Document:

<PAGE>   1
                                                                     Exhibit 4.7

                       MELLON FUNDING CORPORATION, ISSUER

                                       AND

                     MELLON FINANCIAL CORPORATION, GUARANTOR

                                       TO

                          BANK ONE TRUST COMPANY, N.A.,

                                     TRUSTEE

                                    INDENTURE

                            DATED AS OF JUNE 12, 2000

                     PROVIDING FOR ISSUANCE OF SUBORDINATED

                         DEBT SECURITIES IN SERIES FROM

                                  TIME TO TIME

<PAGE>   2
                           Mellon Funding Corporation

                                       and

                          Mellon Financial Corporation

         Certain Sections of this Indenture relating to Sections 310 through
318, inclusive, of the Trust Indenture Act of 1939:

TRUST
INDENTURE
ACT SECTION                                                   INDENTURE SECTION

Section 310(a)(1)................................................709

                  (a)(2).........................................709

                  (a)(3).........................................Not Applicable

                  (a)(4).........................................Not Applicable

                  (b)............................................708

                                                                 710

Section 311(a)...................................................713

                  (b)............................................713

                  (b)(2).........................................803(a)

                                                                 803(b)

Section 312(a)...................................................801

                                                                 802(a)

                  (b)............................................802(b)

                  (c)............................................802(c)

Section 313(a)...................................................803(a)

                  (b)............................................803(a)

                  (c)............................................803(a)

                  (d)............................................803(b)

Section 314(a)...................................................804

                  (a)(4).........................................101

                                                                 1104

                  (b)............................................Not Applicable
<PAGE>   3
                  (c)(1).........................................102

                  (c)(2).........................................102

                  (c)(3).........................................Not Applicable

                  (d)............................................Not Applicable

                  (e)............................................102

Section 315(a)...................................................701

                  (b)............................................702

                                                                 803(a)

                  (c)............................................701

                  (d)............................................701

                  (e)............................................614

Section 316(a)...................................................101

                  (a)(1)(A)......................................602

                                                                 612

                  (a)(1)(B)......................................613

                  (a)(2).........................................Not Applicable

                  (b)............................................608

                  (c)............................................104(c)

Section 317(a)(1)................................................603

                  (a)(2).........................................604

                  (b)............................................1103

Section 318(a)    ...............................................107

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

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

RECITALS OF THE COMPANY .......................................................1

RECITALS OF THE GUARANTOR .....................................................1

                                   ARTICLE ONE

             DEFINITIONS and OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101.      Definitions..................................................2
<PAGE>   4
         Act ..................................................................2
         Affiliate.............................................................2
         Authenticating Agent .................................................2
         Bank..................................................................2
         Board of Directors....................................................2
         Board Resolution......................................................3
         Business Day..........................................................3
         Commission............................................................3
         Company ..............................................................3
         Company Request, Company Order, Guarantor Request and Guarantor
           Order...............................................................3
         Corporate Trust Office................................................3
         Corporation...........................................................3
         Covenant Defeasance...................................................3
         Default...............................................................3
         Defaulted Interest ...................................................3
         Defeasance............................................................3
         Depositary............................................................4
         Event of Default......................................................4
         Floating or Adjustable Rate Provision ................................4
         Floating or Adjustable Rate Security..................................4
         Global Security ......................................................4
         Guarantee.............................................................4
         Guarantor ............................................................4
         Holder ...............................................................4
         Indenture.............................................................4
         Interest .............................................................4
         Interest Payment Date ................................................5
         Maturity .............................................................5
         Officers' Certificate ................................................5
         Opinion of Counsel ...................................................5
         Original Issue Discount ..............................................5
         Outstanding ..........................................................5
         Paying Agent .........................................................6
         Periodic Offering ....................................................6
         Person................................................................6
         Place of Payment......................................................6
         Predecessor Security .................................................7
         Redemption Date ......................................................7
         Redemption Price .....................................................7
         Regular Record Date ..................................................7
         Securities ...........................................................7
         Security Register; Security Registrar.................................7
         Senior Indebtedness of the Company ...................................7
         Senior Indebtedness of the Guarantor .................................7
         Special Record Date...................................................8
         Stated Maturity.......................................................8
<PAGE>   5
         Subsidiary............................................................8
         Trustee...............................................................8
         Trust Indenture Act...................................................8
         U.S. Government Obligation ...........................................8
         Vice President........................................................8
         Voting Stock of the Company...........................................8

SECTION 102.      Compliance Certificates and Opinions.........................9

SECTION 103.      Form of Documents Delivered to Trustee.......................9

SECTION 104.      Acts of Holders; Record Dates...............................10

SECTION 105.      Notices, Etc., to Trustee, Company and Guarantor............11

SECTION 106.      Notice to Holders; Waiver...................................11

SECTION 107.      Conflict with Trust Indenture Act...........................12

SECTION 108.      Effect of Headings and Table of Contents....................12

SECTION 109.      Successors and Assigns......................................12

SECTION 110.      Separability Clause.........................................12

SECTION 111.      Benefits of Indenture.......................................13

SECTION 112.      Governing Law...............................................13

SECTION 113.      Legal Holidays..............................................13

                                   ARTICLE TWO

                       FORMS OF SECURITIES AND GUARANTEES

SECTION 201.      Forms Generally.............................................14

SECTION 202.      Form of Face of Security....................................14

SECTION 203.      Form of Reverse of Security.................................17

SECTION 204.      Additional Provisions Required in Global Security...........20

SECTION 205.      Form of Certificate of Authentication.......................21

SECTION 206.      Form of Guarantee...........................................22

                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301.      Amount Unlimited; Issuable in Series........................25

SECTION 302.      Denominations...............................................28

SECTION 303.      Execution, Authentication, Delivery and Dating..............28

SECTION 304.      Temporary Securities........................................31
<PAGE>   6
SECTION 305.      Registration, Registration of Transfer and Exchange.........31

SECTION 306.      Mutilated, Destroyed, Lost and Stolen Securities............33

SECTION 307.      Payment of Interest; Interest Rights Preserved..............34

SECTION 308.      Persons Deemed Owners.......................................35

SECTION 309.      Cancellation................................................35

SECTION 310.      Computation of Interest.....................................36

                                  ARTICLE FOUR

                           GUARANTEE OF SECURITIES 37

SECTION 401.      Unconditional Guarantee.....................................37

SECTION 402.      Execution of Guarantees.....................................38

                                  ARTICLE FIVE

                           SATISFACTION AND DISCHARGE

SECTION 501.      Satisfaction and Discharge of Indenture.....................39

SECTION 502.      Application of Trust Money..................................40

                                   ARTICLE SIX

                                   REMEDIES 41

SECTION 601.      Events of Default...........................................41

SECTION 602.      Acceleration of Maturity; Rescission and Annulment..........42

SECTION 603.      Collection of Indebtedness and Suits for Enforcement by
                  Trustee.....................................................43

