.04.  Reports by the Trustee.

          (a)  The Trustee shall transmit to Securityholders such reports
               concerning the Trustee and its actions under this Indenture as
               may be required pursuant to the Trust Indenture Act of 1939 at
               the times and in the manner provided pursuant thereto.  If
               required by Section 313(a) of the Trust Indenture

                                      31
<PAGE>
 
               Act of 1939, the Trustee shall, within sixty days after each May
               15, following the date of this Indenture, commencing May 15,
               1997, deliver to Securityholders a brief report, dated as of such
               May 15, which complies with the provisions of such Section
               313(a).

          (b)  A copy of each such report shall, at the time of such
               transmission to Securityholders, be filed by the Trustee with
               each stock exchange, if any, upon which the Securities are
               listed, with the Commission and with the Company.  The Company
               will promptly notify the Trustee when the Securities are listed
               on any stock exchange.


                                   ARTICLE V

                  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                              ON EVENT OF DEFAULT

          SECTION 5.01.  Events of Default.

          One or more of the following events of default shall constitute an
Event of Default hereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

          (a)  default in the payment of any interest upon any Security or any
               Other Debentures when it becomes due and payable, and continuance
               of such default for a period of 30 days; provided, however, that
                                                        --------               
               a valid extension of an interest payment period by the Company in
               accordance with the terms hereof shall not constitute a default
               in the payment of interest for this purpose; or

          (b)  default in the payment of all or any part of the principal of (or
               premium, if any, on) any Security or any Other Debentures as and
               when the same shall become due and payable either at maturity,
               upon redemption, by declaration of acceleration of maturity or
               otherwise; or

          (c)  default in any material respect in the performance, or breach,
               of any covenant or warranty of the Company in this Indenture
               (other than a covenant or warranty a default in whose performance
               or whose breach is elsewhere in this Section specifically dealt
               with), and continuance of such default

                                      32
<PAGE>
 
               or breach for a period of 90 days after there has been given, by
               registered or certified mail, to the Company by the Trustee or to
               the Company and the Trustee by the holders of at least 25% in
               aggregate principal amount of the outstanding Securities a
               written notice specifying such default or breach and requiring
               it to be remedied and stating that such notice is a "Notice of 
               Default" hereunder; or

          (d)  a court having jurisdiction in the premises shall enter a decree
               or order for relief in respect of the Company in an involuntary
               case under any applicable bankruptcy, insolvency or other
               similar law now or hereafter in effect, or appointing a receiver,
               liquidator, assignee, custodian, trustee, sequestrator (or
               similar official) of the Company or for any substantial part of
               its property, or ordering the winding-up or liquidation of its
               affairs and such decree or order shall remain unstayed and in
               effect for a period of 90 consecutive days; or

          (e)  the Company shall commence a voluntary case under any applicable
               bankruptcy, insolvency or other similar law now or hereafter in
               effect, shall consent to the entry of an order for relief in an
               involuntary case under any such law, or shall consent to the
               appointment of or taking possession by a receiver, liquidator,
               assignee, trustee, custodian, sequestrator (or other similar
               official) of the Company or of any substantial part of its
               property, or shall make any general assignment for the benefit of
               creditors, or shall fail generally to pay its debts as they
               become due.

          If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding may declare the principal amount of all Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the holders of the outstanding Securities), and upon any
such declaration the same shall become immediately due and payable.

          The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i)
the Company shall pay or shall deposit with the Trustee a sum sufficient to

                                      33
<PAGE>
 
pay (A) all matured installments of interest upon all the Securities and the
principal of and premium, if any, on any and all Securities which shall have
become due otherwise than by acceleration (with interest upon such principal
and premium, if any, and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest specified in the Securities to the date of
such payment or deposit) and (B) such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith, and (ii) any and all Events of
Default under the Indenture, other than the non-payment of the principal of the
Securities which shall have become due solely by such declaration of
acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then, in every such case, the holders of a majority in aggregate
principal amount of the Securities then outstanding, by written notice to the
Company and to the Trustee, may rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.

          In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.

          SECTION 5.02.  Payment of Securities on Default; Suit Therefor.

          The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and when
the same shall become due and payable, and such default shall have continued for
a period of 30 days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Securities as and when the same
shall have become due and payable, whether at maturity of the Securities or upon
redemption or by declaration or otherwise, then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the
Securities, the whole amount that then shall have become due and payable on all
such Securities for principal and premium, if any, or interest, or both, as the
case may be, with interest upon the overdue principal and premium, if any, and
(to the extent that payment of

                                      34
<PAGE>
 
such interest is enforceable under applicable law and, if the Securities are
held by Investors Capital Trust or a trustee of such trust, without duplication
of any other amounts paid by Investors Capital Trust or a trustee in respect
thereof) upon the overdue installments of interest at the rate borne by the
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith.

          In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the moneys
adjudged or decreed to be payable.

          In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities under
Title 11, United States Code, or any other applicable law, or in case a receiver
or trustee shall have been appointed for the property of the Company or such
other obligor, or in the case of any other similar judicial proceedings relative
to the Company or other obligor upon the Securities, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Securities and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Securities, or to the
creditors or property of the Company or such other obligor, unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the
Securities in any election of a

                                      35
<PAGE>
 
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.

          Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.

          All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof on any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the holders of the
Securities.

          In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.

          SECTION 5.03.  Application of Moneys Collected by Trustee.

          Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Securities in respect of which moneys have
been collected, and stamping thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:

                                      36
<PAGE>
 
          First:  To the payment of costs and expenses of collection applicable
to the Securities and reasonable compensation to the Trustee, its agents,
attorneys and counsel, and of all other expenses and liabilities incurred, and
all advances made, by the Trustee except as a result of its negligence or bad
faith;

          Second:  To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;

          Third:  To the payment of the amounts then due and unpaid upon
Securities for principal of (and premium, if any) and interest on the
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference of priority of any kind, according to the
amounts due on such Securities for principal (and premium, if any) and interest,
respectively; and

          Fourth:  To the Company.

          SECTION 5.04.  Proceedings by Securityholders.

          Except as contemplated by this Section 5.04, no holder of any Security
shall have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless such holder previously
shall have given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to the Securities specifying such Event of
Default, as hereinbefore provided, and unless also the holders of not less than
25% in aggregate principal amount of the Securities then outstanding shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding, it being understood and
intended, and being expressly covenanted by the taker and holder of every
Security with every other taker and holder and the Trustee, that no one or more
holders of Securities shall have any right in any manner whatever by virtue of
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities.

                                      37
<PAGE>
 
          Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of
(premium, if any) and interest on such Security, on or after the same shall have
become due and payable, or to institute suit for the enforcement of any such
payment, shall not be impaired or affected without the consent of such holder
and by accepting a Security hereunder it is expressly understood, intended and
covenanted by the taker and holder of every Security with every other such taker
and holder and the Trustee, that no one or more holders of Securities shall have
any right in any manner whatsoever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of the holders of any
other Securities, or to obtain or seek to obtain priority over or preference to
any other such holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Securities.  For the protection and enforcement of the provisions of
this Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

          The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default under this Indenture and the
Securities.

          SECTION 5.05.  Proceedings by Trustee.

          In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

          SECTION 5.06.  Remedies Cumulative and Continuing.

          Except as provided in the last paragraph of Section 2.08, all powers
and remedies given by this Article V to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Securities, and no delay or omission
of the Trustee or of

                                      38
<PAGE>
 
any holder of any of the Securities to exercise any right or power accruing upon
any Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.04, every
power and remedy given by this Article V or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.

          SECTION 5.07.  Direction of Proceedings and Waiver of Defaults by
                         Majority of Securityholders.