SECTION 604.      Trustee May File Proofs of Claim............................44

SECTION 605.      Trustee May Enforce Claims Without Possession of
                  Securities..................................................45

SECTION 606.      Application of Money Collected..............................45

SECTION 607.      Limitation on Suits.........................................46

SECTION 608.      Unconditional Right of Holders to Receive Principal,
                  Premium and Interest........................................46

SECTION 609.      Restoration of Rights and Remedies..........................47

SECTION 610.      Rights and Remedies Cumulative..............................47

SECTION 611.      Delay or Omission Not Waiver................................47

SECTION 612.      Control by Holders..........................................47

SECTION 613.      Waiver of Past Defaults.....................................48

SECTION 614.      Undertaking for Costs.......................................49
<PAGE>   7
SECTION 615.      Waiver of Stay or Extension Laws............................49

                                  ARTICLE SEVEN

                                   THE TRUSTEE

SECTION 701.      Certain Duties and Responsibilities.........................50

SECTION 702.      Notice of Defaults..........................................50

SECTION 703.      Certain Rights of Trustee...................................50

SECTION 704.      Not Responsible for Recitals or Issuance of Securities and
                  Guarantees..................................................52

SECTION 705.      May Hold Securities.........................................52

SECTION 706.      Money Held in Trust.........................................52

SECTION 707.      Compensation and Reimbursement..............................52

SECTION 708.      Disqualification; Conflicting Interests.....................53

SECTION 709.      Corporate Trustee Required; Eligibility.....................53

SECTION 710.      Resignation and Removal; Appointment of Successor. .........53

SECTION 711.      Acceptance of Appointment by Successor......................55

SECTION 712.      Merger, Conversion, Consolidation or Succession to
                  Business....................................................56

SECTION 713.      Preferential Collection of Claims Against Company and
                  Guarantor...................................................56

SECTION 714.      Appointment of Authenticating Agent.........................57

                                  ARTICLE EIGHT

          HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR

SECTION 801.      Company and Guarantor to Furnish Trustee Names and
                  Addresses of Holders........................................59

SECTION 802.      Preservation of Information; Communications to Holders. ....59

SECTION 803.      Reports by Trustee. ........................................60

SECTION 804.      Reports by Company and Guarantor. ..........................60

                                  ARTICLE NINE

                         CONSOLIDATION, MERGER AND SALE

SECTION 901.      Company May Consolidate, Etc., Only on Certain Terms........61

SECTION 902.      Successor Corporation Substituted for Company...............62

SECTION 903.      Guarantor May Consolidate, Etc., Only on Certain Terms......62

SECTION 904.      Successor Corporation Substituted for Guarantor.............63

SECTION 905.      Assumption by Guarantor.....................................63
<PAGE>   8
                                   ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

SECTION 1001.     Supplemental Indentures Without Consent of Holders..........64

SECTION 1002.     Supplemental Indentures With Consent of Holders.............65

SECTION 1003.     Execution of Supplemental Indentures........................66

SECTION 1004.     Effect of Supplemental Indentures...........................67

SECTION 1005.     Conformity with Trust Indenture Act.........................67

SECTION 1006.     Reference in Securities to Supplemental Indentures..........67

                                 ARTICLE ELEVEN

                                    COVENANTS

SECTION 1101.     Payment of Principal, Premium and Interest..................68

SECTION 1102.     Maintenance of Office or Agency.............................68

SECTION 1103.     Money for Securities Payments to Be Held in Trust...........68

SECTION 1104.     Corporate Existence.........................................70

SECTION 1105.     Company Statement as to Compliance..........................70

SECTION 1106.     Guarantor Statement as to Compliance........................70

SECTION 1107.     Limitation Upon Disposition of Voting Stock of Company......71

SECTION 1108.     Waiver of Certain Covenants.................................71

                                 ARTICLE TWELVE

                            REDEMPTION OF SECURITIES

SECTION 1201.     Applicability of Article....................................73

SECTION 1202.     Election to Redeem; Notice to Trustee.......................73

SECTION 1203.     Selection by Security Registrar of Securities to Be
                  Redeemed....................................................73

SECTION 1204.     Notice of Redemption........................................74

SECTION 1205.     Deposit of Redemption Price.................................74

SECTION 1206.     Securities Payable on Redemption Date.......................75

SECTION 1207.     Securities Redeemed in Part.................................75

                                ARTICLE THIRTEEN

                                  SINKING FUNDS

SECTION 1301.     Applicability of Article....................................76
<PAGE>   9
SECTION 1302.     Satisfaction of Sinking Fund Payments with Securities.......76

SECTION 1303.     Redemption of Securities for Sinking Fund...................76

                                ARTICLE FOURTEEN

                   SUBORDINATION OF SECURITIES AND GUARANTEES

SECTION 1401.     Securities Subordinate to Senior Indebtedness of the
                  Company.....................................................78

SECTION 1402.     Guarantees Subordinate to Senior Indebtedness of the
                  Guarantor...................................................80

SECTION 1403.     Trustee and Holders of Securities May Rely on Certificate
                  of Liquidating Agent; Trustee May Require Further Evidence
                  as to Ownership of Senior Indebtedness; Trustee Not
                  Fiduciary to Holders of Senior Indebtedness.................82

SECTION 1404.     Payment Permitted If No Default.............................83

SECTION 1405.     Trustee Not Charged with Knowledge of Prohibition...........84

SECTION 1406.     Trustee to Effectuate Subordination.........................84

SECTION 1407.     Rights of Trustee as Holder of Senior Indebtedness of the
                  Company or Senior Indebtedness of the Guarantor.............84

SECTION 1408.     Article Applicable to Paying Agents.........................85

                                 ARTICLE FIFTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1501.     Company's Option To Effect Defeasance Or Covenant
                  Defeasance..................................................86

SECTION 1502.     Defeasance And Discharge....................................86

SECTION 1503.     Covenant Defeasance.........................................86

SECTION 1504.     Conditions To Defeasance Or Covenant Defeasance.............87

SECTION 1505.     Deposited Money And U.S. Government Obligations To Be Held
                  In Trust; Miscellaneous Provisions..........................89

SECTION 1506.     Reinstatement...............................................90

TESTIMONIAL

SIGNATURES AND SEALS

ACKNOWLEDGEMENTS

<PAGE>   10
         INDENTURE, dated as of June 12, 2000, among Mellon Funding Corporation,
a corporation duly organized and existing under the laws of the Commonwealth of
Pennsylvania having its principal executive office at 500 Grant Street,
Pittsburgh, Pennsylvania 15258 (herein called the "Company"), Mellon Financial
Corporation, a corporation duly organized and existing under the laws of the
Commonwealth of Pennsylvania having its principal executive office at 500 Grant
Street, Pittsburgh, Pennsylvania 15258 (herein called the "Guarantor"), and Bank
One Trust Company, N.A.          , a national banking association duly organized
and existing under the laws of the United States of America having its principal
corporate office at One North State Street, 9th Floor, Chicago, Illinois, as
Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

         The Company deems it necessary to issue its unsecured debentures, notes
or other evidences of indebtedness (herein called the "Securities") from time to
time for its lawful purposes and has duly authorized the execution and delivery
of this Indenture to provide for the issuance of such Securities in one or more
series and at such time or times as in this Indenture provided.