          The holders of a majority in aggregate principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
                                                                    -------- 
however, that (subject to the provisions of Section 6.01) the Trustee shall have
-------                                                                         
the right to decline to follow any such direction if the Trustee shall determine
that the action so directed would be unjustly prejudicial to the holders not
taking part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed would
involve the Trustee in personal liability.  Prior to any declaration
accelerating the maturity of the Securities, the holders of a majority in
aggregate principal amount of the Securities at the time outstanding may on
behalf of the holders of all of the Securities waive any past default or Event
of Default and its consequences except a default (a) in the payment of principal
of or premium, if any, or interest on any of the Securities or (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Security affected; provided, however, that if the
                                                 --------  -------             
Securities are held by the Property Trustee, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities shall have consented to such waiver or
modification to such waiver; provided further, that if the consent of the holder
                             -------- -------                                   
of each outstanding Security is required, such waiver shall not be effective
until each holder of the Trust Securities shall have consented to such waiver.
Upon any such waiver, the default covered thereby shall be deemed to be cured
for all purposes of this Indenture and the Company, the Trustee and the holders
of the Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this

                                      39
<PAGE>
 
Section 5.07, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.

          SECTION 5.08.  Notice of Defaults.

          The Trustee shall, within 90 days after the occurrence of a default
with respect to the Securities mail to all Securityholders, as the names and
addresses of such holders appear upon the Security register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the purpose of this Section
5.08 being hereby defined to be the events specified in clauses (a), (b), (c),
(d) and (e) of Section 5.01, not including periods of grace, if any, provided
for therein, and irrespective of the giving of written notice specified in
clause (c) of Section 5.01); and provided that, except in the case of default in
                                 -------- ----                                  
the payment of the principal of or premium, if any, or interest on any of the
Securities, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Securityholders;
and provided further, that in the case of any default of the character specified
    -------- -------                                        
in Section 5.01(c) no such notice to Securityholders shall be given until at
least 60 days after the occurrence thereof but shall be given within 90 days
after such occurrence.

          SECTION 5.09.  Undertaking to Pay Costs.

          All parties to this Indenture agree, and each holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.09 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after the
same shall have become due and payable.

                                      40
<PAGE>
 
                                  ARTICLE VI

                            CONCERNING THE TRUSTEE

          SECTION 6.01.  Duties and Responsibilities of Trustee.

          With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.

          No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that

          (a)  prior to the occurrence of an Event of Default and after the
               curing or waiving of all Events of Default which may have
               occurred

               (1)  the duties and obligations of the Trustee shall be
                    determined solely by the express provisions of this
                    Indenture, and the Trustee shall not be liable except for
                    the performance of such duties and obligations as are
                    specifically set forth in this Indenture, and no implied
                    covenants or obligations shall be read into this Indenture
                    against the Trustee; and

               (2)  in the absence of bad faith on the part of the Trustee, the
                    Trustee may conclusively rely, as to the truth of the
                    statements and the correctness of the opinions expressed
                    therein, upon any certificates or opinions furnished to the
                    Trustee and conforming to the requirements of this
                    Indenture; but, in the case of any such certificates or
                    opinions which by any provision hereof are specifically
                    required to be furnished to the Trustee, the Trustee shall
                    be under a duty to examine the same to determine whether or
                    not they conform to the requirements of this Indenture;

                                      41
<PAGE>
 
          (b)  the Trustee shall not be liable for any error of judgment made in
               good faith by a Responsible Officer or Officers of the Trustee,
               unless it shall be proved that the Trustee was negligent in
               ascertaining the pertinent facts; and

          (c)  the Trustee shall not be liable with respect to any action taken
               or omitted to be taken by it in good faith, in accordance with
               the direction of the Securityholders pursuant to Section 5.07,
               relating to the time, method and place of conducting any
               proceeding for any remedy available to the Trustee, or exercising
               any trust or power conferred upon the Trustee, under this
               Indenture.

          None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.

          SECTION 6.02.  Reliance on Documents, Opinions, etc.

          Except as otherwise provided in Section 6.01:

          (a)  the Trustee may rely and shall be protected in acting or
               refraining from acting upon any resolution, certificate,
               statement, instrument, opinion, report, notice, request, consent,
               order, bond, note, debenture or other paper or document believed
               by it to be genuine and to have been signed or presented by the
               proper party or parties;

          (b)  any request, direction, order or demand of the Company mentioned
               herein may be sufficiently evidenced by an Officers' Certificate
               (unless other evidence in respect thereof be herein specifically
               prescribed); and any Board Resolution may be evidenced to the
               Trustee by a copy thereof certified by the Secretary or an
               Assistant Secretary of the Company;

          (c)  the Trustee may consult with counsel of its selection and any
               advice or Opinion of Counsel shall be full and complete
               authorization and protection in respect of any action taken or
               suffered omitted by it hereunder in good faith and in accordance
               with such advice or Opinion of Counsel;

                                      42
<PAGE>
 
          (d)  the Trustee shall be under no obligation to exercise any of the
               rights or powers vested in it by this Indenture at the request,
               order or direction of any of the Securityholders, pursuant to the
               provisions of this Indenture, unless such Securityholders shall
               have offered to the Trustee reasonable security or indemnity
               against the costs, expenses and liabilities which may be incurred
               therein or thereby;

          (e)  the Trustee shall not be liable for any action taken or omitted
               by it in good faith and believed by it to be authorized or within
               the discretion or rights or powers conferred upon it by this
               Indenture; nothing contained herein shall, however, relieve the
               Trustee of the obligation, upon the occurrence of an Event of
               Default (that has not been cured or waived), to exercise such of
               the rights and powers vested in it by this Indenture, and to use
               the same degree of care and skill in their exercise, as a prudent
               man would exercise or use under the circumstances in the conduct
               of his own affairs;

          (f)  the Trustee shall not be bound to make any investigation into the
               facts or matters stated in any resolution, certificate,
               statement, instrument, opinion, report, notice, request, consent,
               order, approval, bond, debenture, coupon or other paper or
               document, unless requested in writing to do so by the holders of
               a majority in aggregate principal amount of the outstanding
               Securities; provided, however, that if the payment within a
               reasonable time to the Trustee of the costs, expenses or
               liabilities likely to be incurred by it in the making of such
               investigation is, in the opinion of the Trustee, not reasonably
               assured to the Trustee by the security afforded to it by the
               terms of this Indenture, the Trustee may require reasonable
               indemnity against such expense or liability as a condition to so
               proceeding; and

          (g)  the Trustee may execute any of the trusts or powers hereunder or
               perform any duties hereunder either directly or by or through
               agents (including any Authenticating Agent) or attorneys, and the
               Trustee shall not be responsible for any misconduct or negligence
               on the part of any such agent or attorney appointed by it with
               due care.

                                      43
<PAGE>
 
          SECTION 6.03.  No Responsibility for Recitals, etc.

          The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company and the Trustee and the Authenticating
Agent assume no responsibility for the correctness of the same. The Trustee and
the Authenticating Agent make no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any Securities or the proceeds of any Securities authenticated and
delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.

          SECTION 6.04.  Trustee, Authenticating Agent, Paying Agents, Transfer
                         Agents or Registrar May Own Securities.

          The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security Registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security Registrar.

          SECTION 6.05.  Moneys to be Held in Trust.

          Subject to the provisions of Section 11.04, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by the Chairman of the Board of Directors,
the President or a Vice President or the Treasurer or an Assistant Treasurer of
the Company.

          SECTION 6.06.  Compensation and Expenses of Trustee.

          The Company, as borrower, covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Company and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in

                                      44
<PAGE>
 
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify each of the Trustee or any predecessor Trustee (and its
officers, agents, directors and employees) for, and to hold it harmless against,
any and all loss, damage, claim, liability or expense including taxes (other
than taxes based on the income of the Trustee) incurred without negligence or
bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises. The
obligations of the Company under this Section 6.06 to compensate and indemnify
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Securities.

          Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.

          The provisions of this Section shall survive the termination of this
Indenture.

          SECTION 6.07.  Officers' Certificate as Evidence.

          Except as otherwise provided in Sections 6.01 and 6.02, whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.

                                      45
<PAGE>
 
          SECTION 6.08.  Conflicting Interest of Trustee.

          If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act of 1939, the Trustee
and the Company shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act of 1939, subject to the penultimate paragraph
thereof.

          SECTION 6.09.  Eligibility of Trustee.

          The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America or any state
or territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Commission authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.09 the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.

          The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.

          In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.

          SECTION 6.10.  Resignation or Removal of Trustee.