         All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

                            RECITALS OF THE GUARANTOR

         The Guarantor has duly authorized the Guarantees provided for herein,
and to provide therefor the Guarantor has duly authorized the execution and
delivery of this Indenture.

         All things necessary to make the Guarantees, when endorsed on the
Securities to which they relate and executed by the Guarantor, the valid
obligations of the Guarantor, and to make this Indenture a valid agreement of
the Guarantor, in accordance with their and its terms, have been done.

                   Now, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:

                                       1
<PAGE>   11
                                   ARTICLE ONE

             DEFINITIONS and OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101.      Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
         assigned to them in this Article and include the plural as well as the
         singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture Act, either directly or by reference therein, have the
         meanings assigned to them therein; and

                  (3) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision.

         "Act", when used with respect to any Holder, has the meaning specified
in Section 104.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 714 to act on behalf of the Trustee to authenticate
Securities of one or more series.

         "Bank" means Mellon Bank, N.A., and any successor or successors
thereto.

         "Board of Directors" means the board of directors of the Company or of
the Guarantor, as the case may be, or any duly authorized committee of such
board.

                                       2
<PAGE>   12
         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or the Guarantor, as the case
may be, to have been duly adopted by its Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.

         "Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are generally authorized or
obligated by law or executive order to close.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

         "Company Request", "Company Order", "Guarantor Request" and "Guarantor
Order" mean, respectively, a written request or order signed in the name of the
Company or the Guarantor by the Chairman of the Board, a Vice Chairman, the
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.

         "Corporate Trust Office" means the principal corporate trust office of
the Trustee, Security Registrar, Paying Agent or Authenticating Agent, as the
case may be, at which at any particular time its corporate trust business shall
be administered; at the date hereof the Corporate Trust Office of the Trustee is
located at One North State Street, 9th Floor, Chicago, Illinois 60602,
Attention: Corporate Trust Department.

         "Corporation" means a corporation, association, company or business
trust.

         "Covenant Defeasance" has the meaning specified in Section 1503.

         "Default" has the meaning specified in Section 603.

         "Defaulted Interest" has the meaning specified in Section 307.

         "Defeasance" has the meaning specified in Section 1502.

                                       3
<PAGE>   13
         "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary for such series by the Company
pursuant to Section 301.

         "Event of Default" has the meaning specified in Section 601.

         "Floating or Adjustable Rate Provision" means a formula or provision,
specified in a Board Resolution of the Company or an indenture supplemental
hereto, providing for the determination, whether pursuant to objective factors
or pursuant to the sole discretion of any Person (including the Company, the
Guarantor or the Bank), and periodic adjustment of the interest rate per annum
borne by a Floating Rate Security.

         "Floating or Adjustable Rate Security" means any Security which
provides for interest to be payable thereon at a rate per annum that may vary
from time to time over the term thereof in accordance with a Floating or
Adjustable Rate Provision.

         "Global Security" means a Security bearing the legend specified in
Section 204 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or nominee.

         "Guarantee" means the Guarantor's unconditional guarantee of the
payment of the Securities as more fully described in Article Four.

         "Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor corporation.

         "Holder" means a Person in whose name a Security is registered in the
Security Register.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

         "Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

                                       4
<PAGE>   14
         "Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

         "Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice-Chairman, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company or the Guarantor, as the case may be, and delivered to the Trustee.

         "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or the Guarantor, or who may be other
counsel, acceptable to the Trustee.

         "Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 602.

         "Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

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

                  (ii) Securities or portions thereof for whose payment or
         redemption money in the necessary amount has been theretofore deposited
         with the Trustee or any Paying Agent (other than the Company) in trust
         or set aside and segregated in trust by the Company (if the Company
         shall act as its own Paying Agent) for the Holders of such Securities;
         provided that, if such Securities or portions thereof are to be
         redeemed, notice of such redemption has been duly given pursuant to
         this Indenture or provision therefor satisfactory to the Trustee has
         been made; and

                  (iii) Securities which have been paid pursuant to Section 306
         or in exchange for or in lieu of which other Securities have been
         authenticated and delivered pursuant to this Indenture, other than any
         such Securities in respect of which there shall have been

                                       5
<PAGE>   15
         presented to the Trustee proof satisfactory to it that such Securities
         are held by a bona fide purchaser;

                  (iv) Securities as to which Defeasance has been effected
         pursuant to Section 1502; provided, however, that in determining
         whether the Holders of the requisite principal amount of the
         Outstanding Securities have given any request, demand, authorization,
         direction, notice, consent or waiver hereunder, (i) the principal
         amount of an Original Issue Discount Security that shall be deemed to
         be Outstanding shall be the amount of the principal thereof that would
         be due and payable as of the date of such determination upon
         acceleration of the Maturity thereof pursuant to Section 602, (ii) the
         principal amount of a security denominated in a foreign currency or
         currencies shall be the U.S. dollar equivalent, determined on the date
         of original issuance of such Security, of the principal amount (or, in
         the case of an Original Issue Discount Security, the U.S. dollar
         equivalent on the date of original issuance of such Security of the
         amount determined as provided in (i) above) of such Security, and (iii)
         Securities owned by the Company, the Guarantor or any other obligor
         upon the Securities or any Affiliate of the Company or of the Guarantor
         or of such other obligor shall be disregarded and deemed not to be
         Outstanding, except that, in determining whether the Trustee shall be
         protected in relying upon any such request, demand, authorization,
         direction, notice, consent or waiver, only Securities which the Trustee
         knows to be so owned shall be so disregarded. Securities so owned which
         have been pledged in good faith may be regarded as Outstanding if the
         pledgee establishes to the satisfaction of the Trustee the pledgee's
         right so to act with respect to such Securities and that the pledgee is
         not the Company, the Guarantor or any other obligor upon the Securities
         or any Affiliate of the Company or the Guarantor or of such other
         obligor.

         "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.

         "Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities including without limitation
the rate or rates of interest, if any, thereon, the Stated Maturity or
Maturities thereof, and the redemption provisions, if any, with respect thereto,
are to be determined by the Company or its agents upon the issuance of such
Securities.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "Place of Payment", when used with respect to the Securities of any
series and subject to Section 1102, means the place or places where the
principal of and any premium and interest on the Securities of that series are
payable as specified as contemplated by Section 301.

                                       6
<PAGE>   16
         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

         "Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

         "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

         "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

         "Senior Indebtedness of the Company" means any obligation of the
Company to its creditors, whether now outstanding or subsequently incurred,
except (i) the 9 3/4% Subordinated Debentures Due 2001, the 9 1/4% Subordinated
Debentures Due 2001 and the 6 7/8% Subordinated Debentures due March 1, 2003,
each issued under the indenture, dated as of April 15, 1991, as amended, among
the Guarantor, the Company and U.S. Bank Trust National Association, as
successor to Continental Bank, National Association, as trustee, and all other
notes and obligations that may be issued under such indenture, as the same may
be amended from time to time, (ii) any obligation as to which in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligation is not Senior Indebtedness; and (iii)
obligations evidenced by the Securities.

         "Senior Indebtedness of the Guarantor" means any obligation of the
Guarantor to its creditors, whether now outstanding or subsequently incurred,
except (i) the guarantee of the Guarantor of the 9 3/4% Subordinated Debentures
Due 2001, the 9 1/4% Subordinated Debentures Due 2001 and the 6 7/8%
Subordinated Debentures due March 1, 2003, each issued under the indenture,
dated as of April 15, 1991, as amended, among the Guarantor, the Company and
U.S. Bank Trust National Association, as successor to Continental Bank, National
Association, as trustee, and all guarantees of the Guarantor of any other notes
or obligations which may be issued under such indenture, as the same may be
amended from time to time; (ii)

                                       7
<PAGE>   17
any obligation as to which, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such obligation
is not Senior Indebtedness; and (iii) obligations evidenced by the Guarantees.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

         "Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

         "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or the
Guarantor, as the case may be, or by one or more other of its Subsidiaries, or
by the Company or the Guarantor, as the case may be, and one or more other of
its Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

         "U.S. Government Obligation" has the meaning specified in Section 1504.

         "Vice President", when used with respect to the Company, the Guarantor
or the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".

         "Voting Stock of the Company" means stock of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the Board of Directors of the Company, other than stock having such power
only by reason of the happening of any contingency.

                                       8
<PAGE>   18
SECTION 102.      Compliance Certificates and Opinions.

         Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company or the Guarantor to the Trustee to take
any action under any provision of this Indenture, the Company or the Guarantor,
as the case may be, shall furnish to the Trustee such certificates and opinions
as may be required under the Trust Indenture Act. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be given
by an officer of the Company or the Guarantor, or an Opinion of Counsel, if to
be given by counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirements set forth in this Indenture.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                  (1) a statement that each individual signing such certificate
         or opinion has read such covenant or condition and the definitions
         herein relating thereto;

                  (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3) a statement that, in the opinion of each such individual,
         he has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and

                  (4) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

SECTION 103.      Form of Documents Delivered to Trustee.

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

         Any certificate or opinion of an officer of the Company or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the

                                       9
<PAGE>   19
certificate or opinion or representations with respect to the matters upon which
his certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company or the Guarantor, as the case may be, stating that the information
with respect to such factual matters is in the possession of the Company or the
Guarantor, as the case may be, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 104.      Acts of Holders; Record Dates.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantor. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 701) conclusive in favor of
the Trustee and the Company and the Guarantor, if made in the manner provided in
this Section.

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

         (c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section

                                       10
<PAGE>   20
801) prior to such first solicitation or vote, as the case may be. With regard
to any record date for action to be taken by the Holders of one or more series
of Securities, only the Holders of Securities of such series on such date (or
their duly designated proxies) shall be entitled to give or take, or vote on,
the relevant action.

         (d) The ownership of Securities shall be proved by the Security
Register.

         (e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Paying Agent, any Security Registrar, any Authenticating Agent, the Company or
the Guarantor in reliance thereon, whether or not notation of such action is
made upon such Security.

SECTION 105.      Notices, Etc., to Trustee, Company and Guarantor.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company or the
         Guarantor shall be sufficient for every purpose hereunder if made,
         given, furnished or filed in writing to or with the Trustee at its
         Corporate Trust Office, Attention: Corporate Trust Department, or

                  (2) the Company or the Guarantor by the Trustee or by any
         Holder shall be sufficient for every purpose hereunder (unless
         otherwise herein expressly provided) if in writing and mailed,
         first-class postage prepaid, to the Company or the Guarantor, as the
         case may be, addressed to the attention of its Secretary at the address
         of its principal office specified in the first paragraph of this
         instrument or at any other address previously furnished in writing to
         the Trustee by the Company or the Guarantor.

SECTION 106.      Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where

                                       11
<PAGE>   21
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 107.      Conflict with Trust Indenture Act.

         If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

SECTION 108.      Effect of Headings and Table of Contents.

         The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof,

SECTION 109.      Successors and Assigns.

         All covenants and agreements in this Indenture by the Company and the
Guarantor shall bind their respective successors and assigns, whether so
expressed or not.

SECTION 110.      Separability Clause.

         In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

                                       12
<PAGE>   22
SECTION 111.      Benefits of Indenture.

         Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Paying Agent, any Security Registrar, any Authenticating Agent,
the holders of Senior Indebtedness of the Company and the Guarantor and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.

SECTION 112.      Governing Law.

         This Indenture, the Securities and the Guarantees shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
except that the rights, immunities, duties and liabilities of the Trustee as a
trustee and any rights and immunities limiting such liability shall be governed
by the laws of the State of Illinois.

SECTION 113.      Legal Holidays.

         In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section) ) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

                                       13
<PAGE>   23
                                   ARTICLE TWO

                       FORMS OF SECURITIES AND GUARANTEES

SECTION 201.      Forms Generally.

         The Securities of each series and the Guarantees relating thereto shall
be in substantially the form set forth in this Article, or in such other form as
shall be established by or pursuant to a Board Resolution of the Company, in the
case of Securities, and of the Guarantor, in the case of Guarantees, or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities
or Guarantees, as evidenced by their execution thereof. If the form of
Securities of any series or the Guarantees relating thereto is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company or the Guarantor, as the case may be, and delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of the Securities of such series initially delivered
by the Company to the Trustee.

         The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.

         The definitive Securities of any series shall be printed, lithographed
or engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which such Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.

SECTION 202.      Form of Face of Security.

         [If the Security is an Original Issue Discount Security, insert--FOR
PURPOSES OF SECTION 1232 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1954, AS
AMENDED, THE ISSUE PRICE OF THIS SECURITY IS.......% OF ITS PRINCIPAL AMOUNT AND
THE ISSUE DATE IS.................., 19.......]