          (a)  The Trustee, or any trustee or trustees hereafter appointed, may
               at any time resign by giving written notice of such resignation
               to the Company and by mailing notice thereof to the holders of
               the Securities at their addresses as they shall appear on the
               Security register. Upon receiving such notice of resignation, the
               Company shall promptly appoint a successor trustee or trustees by
               written instrument, in duplicate, one copy of which instrument
               shall be delivered to the resigning Trustee and one copy to the
               successor trustee. If no successor trustee shall have been so
               appointed and have accepted appointment within 60 days after the
               mailing of such notice of resignation to the

                                      46
<PAGE>
 
               Securityholders, the resigning Trustee may petition any court of
               competent jurisdiction for the appointment of a successor
               trustee, or any Securityholder who has been a bona fide holder of
               a Security for at least six months may, subject to the provisions
               of Section 5.09, on behalf of himself and all others similarly
               situated, petition any such court for the appointment of a
               successor trustee. Such court may thereupon, after such notice,
               if any, as it may deem proper and prescribe, appoint a successor
               trustee.

          (b)  In case at any time any of the following shall occur --

               (1)  the Trustee shall fail to comply with the provisions of
                    Section 6.08 after written request therefor by the Company
                    or by any Securityholder who has been a bona fide holder of
                    a Security or Securities for at least six months, or

               (2)  the Trustee shall cease to be eligible in accordance with
                    the provisions of Section 6.09 and shall fail to resign
                    after written request therefor by the Company or by any such
                    Securityholder, or

               (3)  the Trustee shall become incapable of acting, or shall be
                    adjudged a bankrupt or insolvent, or a receiver of the
                    Trustee or of its property shall be appointed, or any public
                    officer shall take charge or control of the Trustee or of
                    its property or affairs for the purpose of rehabilitation,
                    conservation or liquidation,

               then, in any such case, the Company may remove the Trustee and
               appoint a successor trustee by written instrument, in duplicate,
               one copy of which instrument shall be delivered to the Trustee so
               removed and one copy to the successor trustee, or, subject to the
               provisions of Section 5.09, any Securityholder who has been a
               bona fide holder of a Security for at least six months may, on
               behalf of himself and all others similarly situated, petition any
               court of competent jurisdiction for the removal of the Trustee
               and the appointment of a successor trustee. Such court may
               thereupon, after such notice, if any, as it may deem proper and
               prescribe, remove the Trustee and appoint a successor trustee.

                                      47
<PAGE>
 
          (c)  The holders of a majority in aggregate principal amount of the
               Securities at the time outstanding may at any time remove the
               Trustee and nominate a successor trustee, which shall be deemed
               appointed as successor trustee unless within 10 days after such
               nomination the Company objects thereto or if no successor trustee
               shall have been so appointed and shall have accepted appointment
               within 30 days after such removal, in which case the Trustee so
               removed or any Securityholder, upon the terms and conditions and
               otherwise as in subsection (a) of this Section 6.10 provided, may
               petition any court of competent jurisdiction for an appointment
               of a successor trustee.

          (d)  Any resignation or removal of the Trustee and appointment of a
               successor trustee pursuant to any of the provisions of this
               Section 6.10 shall become effective upon acceptance of
               appointment by the successor trustee as provided in Section 6.11.

          SECTION 6.11.  Acceptance by Successor Trustee.

          Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Company and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the successor trustee,
the trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 6.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring trustee thereunder.  Upon
request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers.  Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.06.

          No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.

                                      48
<PAGE>
 
          Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they shall
appear on the Security register. If the Company fails to mail such notice within
10 days after the acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.

          SECTION 6.12.  Succession by Merger, etc.

          Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.

          In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor trustee; and in all such cases such certificates shall have the full
force which the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.

          SECTION 6.13.  Limitation on Rights of Trustee as a Creditor.

          The Trustee shall comply with Section 311(a) of the Trust Indenture
Act of 1939, excluding any creditor relationship described in Section 311(b) of
the Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent included therein.

          SECTION 6.14.  Authenticating Agents.

          There may be one or more Authenticating Agents appointed by the
Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentica-

                                      49
<PAGE>
 
tion and delivery of Securities issued upon exchange or transfer thereof as
fully to all intents and purposes as though any such Authenticating Agent had
been expressly authorized to authenticate and deliver Securities; provided, that
                                                                  -------- 
the Trustee shall have no liability to the Company for any acts or omissions of
the Authenticating Agent with respect to the authentication and delivery of
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
or territory thereof or of the District of Columbia authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of at
least $5,000,000 and being subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section 6.14 the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect herein specified in this Section.

          Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 6.14 without the execution or filing of
any paper or any further act on the part of the parties hereto or such
Authenticating Agent.

          Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company.  The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Company.  Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.14, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all Securityholders as the names and addresses of such holders
appear on the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with

                                      50
<PAGE>
 
like effect as if originally named as Authenticating Agent herein.

          The Company, as borrower, agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services. Any Authenticating
Agent shall have no responsibility or liability for any action taken by it as
such in accordance with the directions of the Trustee.


                                  ARTICLE VII

                        CONCERNING THE SECURITYHOLDERS

          SECTION 7.01.  Action by Securityholders.

          Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders duly
called and held in accordance with the provisions of Article VIII, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of such Securityholders.

          If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action or to revoke any such action, but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the Outstanding Securities shall be computed as of
the record date; provided, however, that no such authorization, agreement or
                 --------  -------                                          
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.

                                      51
<PAGE>
 
          SECTION 7.02.  Proof of Execution by Securityholders.

          Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of
the execution of any instrument by a Securityholder or his agent or proxy shall
be sufficient if made in accordance with such reasonable rules and regulations
as may be prescribed by the Trustee or in such manner as shall be satisfactory
to the Trustee.  The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security Registrar.  The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.

          The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.

          SECTION 7.03.  Who Are Deemed Absolute Owners.

          Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and any Security Registrar may deem the Person in whose name such
Security shall be registered upon the Security Register to be, and may treat him
as, the absolute owner of such Security (whether or not such Security shall be
overdue) for the purpose of receiving payment of or on account of the principal
of and premium, if any, and (subject to Section 2.06) interest on such Security
and for all other purposes; and neither the Company nor the Trustee nor any
Authenticating Agent nor any paying agent nor any transfer agent nor any
Security Registrar shall be affected by any notice to the contrary.  All such
payments so made to any holder for the time being or upon his order shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Security.

          SECTION 7.04.  Securities Owned by Company Deemed Not Outstanding.

          In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company, except
for the Securities owned by or on behalf of Investors Capital Trust, or any
other obligor on the Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, except for the Securities owned by or on behalf of Investors Capital
Trust, or any other obligor on the Securities shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided that
                                                                 -------- ----
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Securities which the
Trustee actually knows are so owned shall be so disre-

                                      52
<PAGE>
 
garded.  Securities so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Securities and that the pledgee is not the Company or any such other
obligor or person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor.
In the case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee.

          SECTION 7.05.  Revocation of Consents; Future Holders Bound.

          At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of which is shown by the evidence to
be included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee at its principal office and upon
proof of holding as provided in Section 7.02, revoke such action so far as
concerns such Security (or so far as concerns the principal amount represented
by any exchanged or substituted Security). Except as aforesaid any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution therefor.


                                 ARTICLE VIII

                           SECURITYHOLDERS' MEETINGS

          SECTION 8.01.  Purposes of Meetings.

          A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the following
purposes:

          (a)  to give any notice to the Company or to the Trustee, or to give
               any directions to the Trustee, or to consent to the waiving of
               any default hereunder and its consequences, or to take any other
               action authorized to be taken by Securityholders pursuant to any
               of the provisions of Article V;

                                      53
<PAGE>
 
          (b) to remove the Trustee and nominate a successor trustee pursuant to
              the provisions of Article VI;

          (c)  to consent to the execution of an indenture or indentures
               supplemental hereto pursuant to the provisions of Section 9.02;
               or

          (d)  to take any other action authorized to be taken by or on behalf
               of the holders of any specified aggregate principal amount of
               such Securities under any other provision of this Indenture or
               under applicable law.