                                       14
<PAGE>   24
                           MELLON FUNDING CORPORATION

         No. $

         Mellon Funding Corporation, a corporation duly organized and existing
under the laws of the Commonwealth of Pennsylvania (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to or registered
assigns, the principal sum of         Dollars on           .

         [If the Security is to bear interest prior to Maturity, insert--, and
to pay interest thereon from          or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on and
           in each year, commencing             , at [If the Security is to bear
interest at a fixed rate, insert--the rate of % per annum,] [If the Security is
a Floating or Adjustable Rate Security insert-- a rate per annum
[computed--determined] in accordance with the [insert defined name of Floating
or Adjustable Rate Provision] set forth below], until the principal hereof is
paid or made available for payment [If applicable insert--, and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of %
per annum on any overdue principal and premium and on any overdue installment of
interest]. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the              or             (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.

         [At this point in the Form of Security of any series of Floating or
Adjustable Rate Securities, the text of the Floating or Adjustable Rate
Provision relating thereto should be inserted.]

         [If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is

                                       15
<PAGE>   25
not so paid on demand shall bear interest at the rate of % per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]

         Payment of the principal of (and premium, if any) and [if applicable,
insert--any such] interest on this Security will be made at the office or agency
of the Company maintained for that purpose in [insert at least one Place of
Payment] [if applicable, insert-- and [if applicable, insert--, with respect to
principal (and premium, if any) only,] at the office or agency of the Company
maintained for that purpose in [insert one or more additional Places of
Payment]], in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.

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

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, or an Authenticating Agent, by
manual signature, neither this Security nor the Guarantee endorsed hereon shall
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

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

         Dated: MELLON FUNDING CORPORATION

         By:

                  [Authorized Signature]

         Attest:

                  [Authorized Signature]

                                       16
<PAGE>   26
SECTION 203.      Form of Reverse of Security.

         This Security is one of a duly authorized series of Securities of the
Company (herein called the "Securities"), of the series hereinafter specified,
issued and to be issued under an Indenture, dated as of        , 2000 (herein
called the "Indenture"), among the Company, the Guarantor and Bank One Trust
Company, N.A., as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee, the holders of Senior Indebtedness of
the Company and the Guarantor and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities may be issued in different series, as in the Indenture provided. This
Security is one of the series designated on the face hereof, issued under and
entitled to the benefits of the Indenture [and limited (except as otherwise
provided in the Indenture) to an aggregate principal amount of $      ].

         [If applicable, insert--The Securities of this series are redeemable at
the option of the Company, upon not less than 30 days nor more than 60 days
notice by mail, [if applicable, insert--(1) on       in any year commencing with
the year    and ending with the year     through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after       , 19  ,] as a whole or from time to time in
part, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before         ,   %, and if redeemed]
during the 12-month period beginning of the years indicated,

         YEAR        REDEMPTION PRICE      YEAR       REDEMPTION PRICE
         ----        ----------------      ----       ----------------

and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [if applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

         [If applicable, insert--The Securities of this series are redeemable at
the option of the Company upon not less than 30 days nor more than 60 days
notice by mail, (1) on         in any year commencing with the year and ending
with the year      through operation of the sinking

                                       17
<PAGE>   27
fund for this series at the Redemption Prices for redemption through operation
of the sinking fund (expressed as percentages of the principal amount) set forth
in the table below, and (2) at any time [on or after              ], as a whole
or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning                    of the years indicated,

                               REDEMPTION PRICE
                                FOR REDEMPTION               REDEMPTION PRICE
                                   THROUGH                 REDEMPTION OTHERWISE
                                  OPERATION                    THAN THROUGH
                                    OF THE                   OPERATION OF THE
               YEAR              SINKING FUND                  SINKING FUND
               ----              ------------                  ------------

         and thereafter at a Redemption Price equal to   % of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

         [Notwithstanding the foregoing, the Company may not, prior to , redeem
any Securities of this series as contemplated by [Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than   % per annum.]

         [The sinking fund for this series provides for the redemption on in
each year beginning with the year     and ending with the year of [not less
than] $        [("mandatory sinking fund") and not more than $      ] aggregate
principal amount of Securities of this series. [Securities of this series
acquired or redeemed by the Company otherwise than through [mandatory] sinking
fund payments may be credited against subsequent [mandatory] sinking fund
payments otherwise required to be made--in the inverse order in which they
become due.]

         In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof or any transferee
designated by such Holder upon the cancellation hereof.

         [If the Security is not an Original Issue Discount Security,--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of

                                       18
<PAGE>   28
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.]

         [If the Security is an Original Issue Discount Security,--If an Event
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]

         The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness of the Company, 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 behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of not less than 66
2/3% in aggregate principal amount of the Securities at the time Outstanding of
each series to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company or the
Guarantor with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

         The Guarantor, or a Subsidiary thereof, may directly assume, by a
supplemental indenture, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities, in which case the Company
shall be released from its liability as obligor on the Securities.

         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

                                       19
<PAGE>   29
the principal of (and premium, if any) and interest on this Security at the
times, places and [rate--rates], and in the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at
[the--each] office or agency of the Company, in [the--each] place referred to on
the face hereof, where the principal of (and premium, if any) and interest on
[if applicable, insert--, or the principal (and premium, if any) only of,] this
Security are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

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

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

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

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

SECTION 204.      Additional Provisions Required in Global Security.

         Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 2.02 and 2.03, bear a legend in substantially
the following form:

         "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES OF
THIS SERIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT

                                       20
<PAGE>   30
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF SUCH A TRANSFERROR TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF SUCH A TRANSFEREE OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF SUCH A TRANSFERROR AND ANY PAYMENT
IS MADE TO SUCH A TRANSFEREE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
SUCH A TRANSFERROR, HAS AN INTEREST HEREIN."

SECTION 205.      Form of Certificate of Authentication.

         The certificates of authentication shall be in substantially the
following form:

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

         BANK ONE TRUST COMPANY, N.A. as Trustee

         By

                  Authorized Signatory

         BANK ONE TRUST COMPANY, N.A. as Trustee

                                       21
<PAGE>   31
SECTION 206.      Form of Guarantee.

         The form of Guarantee to be endorsed on all Securities shall be
substantially as follows:

                                    GUARANTEE

                                       OF

                          MELLON FINANCIAL CORPORATION

         For value received, Mellon Financial Corporation, a corporation duly
organized and existing under the laws of the Commonwealth of Pennsylvania
(herein called the "Guarantor"), hereby unconditionally guarantees to the Holder
of the Security upon which this Guarantee is endorsed the due and punctual
payment of the principal of (and premium, if any) and interest on [if the
Security upon which the Guarantee is endorsed is not to bear interest prior to
Maturity, insert--any overdue principal of] said Security [if applicable,
insert--and the due and punctual payment of the sinking fund payments required
with respect to said Security,] when and as the same shall become due and
payable, whether at maturity, by acceleration or redemption or otherwise,
according to the terms thereof and of the Indenture referred to therein. In case
of the failure of Mellon Funding Corporation or any successor thereto (the
"Company") punctually to pay any such principal, premium [, --or] interest [or
sinking fund payment], the Guarantor hereby agrees to cause any such payment to
be made punctually when and as the same shall become due and payable, whether at
maturity, upon acceleration or redemption or otherwise, and as if such payment
were made by the Company.