          SECTION 8.02.  Call of Meetings by Trustee.

          The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.01, to be held at such time and at such place
in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of the Securityholders, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall be
mailed not less than 20 nor more than 180 days prior to the date fixed for the
meeting.

          SECTION 8.03.  Call of Meetings by Company or Securityholders.

          In case at any time the Company pursuant to a resolution of the Board
of Directors, or the holders of at least 10% in aggregate principal amount of
the Securities then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or such Securityholders may determine the time and the
place in said Borough of Manhattan for such meeting and may call such meeting to
take any action authorized in Section 8.01, by mailing notice thereof as
provided in Section 8.02.

          SECTION 8.04.  Qualifications for Voting.

          To be entitled to vote at any meeting of Securityholders a Person
shall be (a) a holder of one or more Securities or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more Securities.  The only
Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee

                                      54
<PAGE>
 
and its counsel and any representatives of the Company and its counsel.

          SECTION 8.05.  Regulations.

          Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.

          The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.

          Subject to the provisions of Section 8.04, at any meeting each holder
of Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
                                                           --------  ------- 
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.

          The Persons entitled to vote a majority in principal amount of the
outstanding Securities shall constitute a quorum for a meeting of Holders of
Securities; provided, however, that if any action is to be taken at such meeting
with respect to a consent, waiver, request, demand, notice, authorization,
direction or other action which may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Securities, the
Persons holding or representing such specified percentage in principal amount of
the outstanding Securities will constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of holders of Securities, be dissolved. In any other
case the meeting may be ad-

                                      55
<PAGE>
 
journed for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting.  In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such adjourned meeting.  Notice of the
reconvening of any adjourned meeting shall be given as provided in Section 8.02,
except that such notice need be given only once not less than five days prior to
the date on which the meeting is scheduled to be reconvened.  Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the outstanding Securities which
shall constitute a quorum.

          Except as limited by the first proviso to the first paragraph of
Section 9.02, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
outstanding Securities; provided, however, that, except as limited by the first
proviso to the first paragraph of Section 9.02, any resolution with respect to
any consent, waiver, request, demand, notice, authorization, direction or other
action which this Indenture expressly provides may be given by the holders of
not less than a specified percentage in principal amount of the outstanding
Securities may be adopted at a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid only by the affirmative vote of
the holders of not less than such specified percentage in principal amount of
the outstanding Securities.

          Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities whether or not present or represented at the meeting.

          SECTION 8.06.  Voting.

          The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them.  The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting.  A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowl-

                                      56
<PAGE>
 
edge of the facts setting forth a copy of the notice of the meeting and showing
that said notice was mailed as provided in Section 8.02.  The record shall show
the serial numbers of the Securities voting in favor of or against any
resolution.  The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
The holders of the Series A Capital Securities and the Series B Capital
Securities shall vote for all purposes as a single class.

          Any record so signed and verified shall be conclusive evidence of the
matters therein stated.


                                  ARTICLE IX

                                  AMENDMENTS

          SECTION 9.01.  Without Consent of Securityholders.

          The Company and the Trustee may from time to time and at any time
amend this Indenture, without the consent of the Securityholders, for one or
more of the following purposes:

          (a)  to evidence the succession of another corporation to the Company,
               or successive successions, and the assumption by the successor
               corporation of the covenants, agreements and obligations of the
               Company pursuant to Article X hereof;

          (b)  to add to the covenants of the Company such further covenants,
               restrictions or conditions for the protection of the
               Securityholders as the Board of Directors and the Trustee shall
               consider to be for the protection of the Securityholders, and to
               make the occurrence, or the occurrence and continuance, of a
               default in any of such additional covenants, restrictions or
               conditions a default or an Event of Default permitting the
               enforcement of all or any of the remedies provided in this
               Indenture as herein set forth; provided, however, that in respect
                                              --------  -------            
               of any such additional covenant, restriction or condition such
               amendment may provide for a particular period of grace after
               default (which period may be shorter or longer than that allowed
               in the case of other defaults) or may provide for an immediate
               enforcement upon such default or may limit the remedies available
               to the Trustee upon such default;

                                      57
<PAGE>
 
          (c)  to provide for the issuance under this Indenture of Securities in
               coupon form (including Securities registrable as to principal
               only) and to provide for exchangeability of such Securities with
               the Securities issued hereunder in fully registered form and to
               make all appropriate changes for such purpose;

          (d)  to cure any ambiguity or to correct or supplement any provision
               contained herein or in any supplemental indenture which may be
               defective or inconsistent with any other provision contained
               herein or in any supplemental indenture, or to make such other
               provisions in regard to matters or questions arising under this
               Indenture; provided that any such action shall not materially
                          -------- ----                                     
               adversely affect the interests of the holders of the Securities;

          (e)  to evidence and provide for the acceptance of appointment
               hereunder by a successor trustee with respect to the Securities;

          (f)  to make provision for transfer procedures, certification, book-
               entry provisions, the form of restricted securities legends, if
               any, to be placed on Securities, minimum denominations and all
               other matters required pursuant to Section 2.07 or otherwise
               necessary, desirable or appropriate in connection with the
               issuance of Securities to holders of Capital Securities in the
               event of a distribution of Securities by Investors Capital Trust
               following a Dissolution Event;

          (g)  to qualify or maintain qualification of this Indenture under the
               Trust Indenture Act of 1939; or

          (h)  to make any change that does not adversely affect the rights of
               any Securityholder in any material respect.

          The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

          Any amendment to this Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company

                                      58
<PAGE>
 
and the Trustee without the consent of the holders of any of the Securities at
the time outstanding, notwithstanding any of the provisions of Section 9.02.

          SECTION 9.02.  With Consent of Securityholders.

          With the consent (evidenced as provided in Section 7.01) of the
holders of a majority in aggregate principal amount of the Securities at the
time outstanding, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time amend this Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the holders of the Securities; provided, however, that no such amendment shall
                               --------  -------                              
without the consent of the holders of each Security then outstanding and
affected thereby (i) extend the Maturity Date of any Security, or reduce the
rate or extend the time of payment of interest thereon (except as contemplated
by Article XVI), or reduce the principal amount thereof, or reduce any amount
payable on redemption thereof, or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than that provided in the
Securities, or impair or affect the right of any Securityholder to institute
suit for payment thereof, or (ii) reduce the aforesaid percentage of Securities
the holders of which are required to consent to any such amendment to this
Indenture, provided, however, that if the Securities are held by Investors
           --------  -------                                              
Capital Trust, such amendment shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
amendment; provided, further, that if the consent of the holder of each
           --------  -------                                           
outstanding Security is required, such amendment shall not be effective until
each holder of the Trust Securities shall have consented to such amendment.

          Upon the request of the Company accompanied by a copy of a resolution
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.

          Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the

                                      59
<PAGE>
 
Security Register.  Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

          It shall not be necessary for the consent of the Securityholders under
this Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

          SECTION 9.03.  Compliance with Trust Indenture Act of 1939; Effect of
                         Supplemental Indentures.

          Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act of 1939. Upon the execution
of any supplemental indenture pursuant to the provisions of this Article IX,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

          SECTION 9.04.  Notation on Securities.

          Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Securities then outstanding.

          SECTION 9.05.  Evidence of Compliance of Supplemental Indenture to be
                         Furnished Trustee.

          The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article IX.

          The Trustee may receive an Opinion of Counsel as conclusive evidence
that any supplemental indenture executed pursuant to this Article is authorized
or permitted by, and

                                      60
<PAGE>
 
conforms to, the terms of this Article and that it is proper for the Trustee
under the provisions of this Article to join in the execution thereof.


                                   ARTICLE X

               CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

          SECTION 10.01. Company May Consolidate, etc., on Certain Terms.

          Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company, or its successor or successors,
as the case may be, shall be a party or parties, or shall prevent any sale,
conveyance, transfer or lease of the property of the Company, or its successor
or successors, as the case may be, as an entirety, or substantially as an
entirety, to any other Person (whether or not affiliated with the Company, or
its successor or successors, as the case may be) authorized to acquire and
operate the same; provided, that (a) the Company is the surviving Person, or the
                  --------                                                      
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, conveyance, transfer or lease of property is
made is a Person organized and existing under the laws of the United States or
any State thereof or the District of Columbia, and (b) upon any such
consolidation, merger, sale, conveyance, transfer or lease, the due and punctual
payment of the principal of (and premium, if any) and interest on the Securities
according to their tenor and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be kept or performed by
the Company shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act of 1939, as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by the
Person formed by such consolidation, or into which the Company, shall have been
merged, or by the Person which shall have acquired such property, as the case
may be, (c) after giving effect to such consolidation, merger, sale, conveyance,
transfer or lease, no Default or Event of Default shall have occurred and be
continuing and (d) such consolidation, merger, sale, conveyance, transfer or
lease does not cause the Securities to be downgraded by a nationally recognized
statistical rating organization.

                                      61
<PAGE>
 
          SECTION 10.02.  Successor Corporation to be Substituted for Company.

          In case of any such consolidation, merger, conveyance or transfer and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and premium, if any, and
interest on all of the Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the Company thereupon shall be
relieved of any further liability or obligation hereunder or upon the
Securities. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of Investors Financial Services
Corp., any or all of the Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor Person instead of
the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Securities which previously shall have been signed and delivered
by the officers of the Company to the Trustee or the Authenticating Agent for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee or the Authenticating Agent for
that purpose. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Indentures had been issued at the date of the execution hereof.

          SECTION 10.03. Opinion of Counsel to be Given Trustee.

          The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article X complies with the provisions of this
Article X.


                                  ARTICLE XI

                    SATISFACTION AND DISCHARGE OF INDENTURE

          SECTION 11.01. Discharge of Indenture.

          When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than

                                      62
<PAGE>
 
any Securities which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.08) and not theretofore
cancelled, or (b) all the Securities not theretofore cancelled or delivered to
the Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay on the Maturity Date or upon
redemption all of the indebtedness on the Securities (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced as provided in Section 2.08) not theretofore cancelled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to the Maturity Date or redemption date, as the
case may be, but excluding, however, the amount of any moneys for the payment of
principal of or premium, if any, or interest on the Securities (1) theretofore
repaid to the Company in accordance with the provisions of Section 11.04, or (2)
paid to any State or to the District of Columbia pursuant to its unclaimed
property or similar laws, and if in either case the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect except for the provisions of
Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which
shall survive until such Securities shall mature and be paid.  Thereafter,
Sections 6.06, 6.10 and 11.04 shall survive, and the Trustee, on demand of the
Company accompanied by any Officers' Certificate and an Opinion of Counsel to
the effect that all conditions to the satisfaction and discharge of this
Indenture have been satisfied and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture, the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Securities.

          SECTION 11.02. Deposited Moneys and U.S. Government Obligations to be
                         Held in Trust by Trustee.

          Subject to the provisions of Section 11.04, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Sections 11.01 or
11.05 shall be held in trust and applied by it to the payment, either directly
or through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Securities for the payment of which
such moneys or U.S. Government Obligations have been deposited with the Trustee,
of all sums due and to become due thereon for principal, premium, if any, and
interest.

                                      63
<PAGE>
 
          The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 11.05 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of outstanding Securities.

          SECTION 11.03. Paying Agent to Repay Moneys Held.

          Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee) shall, upon
written demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.

          SECTION 11.04. Return of Unclaimed Moneys.

          Any moneys deposited with or paid to the Trustee or any paying agent
for payment of the principal of or premium, if any, or interest on Securities
and not applied but remaining unclaimed by the holders of Securities for two
years after the date upon which the principal of or premium, if any, or interest
on such Securities, as the case may be, shall have become due and payable,
shall be repaid to the Company by the Trustee or such paying agent on Company
Request; and the holder of any of the Securities shall thereafter look only to
the Company for any payment which such holder may be entitled to collect and all
liability of the Trustee or such paying agent with respect to such moneys shall
thereupon cease.

          SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
                         Obligations.

          The Company shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities on the 91st day after the
conditions set forth below have been satisfied:

          (1)  The Company shall have deposited or caused to be deposited
               irrevocably with the Trustee or the Defeasance Agent (as defined
               below) as trust funds in trust, specifically pledged as security
               for, and dedicated solely to, the benefit of the holders of the
               Securities (i) money in an amount, or (ii) U.S. Government
               Obligations which through the payment of interest and principal
               in respect thereof in accordance with their terms will provide,
               not later than one day before the due date of any payment, money
               in an amount, or (iii) a combination of (i) and (ii), sufficient,
               in the opinion (with respect to (ii) and (iii)) of a

                                      64
<PAGE>
 
               nationally recognized firm of independent public accountants
               expressed in a written certification thereof delivered to the
               Trustee and the Defeasance Agent, if any, to pay and discharge
               each installment of principal of and interest and premium, if
               any, on the outstanding Securities on the dates such installments
               of principal, interest or premium are due;

          (2)  if the Securities are then listed on any national securities
               exchange, the Company shall have delivered to the Trustee and
               the Defeasance Agent, if any, an Opinion of Counsel to the effect
               that the exercise of the option under this Section 11.05 would
               not cause such Securities to be delisted from such exchange;

          (3)  no Default or Event of Default with respect to the Securities
               shall have occurred and be continuing on the date of such
               deposit; and

          (4)  the Company shall have delivered to the Trustee and the
               Defeasance Agent, if any, an Opinion of Counsel to the effect
               that holders of the Securities will not recognize income, gain
               or loss for United States federal income tax purposes as a result
               of the exercise of the option under this Section 11.05 and will
               be subject to United States federal income tax on the same amount
               and in the same manner and at the same times as would have been
               the case if such option had not been exercised, and such opinion
               shall be based on a statute so providing or be accompanied by a
               private letter ruling to that effect received from the United
               States Internal Revenue Service or a revenue ruling pertaining to
               a comparable form of transaction to that effect published by the
               United States Internal Revenue Service; and

          (5)  the Company shall have delivered to the Trustee and the
               Defeasance Agent, if any, an Officers' Certificate and an Opinion
               of Counsel each stating that all conditions precedent herein
               provided for relating to the satisfaction and discharge of this
               Indenture have been complied with.

          "Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the rights

                                      65
<PAGE>
 
of holders of Securities to receive, from the trust fund described in clause
(1) above, payment of the principal of and the interest and premium, if any, on
the Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.02, 2.07, 2.08, 3.02, 3.04, 6.10 and
11.04; and (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder.

          "Defeasance Agent" means another financial institution which is
eligible to act as Trustee hereunder and which assumes all of the obligations of
the Trustee necessary to enable the Trustee to act under this Article.  In the
event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:

          (1)  The Trustee shall have approval rights over the document
               appointing such Defeasance Agent and the document setting forth
               such Defeasance Agent's rights and responsibilities;

          (2)  The Defeasance Agent shall provide verification to the Trustee
               acknowledging receipt of sufficient money and/or U. S. Government
               Obligations to meet the applicable conditions set forth in this
               Section 11.05.


                                  ARTICLE XII

                   IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                            OFFICERS AND DIRECTORS

          SECTION 12.01. Indenture and Securities Solely Corporate Obligations.

          No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture, or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.

                                      66
<PAGE>
 
                                 ARTICLE XIII

                           MISCELLANEOUS PROVISIONS


          SECTION 13.01. Successors.

          All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns whether
so expressed or not.

          SECTION 13.02. Official Acts by Successor Corporation.

          Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.

          SECTION 13.03. Surrender of Company Powers.

          The Company by instrument in writing executed by authority of a
majority of its Board of Directors and delivered to the Trustee may surrender
any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and as
to any successor Person.

          SECTION 13.04. Addresses for Notices, etc.

          Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, 89 South Street, P.O. Box 1537, Boston, MA 02205-1537,
Attention:  General Counsel.  Any notice, direction, request or demand by any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the office of
the Trustee, The Bank of New York, 101 Barclay Street, New York, NY 10286,
Attention:  Corporate Trust Trustee Administration (unless another address is
provided by the Trustee to the Company for the purpose).

          Any notice or communication to a Holder shall be mailed by first class
mail to his or her address shown on the register kept by the Registrar.  Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.

                                      67
<PAGE>
 
          SECTION 13.05.  Governing Law.

          This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State, without regard to
conflicts of laws principles thereof.

          SECTION 13.06. Evidence of Compliance with Conditions Precedent.

          Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion of
the signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.

          Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (except pursuant to Section 3.05) shall include
(1) a statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.

          SECTION 13.07. Business Days.

          In any case where the date of payment of principal of or premium, if
any, or interest on the Securities will not be a Business Day, the payment of
such principal of or premium, if any, or interest on the Securities need not be
made on such date but may be made on the next succeeding Business Day, with the
same force and effect as if made on the date of payment and no interest shall
accrue for the period from and after such date.

          SECTION 13.08. Trust Indenture Act of 1939 to Control.

          If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, such imposed duties shall
control.

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<PAGE>
 
          SECTION 13.09.  Table of Contents, Headings, etc.

          The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.

          SECTION 13.10. Execution in Counterparts.

          This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.

          SECTION 13.11. Separability.

          In case any one or more of the provisions contained in this Indenture
or in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.

          SECTION 13.12. Assignment.

          The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
                                        --------                               
assignment, the Company will remain primarily liable for all its obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties hereto.

          SECTION 13.13. Acknowledgement of Rights.

          The Company acknowledges that, with respect to any Securities held by
Investors Capital Trust or a trustee of such trust, if the Property Trustee of
such Trust fails to enforce its rights under this Indenture as the holder of the
Securities held as the assets of Investors Capital Trust, any holder of Capital
Securities may, to the fullest extent permitted by applicable law, institute
legal proceedings directly against the Company to enforce such Property
Trustee's rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
principal of or premium, if any, or interest on the

                                      69
<PAGE>
 
Securities when due, the Company acknowledges that a holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or premium, if any, or interest on the
Securities having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder on or after the respective due date
specified in the Securities.


                                  ARTICLE XIV

                   REDEMPTION OF SECURITIES -- MANDATORY AND
                             OPTIONAL SINKING FUND

          SECTION 14.01. Special Event Redemption.

          If a Special Event has occurred and is continuing then,
notwithstanding Section 14.02(a) but subject to Section 14.02(b), the Company
shall have the right at any time prior to the Initial Optional Redemption Date,
upon (i) not less than 45 days written notice to the Trustee, which notice shall
be accompanied by an Officers' Certificate certifying that a Special Event
entitling the Company to redeem the Securities pursuant to this Section, has
occurred and (ii) not less than 30 days nor more than 60 days written notice to
the Securityholders, to redeem the Securities, in whole (but not in part),
within 90 days following the occurrence of such Special Event at the Special
Event Redemption Price.  Following a Special Event, the Company shall take such
action as is necessary to promptly determine the Special Event Redemption Price,
including without limitation the appointment by the Company of a Quotation
Agent.  The Special Event Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date of such redemption or such earlier time as the
Company determines, provided that the Company shall deposit with the Trustee an
                    --------                                                   
amount sufficient to pay the Special Event Redemption Price by 10:00 a.m., New
York time, on the date such Special Event Prepayment Price is to be paid.  The
Company shall provide the Trustee with written notice of the Special Event
Redemption Price promptly after the calculation thereof, which notice shall
include any calculation made by the Quotation Agent in connection with the
determination of the Special Event Redemption Price.

          SECTION 14.02. Optional Redemption by Company.

          (a) Subject to the provisions of this Article XIV, the Company shall
have the right to redeem the Securities, in whole or in part, from time to time,
on or after Initial Optional Redemption Date at the optional redemption prices
set forth below (expressed as percentages of principal) plus accrued and unpaid
interest thereon (including Additional Interest and Compounded Interest, if any)
to the applicable date of redemption (the "Op-

                                      70
<PAGE>
 
tional Redemption Price"): if redeemed during the 12-month period beginning
February 1 of the years indicated below:


              Year                    Percentage
              ----                    ----------
              2007                     104.8850%
              2008                     104.3965%
              2009                     103.9080%
              2010                     103.4195%
              2011                     102.9310%
              2012                     102.4425%
              2013                     101.9540%
              2014                     101.4655%
              2015                     100.9770%
              2016                     100.4885%
              2017 and thereafter      100.0000%

 

          If the Securities are only partially redeemed pursuant to this Section
14.02, the Securities will be redeemed by lot or by any other method utilized by
the Trustee; provided, that if at the time of redemption the Securities are
             --------                                                      
registered as a Global Security, the Depositary shall determine, in accordance
with its procedures, the principal amount of such Securities held for the
account of its participants to be redeemed.  The Optional Redemption Price
shall be paid prior to 12:00 noon, New York time, on the date of such redemption
or at such earlier time as the Company determines, provided that the Company
                                                   --------                 
shall deposit with the Trustee an amount sufficient to pay the Optional
Redemption Price by 10:00 a.m., New York time, on the date such Optional
Redemption Price is to be paid.

          (b) Any redemption of Securities pursuant to Section 14.01 or Section
14.02 shall be subject to the receipt by the Company of any required regulatory
approval, including the prior approval of the Federal Reserve Board if then
required under applicable capital guidelines or policies of the Federal Reserve
Board.

          SECTION 14.03. No Sinking Fund.

          The Securities are not entitled to the benefit of any sinking fund.

          SECTION 14.04. Notice of Redemption; Selection of Securities.

          In case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 30 and

                                      71
<PAGE>
 
not more than 60 days prior to the date fixed for redemption to the holders of
Securities so to be redeemed as a whole or in part at their last addresses as
the same appear on the Security Register.  Such mailing shall be by first class
mail.  The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice.  In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.

          Each such notice of redemption shall specify the CUSIP number of the
Securities to be redeemed, the date fixed for redemption, the redemption price
at which the Securities are to be redeemed (or the method by which such
redemption price is to be calculated), the place or places of payment, that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue.  If less than all the
Securities are to be redeemed the notice of redemption shall specify the numbers
of the Securities to be redeemed.  In case any Security is to be redeemed in
part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date fixed
for redemption, upon surrender of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion thereof will be issued.

          By 10:00 a.m. New York time on the redemption date specified in the
notice of redemption given as provided in this Section, the Company will deposit
with the Trustee or with one or more paying agents an amount of money sufficient
to redeem on the redemption date all the Securities so called for redemption at
the appropriate Redemption Price, together with accrued interest to the date
fixed for redemption.

          The Company will give the Trustee notice not less than 45 days prior
to the redemption date as to the aggregate principal amount of Securities to be
redeemed and the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Securities or portions thereof (in
integral multiples of $1,000, except as otherwise set forth in the applicable
form of Security) to be redeemed.

          SECTION 14.05. Payment of Securities Called for Redemption.

          If notice of redemption has been given as provided in Section 14.04,
the Securities or portions of Securities with respect to which such notice has
been given shall become due and

                                      72
<PAGE>
 
payable on the date and at the place or places stated in such notice at the
applicable Redemption Price, together with interest accrued to the date fixed
for redemption (subject to the rights of holders of Securities on the close of
business on a regular record date in respect of an Interest Payment Date
occurring on or prior to the redemption date), and on and after said date
(unless the Company shall default in the payment of such Securities at the
Redemption Price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue.  On presentation and surrender of such Securities at a place of payment
specified in said notice, the said Securities or the specified portions thereof
shall be paid and redeemed by the Company at the applicable Redemption Price,
together with interest accrued thereon to the date fixed for redemption (subject
to the rights of holders of Securities on the close of business on a regular
record date in respect of an Interest Payment Date occurring on or prior to the
redemption date).

          Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.

          SECTION 14.06.  Conditional Right to Advance Maturity.

          If a Tax Event occurs, then the Company will have the right in lieu of
terminating Investors Capital Trust, to advance the Maturity Date of the
Securities to the minimum extent required, but not to a date earlier than
twenty years from the Issue Date, if (i) in the written opinion of counsel
experienced in such matters delivered to the Company, after advancing the
Maturity Date, interest payable on the Securities shall be deductible for
federal income tax purposes and (ii) the Company has obtained the prior approval
of the Federal Reserve Board if then required under applicable capital
guidelines or policies of the Federal Reserve Board, (the action referred to
above being referred to herein as a "Tax Event Maturity Advancement").