         The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
unenforceability of said Security or said Indenture, any failure to enforce the
provisions of said Security or said Indenture, or any waiver, modification,
consent or indulgence granted to the Company with respect thereto, by the Holder
of said Security or the Trustee under said Indenture, the recovery of any
judgment against the Company or any action to enforce the same, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger, insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to said Security or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged except by payment in full of the principal, premium, if
any, [or] interest on [any overdue principal of] [or any sinking fund payment
required with respect to] said Security and the complete performance of all
other obligations contained in said Security.

         The Guarantor shall be subrogated to all rights of the Holder of said
Security against the Company in respect of any amounts paid to such Holder by
the Guarantor pursuant to the

                                       22
<PAGE>   32
provisions of this Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce, or to receive any payments arising out of or based upon,
such right of subrogation until the principal of (and premium, if any) and
interest on [any overdue principal of] [and the sinking fund payments required
with respect to] all Securities issued under said Indenture shall have been paid
in full.

         Subject to the next following paragraph, the Guarantor hereby certifies
and warrants that all acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor have
been done and performed and have happened in due compliance with all applicable
laws.

         Claims under this Guarantee are, to the extent provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness of the Guarantor, and this Guarantee is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
a Security upon which this Guarantee is endorsed, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.

         This Guarantee shall not be valid or become obligatory for any purpose
until the certificate of authentication on said Security shall have been signed
manually by or on behalf of the Trustee under said Indenture.

         This Guarantee shall be deemed to be a contract made under the laws of
the Commonwealth of Pennsylvania, and for all purposes shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
except as otherwise required by mandatory provisions of law.

         IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed in facsimile by its duly authorized officer under its corporate seal.

         MELLON FINANCIAL CORPORATION [Date of initial issuance of series]

         By:

                  [Authorized Signature]

                                       23
<PAGE>   33
         Attest:

                  [Authorized Signature]

                                       24
<PAGE>   34
                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301.      Amount Unlimited; Issuable in Series.

         The aggregate principal amount of Securities which may be authenticated
and delivered and may be Outstanding under this Indenture is unlimited.

         The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution of the Company, and, subject to
Section 3.03, set forth or determined in the manner provided, in an Officers'
Certificate of the Company, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,

         (1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all Securities of any other series);

         (2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 1006 or 1207 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);

         (3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;

         (4) the date or dates on which the principal of the Securities of the
series is payable;

         (5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the Floating or Adjustable Rate Provision pursuant to which
such rates are determined, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable and
the Regular Record Date for the interest payable on any Interest Payment Date;

         (6) the place or places where the principal of (and premium, if any)
and interest on, or the principal (and premium, if any) only of, Securities of
the series shall be payable;

                                       25
<PAGE>   35
         (7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;

         (8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of
the series shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;

         (9) if other than denominations of $100,000 and any integral multiple
of $1,000 in excess thereof, the denominations in which Securities shall be
issuable;

         (10) any other event or events of default applicable with respect to
Securities of the series in addition to those provided in Section 601;

         (11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 6.02;

         (12) any other covenant or warranty included for the benefit of
Securities of the series in addition to (and not inconsistent with) those
included in this Indenture for the benefit of Securities of all series;

         (13) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Security or Securities, which Depositary shall be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended;

         (14) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the Securities
of the series shall be payable if other than the currency of the United States
of America and the manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the definition of "Outstanding"
in Section 1.01;

         (15) if the amount of payments of principal of and any premium or
interest on the Securities of the series may be determined with reference to an
index, the manner in which such amounts shall be determined;

                                       26
<PAGE>   36
         (16) if the principal of (and premium, if any) or interest on the
Securities of the series are to be payable, at the election of the Company or a
Holder thereof, in a coin or currency other than that in which the Securities
are stated to be payable, the coin or currency in which payment of the principal
of (and premium, if any) or interest on Securities of such series as to which
such election is made shall be payable, the period or periods within which, and
the terms and conditions upon which, such election may be made;

         (17) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 15.02 or Section 15.03
or both such Sections, any provisions to permit a pledge of obligations other
than U.S. Government Obligations (or the establishment of other arrangements) to
satisfy the requirements of Section 15.04(1) for defeasance of such Securities
and, if other than by a Board Resolution, the manner in which any elections by
the Company to defease such Securities shall be evidenced;

         (18) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 1001(5)).

         The payment of principal and premium, if any, and interest and sinking
fund payments, if any, on or relating to the Securities of each series shall be
unconditionally guaranteed by the Guarantor.

         Unless otherwise provided in or pursuant to such Board Resolution of
the Company and set forth in such Officers' Certificate of the Company or in any
such indenture supplemental hereto, if Securities of any series are to be
redeemed they may be redeemed with funds from any source, including without
limitation proceeds from the sale of one or more series of Securities.

         All Securities of any one series shall be substantially identical
except for necessary or proper variations between temporary and definitive
Securities or Securities of different denominations and except as may otherwise
be provided in or pursuant to the Board Resolution referred to above and
(subject to Section 303) set forth in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

         If any of the terms of the Securities of a series are established by
action taken pursuant to a Board Resolution of the Company, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate of the Company setting forth the terms
of the Securities of such series. With respect to Securities of a series offered
in a Periodic Offering, such Board Resolution or action may provide general
terms or parameters for Securities of such series and provide either that the
specific terms of particular Securities of such series shall be specified in a
Company Order or that such terms shall be determined by the Company or its
agents in accordance with a Company Order as contemplated by the first proviso
of the third paragraph of Section 3.03.

                                       27
<PAGE>   37
         The Securities of each series and the Guarantees endorsed thereon shall
be subordinated in right of payment to Senior Indebtedness of the Company and
the Guarantor, respectively, as provided in Article Fourteen.

SECTION 302.      Denominations.

         The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 3.01. In the absence of any
such provisions with respect to the Securities of any particular series, the
Securities of such series shall be issuable only as registered Securities
without coupons in denominations of $100,000 and any integral multiple of $1,000
in excess thereof.

SECTION 303.      Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Company and the
Guarantees endorsed thereon shall be executed on behalf of the Guarantor by,
respectively, its Chairman of the Board, one of its Vice Chairmen, its President
or one of its Vice Presidents, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities or Guarantees may be manual or
facsimile.