          If a Tax Event occurs and in the written opinion of counsel to the
Company experienced in such matters, there would in all cases, after effecting a
Tax Event Maturity Advancement, be more than an insubstantial risk that an
Adverse Tax Consequence would continue to exist, a Special Event shall be
deemed to have occurred and the Securities shall then be subject to prepayment
in accordance with the provisions of Section 14.01.  The circumstances under
which the Company has the right to prepay the Securities in connection with a
Tax Event is referred to herein as a "Conditional Tax Redemption Event".

                                      73
<PAGE>
 
                                  ARTICLE XV

                          SUBORDINATION OF SECURITIES

          SECTION 15.01. Agreement to Subordinate.

          The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.

          The payment by the Company of the principal of, premium, if any, and
interest on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all amounts with respect to Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.

          No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.

          SECTION 15.02. Default on Senior Indebtedness.

          In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Securities.

          In the event of the acceleration of the maturity of the Securities,
then no payment shall be made by the Company with respect to the principal
(including redemption payments) of or premium, if any, or interest on the
Securities until the holders of all Senior Indebtedness outstanding at the time
of such acceleration shall receive payment in full of all amounts due in respect
of such Senior Indebtedness (including any amounts due upon acceleration).

          In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraphs of this Section 15.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests

                                      74
<PAGE>
 
may appear, but only to the extent that the holders of the Senior Indebtedness
(or their representative or representatives or a trustee) notify the Trustee in
writing, within 90 days of such payment of the amounts then due and owing on
such Senior Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of such Senior Indebtedness.

          SECTION 15.03. Liquidation; Dissolution; Bankruptcy.

          Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Securities;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the
Securityholders or the Trustee would be entitled to receive from the Company,
except for the provisions of this Article XV, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Securityholders or by the Trustee
under this Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on the basis of the
                                     --- ----                                
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.

          In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been

                                      75
<PAGE>
 
issued, as their respective interests may appear, as calculated by the Company,
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all amounts in respect of such Senior Indebtedness
in full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of such
Senior Indebtedness.

          For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Securities to the payment of Senior Indebtedness that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment.  The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article X of this
Indenture.

          SECTION 15.04. Subrogation.

          Subject to the payment in full of all amounts due in respect of Senior
Indebtedness, the rights of the Securityholders shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of (and premium,
if any) and interest on the Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Securityholders or the Trustee would be entitled except for the provisions of
this Article XV, and no payment over pursuant to the provisions of this Article
XV to or for the benefit of the holders of such Senior Indebtedness by
Securityholders or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Securities, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness.  It is understood that the

                                      76
<PAGE>
 
provisions of this Article XV are and are intended solely for the purposes of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness on the other hand.

          Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Securities and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anything herein or
therein prevent the Trustee or the holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XV of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.

          SECTION 15.05. Trustee to Effectuate Subordination.

          Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.

          SECTION 15.06. Notice by the Company.

          The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article XV.  Notwithstanding the provisions
of this Article XV or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee assigned to its Principal Office shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist;

                                      77
<PAGE>
 
provided, however, that if the Trustee shall not have received the notice
--------  -------                                                        
provided for in this Section 15.06 at least two Business Days prior to the date
(i) upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Security), or (ii) moneys and/or U.S. Government
Obligations are deposited in trust pursuant to Article XI then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and U.S. Government Obligations and to apply
the same to the purposes for which they were received, and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to such date.

          The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders.  In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

          Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee and the Securityholders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.

                                      78
<PAGE>
 
          SECTION 15.07.  Rights of the Trustee; Holders of Senior Indebtedness.

          The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.

          With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee.  The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Article VI of this Indenture, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to
Securityholders, the Company or any other Person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article XV or
otherwise.

          Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.

          SECTION 15.08. Subordination May Not Be Impaired.

          No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.

          Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged,

                                      79
<PAGE>
 
mortgaged or otherwise securing such Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of such Senior Indebtedness; and
(iv) exercise or refrain from exercising any rights against the Company and any
other Person.


                                  ARTICLE XVI

                     EXTENSION OF INTEREST PAYMENT PERIOD

          SECTION 16.01. Extension of Interest Payment Period.

          So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semiannual periods, including the first such semiannual period during such
extension period (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
                                                              -------- ----   
Extended Interest Payment Period shall end on a date other than an Interest
Payment Date or extend beyond the Maturity Date.  To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 16.01, will
bear interest thereon at the Coupon Rate compounded semiannually for each
semiannual period of the Extended Interest Payment Period ("Compounded
Interest").  At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Securities, including any
Additional Interest and Compounded Interest (together, "Deferred Interest") that
shall be payable to the holders of the Securities in whose names the Securities
are registered in the Security Register on the first record date preceding the
end of the Extended Interest Payment Period.  Before the termination of any
Extended Interest Payment Period, the Company may further defer payments of
interest by further extending such period, provided that such period, together
                                           --------                           
with all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed 10 consecutive semiannual periods, including
the first such semiannual period during such Extended Interest Payment Period,
or extend beyond the Maturity Date.  Upon the termination of any Extended
Interest Payment Period and the payment of all Deferred Interest then due, the
Company may commence a new Extended Interest Payment Period, subject to the
foregoing requirements.  No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may prepay
at any time all or any portion of the interest accrued during an Extended
Interest Payment Period.

                                      80
<PAGE>
 
          SECTION 16.02.  Notice of Extension.

          (a)  If the Property Trustee is the only registered holder of the
Securities at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period five Business Days before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by Investors Capital
Trust are payable, or (ii) the date Investors Capital Trust is required to give
notice of the record date, or the date such Distributions are payable, to any
national securities exchange or to holders of the Capital Securities issued by
Investors Capital Trust, but in any event at least five Business Days before
such record date.

          (b)  If the Property Trustee is not the only holder of the Securities
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Securities and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to any national securities exchange.

          (c)  The semiannual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 10
semiannual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.

                                      81
<PAGE>
 
          THE BANK OF NEW YORK hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.

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


                              INVESTORS FINANCIAL SERVICES CORP.


                              By /s/ Karen C. Keenan
                                 ----------------------------
                                 Name:  Karen C. Keenan
                                 Title: Chief Finanical Officer



                              THE BANK OF NEW YORK,
                              as Trustee


                              By /s/ Mary Jane Morrissey
                                 ----------------------------
                                 Name:  MARY JANE MORRISSEY
                                 Title: VICE PRESIDENT
<PAGE>
 
                                   EXHIBIT A
                                   ---------

                          (FORM OF FACE OF SECURITY)


          [IF THE SECURITY IS A GLOBAL SECURITY, INSERT:   - THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

          UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]

          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW.  NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

          THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN

                                      A-1
<PAGE>
 
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S 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 THIS SECURITY 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 (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D),
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, AND (ii) PURSUANT TO
CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE REVERSE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE
COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.

                                      A-2
<PAGE>
 
No.                                                   CUSIP No. ______________

                      INVESTORS FINANCIAL SERVICES CORP.

       9.7% SERIES __ JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
                             DUE February 1, 2027

          Investors Financial Services Corp., a Delaware corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________ or registered assigns, the principal sum of _____________ Dollars
on February 1, 2027, or an such earlier date as the Company shall determine
pursuant to Section 14.06 of the Indenture (the "Maturity Date"), unless
previously redeemed, and to pay interest on the outstanding principal amount
hereof from January 31, 1997, or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, semiannually (subject to deferral as set forth herein) in
arrears on February 1 and August 1 of each year, commencing August 1, 1997 at
the rate of 9.7% per annum until the principal hereof shall have become due and
payable, and at the same rate per annum on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded semiannually.  The amount of interest payable on
any Interest Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month. In the event that any date on which the
principal of (or premium, if any) or interest on this Security is payable is not
a Business Day, then the payment 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 such
date. Pursuant to the Registration Rights Agreement, in certain limited
circumstances the Company will be required to pay Liquidated Damages (as defined
in the Registration Rights Agreement) with respect to this Security.