         Securities and Guarantees bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company or the
Guarantor, respectively, shall bind the Company and the Guarantor, respectively,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities and
Guarantees or did not hold such offices at the date of such Securities and
Guarantees.

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company, and with Guarantees endorsed thereon executed by the Guarantor, to the
Trustee or Authenticating Agent for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the Trustee or
Authenticating Agent in accordance with the Company Order shall authenticate and
deliver such Securities; provided, however, that, with respect to Securities of
a series offered in a Periodic Offering, (a) the Trustee or Authenticating Agent
shall authenticate and deliver Securities of such series original issue from
time to time, in an aggregate principal amount not exceeding the aggregate
principal amount established for such series, pursuant to a Company Order or
pursuant to such other procedures acceptable to the Trustee as may be specified
from time to time by a Company Order, (b) the maturity date or dates, original
issue date or dates, currency or currencies or composite currencies, interest
rate or rates and any other terms of the Securities of such series shall be
determined by Company Order or pursuant to such procedures and (c) if provided
for in such procedures, such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which instructions shall be promptly confirmed
in writing,

                                       28
<PAGE>   38
including via facsimile, prior to delivery. If the form or terms of the
Securities of the series or the form of the Guarantee relating thereto have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 2.01 and 3.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive at the time of the initial delivery by
the Company of Securities of such series to the Trustee or Authenticating Agent
for authentication, and (subject to Section 701) shall be fully protected in
relying upon, an Opinion of Counsel stating,

         (a) if the form of such Securities or Guarantees has been established
by or pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;

         (b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms have
been established in conformity with the provisions of this Indenture; and

         (c) that such Securities, when authenticated and delivered by the
Trustee or Authenticating Agent and issued by the Company, and such Guarantees
when endorsed on such Securities, all in the manner and subject to any
conditions specified in such Opinion of Counsel, will be the legal, valid and
binding obligations of the Company and the Guarantor, respectively, enforceable
in accordance with their terms and entitled to the benefits of this Indenture,
subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
generally the enforcement of creditors' rights and to general principles of
equity; provided, however, that, with respect to Securities of a series offered
in a Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of Securities of such
series and that the opinions described in clauses (b) and (c) above may state,
respectively,

         (x) that, when the terms of such Securities shall have been established
pursuant to a Company Order or pursuant to such procedures as may be specified
from time to time by a Company Order, all as contemplated by a Board Resolution
or action taken pursuant thereto, such terms will have been duly authorized by
the Company and will have been established in conformity with the provisions of
this Indenture; and

         (y) that such Securities, when completed, authenticated and delivered
by the Trustee or Authenticating Agent and issued by the Company, and such
Guarantees when endorsed on such Securities, all in the manner and subject to
any conditions specified in such Opinion of Counsel, will be the legal, valid
and binding obligations of the Company and the Guarantor, respectively,
enforceable in accordance with their terms and entitled to the benefits of this
Indenture, subject, as to enforcement, to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting generally the enforcement of creditors' rights and to general
principles of equity.

                                       29
<PAGE>   39
         With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Company of any of such
Securities and by the Guarantor of any such Guarantees, the form and terms
thereof and the legality, validity, binding effect and enforceability thereof,
upon the Opinion of Counsel, Company Order and other documents delivered
pursuant to Sections 201 and 301 and this Section, as applicable, delivered at
or prior to the first authentication of Securities of such series unless and
until such opinion or other documents have been superseded or revoked.

         The Trustee or Authenticating Agent may, but shall not be obligated to,
authenticate the Securities of any series the form or terms of which, or the
form of the Guarantees relating to which, have been so established and with
respect to which it would not be or have been obligated, pursuant to the second
sentence of Section 1003, to execute, if no Securities of such series have been
authenticated, at the time such authentication is requested, or, if Securities
of such series have been authenticated, at the time of the initial
authentication of Securities of such series, an indenture supplemental hereto
containing such form or terms.

         Notwithstanding the provisions of Section 301 and of the third
paragraph of this Section 303, if any Securities of a series are to be offered
in a Periodic Offering, it shall not be necessary to deliver the Opinion of
Counsel, Company Order and other documents otherwise required pursuant to
Sections 201 and 301 and this Section at or prior to the time of authentication
of each Security of such series if such documents are delivered at or prior to
the time of authentication upon original issuance of the first Security of such
series to be issued.

         Each Security shall be dated the date of authentication of such
Security. Each Guarantee shall be dated the date of the initial issuance of
Securities of the series to which it pertains.

         No Security or Guarantee endorsed thereon shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee or Authenticating Agent by
manual signature, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.

         The Trustee or Authenticating Agent shall have the right to decline to
authenticate and deliver any Securities under this Section if the Trustee or
Authenticating Agent, being advised by counsel, determines that such action may
not lawfully be taken by the Company or the Guarantor

                                       30
<PAGE>   40
or if the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under this Indenture in a manner not
reasonably acceptable to the Trustee.

SECTION 304.      Temporary Securities.

         Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee or Authenticating Agent
shall authenticate and deliver, temporary Securities (having Guarantees duly
endorsed thereon) which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.

         If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company designated pursuant to Section
1102 in a Place of Payment for Securities of that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
of any series, the Company shall execute and the Trustee or Authenticating Agent
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series and of a like aggregate principal amount and tenor
of authorized denominations. Until so exchanged, the temporary Securities of any
series and the Guarantees endorsed thereon shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities of such series
and tenor and the Guarantees endorsed thereon.

SECTION 305.      Registration, Registration of Transfer and Exchange.

         The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (hereinafter referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and the registration of
transfers of Securities. The Trustee is hereby appointed security registrar
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.

         Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for
Securities of that series, the Company shall execute, and the Trustee or
Authenticating Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of like tenor
of the same series (having Guarantees duly endorsed thereon), of any authorized
denominations and of a like aggregate principal amount and tenor.

                                       31
<PAGE>   41
         At the option of the Holder, Securities of any series may be exchanged
for other Securities of like tenor of the same series (having Guarantees duly
endorsed thereon), of any authorized denominations and of a like aggregate
principal amount and tenor, 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 or Authenticating Agent shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive and the Guarantor shall execute the Guarantees endorsed
thereon.

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

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

         No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 1006 or 1207 not involving any transfer.

         The Company shall not be required (i) to issue, register the transfer
of or exchange any Security of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption under Section
1203 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

         Notwithstanding the foregoing, any Global Security shall be
exchangeable pursuant to this Section 305 for Securities registered in the names
of Persons other than the Depositary for such Security or its nominee only if
(i) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Securities registered in such
names as such Depositary shall direct.