          The interest installment 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, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be the
date fifteen days prior to the relevant Interest Payment Date.  Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the holders on such regular record date and may be paid
to the Person in whose name this Security (or one or more Predecessor
Securities)

                                      A-3
<PAGE>
 
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the holders of Securities not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

          The principal of (and premium, if any) and interest on this Security
shall be payable at the office or agency of the Trustee maintained for that
purpose or at the office of a paying agent or paying agents as the Company may
designate from time to time in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that, payment of interest may be made at the
               --------  -------                                              
option of the Company by (i) check mailed to the holder at such address as shall
appear in the Security Register or (ii) by transfer to an account maintained by
the Person entitled thereto, provided that proper written transfer instructions
have been received by the relevant record date; provided that if this Security
is in global form, the interest hereon shall be made in immediately available
funds.  Notwithstanding the foregoing, so long as the Holder of this Security is
the Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Security will be made at such place and to such account as may
be designated by the Property Trustee.

          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 the Senior Indebted ness, 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 action as may be necessary or appropriate to acknowledge or 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, hereby 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.

          This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.

                                      A-4
<PAGE>
 
          The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.

          IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.

                              INVESTORS FINANCIAL SERVICES CORP.

                              By: ____________________________
                              Name:
                              Title


Attest:

By: _______________________
Name:
Title:



                    (FORM OF CERTIFICATE OF AUTHENTICATION)

                         CERTIFICATE OF AUTHENTICATION

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

Dated ______________

THE BANK OF NEW YORK,
as Trustee


By____________________
  Authorized Signatory

                                      A-5
<PAGE>
 
                         (FORM OF REVERSE OF SECURITY)

          This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of January
31, 1997 (the "Indenture"), duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee"), to which Indenture reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.

          Upon the occurrence and continuation of a Special Event, the Company
shall have the right at any time, within 90 days following the occurrence of a
Special Event, prior to February 1, 2007 (the "Initial Optional Redemption
Date"), to redeem this Security in whole (but not in part) at the Special Event
Redemption Price.  "Special Event Redemption Price" shall mean, with respect to
any redemption of the Securities following a Special Event, an amount in cash
equal to the greater of (i) 100% of the principal amount to be redeemed or (ii)
the sum, as determined by a Quotation Agent, of the present values of the
principal amount and premium payable with respect to an Optional Redemption (as
defined below) on the Initial Optional Redemption Date, together with scheduled
payments of interest on the Securities from the redemption date to and including
the Initial Optional Redemption Date, discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Adjusted Treasury Rate, plus, in each case, any accrued and unpaid interest
thereon, including Compounded Interest and Additional Interest, if any, to the
date of such redemption.

          In addition, the Company shall have the right to redeem this Security,
in whole or in part, at any time on or after the Initial Optional Redemption
Date (an "Optional Redemption"), at the Optional Redemption Price as set forth
below (expressed as percentages of principal to be redeemed) plus accrued and
unpaid interest thereon (including Additional Interest and Compounded Interest,
if any) to the applicable date of redemption:  if redeemed during the 12-month
period beginning February 1 of the years indicated below:

                  Year                    Percentage
                  ----                    ----------
                  2007                    104.8850%
                  2008                    104.3965%
                  2009                    103.9080%
                  2010                    103.4195%
                  2011                    102.9310%
                  2012                    102.4425%
                  2013                    101.9540%
                  2014                    101.4655%

                                      A-6
<PAGE>
 
                2015                      100.9770%
                2016                      100.4885%
                2017 and thereafter  1     00.0000%
 
          The Optional Redemption Price or the Special Event Redemption Price,
as the case requires, shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines,
provided, that the Company shall deposit with the Trustee an amount sufficient
to pay the applicable Redemption Price by 10:00 a.m., New York City time, on the
date such Redemption Price is to be paid.  Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice.
If the Securities are only partially redeemed by the Company pursuant to an
Optional Redemption, the Securities will be redeemed pro rata or by lot or by
                                                     --- ----                
any other method utilized by the Trustee; provided that if, at the time of
                                          --------                        
redemption, the Securities are registered as a Global Security, the Depositary
shall determine in accordance with its procedures the principal amount of such
Securities held for the account of its participants to be redeemed.

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

          Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the receipt by the Company of any required
regulatory approval, including the prior approval of the Federal Reserve Board
if then required under applicable capital guidelines or policies of the Federal
Reserve Board.

          If a Tax Event occurs, then the Company will have the right in lieu of
terminating Investors Capital Trust, to advance the Maturity Date of this
Security to the minimum extent required, but not to a date earlier than twenty
years from January 31, 1997 (the "Issue Date"); provided that (i) in the written
opinion of counsel experienced in such matters delivered to the Company, after
advancing the Maturity Date, interest payable on the Securities shall be
deductible for federal income tax purposes and (ii) the Company has obtained the
prior approval of the Federal Reserve Board if then required under applicable
capital guidelines or policies of the Federal Reserve Board.

          In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.

                                      A-7
<PAGE>
 
          The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the Indenture,
to execute supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
--------  -------                                                        
consent of each holder of Securities then outstanding and affected thereby, (i)
extend the Maturity Date of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture.  The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, on behalf of all of the
holders of the Securities, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
default in respect of any covenant or provision under which the Indenture cannot
be modified or amended without the consent of each holder of Securities then
outstanding.  Any such consent or waiver by the holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future holders and owners of this Security and of any
Security issued in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Security.

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the time and place and at the rate and in the money
herein prescribed.

          The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semiannual periods, including the first such semiannual period
during such extension period, and not to extend beyond the Maturity Date of the
Securities (an "Extended Interest Payment Period"), at the

                                      A-8
<PAGE>
 
end of which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Securities to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the
Company may further defer payments of interest by further extending such
Extended Interest Payment Period, provided that such Extended Interest Payment
                                  --------                                    
Period, together with all such previous and further extensions within such
Extended Interest Payment Period, shall not exceed 10 consecutive semiannual
periods, including the first semiannual period during such Extended Interest
Payment Period, shall not end on any date other than an Interest Payment Date or
extend beyond the Maturity Date of the Securities.  Upon the termination of any
such Extended Interest Payment Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements.

          The Company has agreed that it will not (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 (which
includes common and preferred 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 right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of any securities or any Subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu or junior in
right of payment to the Securities (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Common Stock of the Company; (b) any declaration of a dividend in connection
with the implementation of a stockholder's rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto; (c) payments under the Capital Securities Guarantee;
(d) as a direct result of, and only to the extent required in order to avoid the
issuance of fractional shares of capital stock following a reclassification of
the Company's capital stock or the exchange or the conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock; (e) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the exchange or conversion of such
capital stock or the security being exchanged or converted and (f) purchases of
Common Stock related to the issuance of Common Stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans) if at such time (i) an Event of Default
shall have occurred and be continuing, (ii) there shall have occurred any event
of which the Company has actual knowledge that (a) is, or with the giving of
notice or the lapse of time, or both, would

                                      A-9
<PAGE>
 
be, an Event of Default and (b) in respect of which the Company shall not have
taken reasonable steps to cure, (iii) if such Securities are held by Investors
Capital Trust, the Company shall be in default with respect to its payment
obligations under the Capital Securities Guarantee or (iv) the Company shall
have given notice of its election of the exercise of its right to extend the
interest payment period and any such extension shall be continuing.

          The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000.00 and any integral multiple of $1,000.00
above $100,000.00. As provided in the Indenture and subject to the transfer
restrictions limitations as may be contained herein and therein from time to
time, this Security is transferable by the holder hereof on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company in the City and State of New
York accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.

          Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any authenticating agent, any paying agent,
any transfer agent and the registrar may deem and treat the holder hereof as the
absolute owner hereof (whether or not this Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any authenticating agent nor any paying agent nor
any transfer agent nor any registrar shall be affected by any notice to the
contrary.

          No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the

                                     A-10
<PAGE>
 
consideration for the issuance hereof, expressly waived and released.

          All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

          THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.

                                     A-11