                                       32
<PAGE>   42
         Unless and until any Global Security is exchanged in whole or in part
for Securities of this series in certificated form, such Global Security may not
be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such Depositary. Unless a certificate
representing a Global Security is presented by an authorized representative of
such a transferror to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
such a transferee or such other name as requested by an authorized
representative of such a transferror and any payment is made to such a
transferee, any transfer, pledge or other use thereof for value or otherwise by
or to any person is wrongful since the registered owner thereof, such a
transferror has an interest therein.

         No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Guarantor, the Trustee, and any agent of the Company, the Guarantor or the
Trustee as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall impair, as between a
Depositary and such holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary as Holder of
any Security.

SECTION 306.      Mutilated, Destroyed, Lost and Stolen Securities.

         If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee or Authenticating Agent shall authenticate and
deliver in exchange therefor a new Security of the same series, with a Guarantee
duly endorsed thereon, and of like tenor and principal amount and bearing a
serial number not contemporaneously outstanding.

         If there shall be delivered to the Company, the Guarantor and the
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Security and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company, the Guarantor or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute and the
Trustee or Authenticating Agent shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series, with
a Guarantee duly endorsed thereon by the Guarantor, and of like tenor and
principal amount and bearing a serial number not contemporaneously outstanding.

         In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security of the same series, pay such Security.

                                       33
<PAGE>   43
         Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

         Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company guaranteed by the Guarantor,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities and
Guarantees of the same series duly issued hereunder.

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

SECTION 307.      Payment of Interest; Interest Rights Preserved.

         Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

         Any interest on any Security of a particular series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company or the Guarantor, at its
election in each case, as provided in Clause (1) or (2) below:

         (1) The Company or the Guarantor may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company or the Guarantor shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security of such series and the date of the proposed payment, and
at the same time the Company or the Guarantor, as the case may be, 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 deposit with the Trustee or designated Paying
Agent prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted Interest
as in this Clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such

                                       34
<PAGE>   44
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company or the Guarantor, as the case may be, of such
Special Record Date and, in the name and at the expense of the Company or the
Guarantor, as the case may be, 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 Holder of Securities of such series at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).

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

         Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security of the same series shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 308.      Persons Deemed Owners.

         Prior to due presentment of a Security for registration of transfer,
the Company, the Guarantor, the Trustee and any agent of the Company, the
Guarantor or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 307) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Guarantor, the Trustee nor any agent of
the Company, the Guarantor or the Trustee shall be affected by notice to the
contrary.

SECTION 309.      Cancellation.

         All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the

                                       35
<PAGE>   45
Trustee or an Authenticating Agent, be delivered to the Trustee or an
Authenticating Agent and shall be promptly cancelled by it. The Company or the
Guarantor may at any time deliver to the Trustee or an Authenticating Agent for
cancellation any Securities previously authenticated and delivered hereunder
which the Company or the Guarantor may have acquired in any manner whatsoever,
and may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered shall
be promptly cancelled by the Trustee or an Authenticating Agent. No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. The
Trustee and any Authenticating Agent shall destroy all cancelled Securities held
by it and shall deliver to the Company a certificate with respect to such
destruction.

SECTION 310.      Computation of Interest.

         Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                       36
<PAGE>   46
                                  ARTICLE FOUR

                             GUARANTEE OF SECURITIES

SECTION 401.      Unconditional Guarantee.

         The Guarantor hereby unconditionally guarantees to each Holder of a
Security of any series authenticated and delivered by the Trustee or
Authenticating Agent the due and punctual payment of the principal of and
premium, if any, and interest on such Security and the due and punctual payment
of the sinking fund payments, if any, provided for pursuant to the terms of such
Security, when and as the same shall become due and payable, whether at
maturity, by acceleration or redemption or otherwise, in accordance with the
terms of such Security and of this Indenture. In case of the failure of the
Company punctually to pay any such principal, premium, interest or sinking fund
payment, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at
maturity, upon acceleration or redemption or otherwise, and as if such payment
were made by the Company.

         The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
unenforceability of such Security or this Indenture, any failure to enforce the
provisions of any such Security or this Indenture, or any waiver, modification,
consent or indulgence granted to the Company with respect thereto, by the Holder
of such Security or the Trustee, the recovery of any judgment against the
Company or any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger, insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal of and premium, if any,
and interest on, and any sinking fund payments required with respect to, the
Securities and the complete performance of all other obligations contained in
the Securities.

         The Guarantor shall be subrogated to all rights of the Holder of any
Security against the Company in respect of any amounts paid to such Holder by
the Guarantor pursuant to the provisions of this Guarantee; provided, however,
that the Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until the principal of
and premium, if any, and interest on, and any sinking fund payments required
with respect to, all Securities shall have been paid in full.

                                       37
<PAGE>   47
         Claims under the Guarantee are, to the extent provided in this
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness of the Guarantor, and the Guarantee is issued
subject to the provisions of this Indenture with respect thereto. Each Holder of
a Security upon which the Guarantee is endorsed, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.

SECTION 402.      Execution of Guarantees.

         To evidence its Guarantee to the Holders specified in Section 401, the
Guarantor hereby agrees to execute the Guarantee in substantially the form above
recited to be endorsed on each Security authenticated and delivered by the
Trustee or Authenticating Agent. Each such Guarantee shall be executed on behalf
of the Guarantor and dated as set forth in Section 303 prior to the
authentication of the Security on which it is endorsed, and the delivery of such
Security by the Trustee or Authenticating Agent, after the authentication
thereof hereunder, shall constitute due delivery of such Guarantee on behalf of
the Guarantor.

         The Guarantee set forth in this Article shall not be valid or become
obligatory for any purpose with respect to a Security until the certificate of
authentication on such Security shall have been signed by the Trustee or
Authenticating Agent.

                                       38
<PAGE>   48
                                  ARTICLE FIVE

                           SATISFACTION AND DISCHARGE

SECTION 501.      Satisfaction and Discharge of Indenture.

         This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer, exchange or replacement of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company and the Guarantor, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

         (1) either

                  (A) all Securities theretofore authenticated and delivered
         (other than (i) Securities which have been destroyed, lost or stolen
         and which have been replaced or paid as provided in Section 306 and
         (ii) Securities for whose payment money has theretofore been deposited
         in trust or segregated and held in trust by the Company and thereafter
         repaid to the Company or discharged from such trust, as provided in
         Section 1103) have been delivered to the Trustee for cancellation; or

                  (B) all such Securities not theretofore delivered to the
         Trustee for cancellation

         (i) have become due and payable, or

         (ii) will become due and payable at their Stated Maturity within one
year, or

         (iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company and the
Guarantor, and the Company or the Guarantor, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;

         (2) the Company or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and

                                       39
<PAGE>   49
         (3) the Company and the Guarantor have delivered to the Trustee 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.

         Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and the Guarantor to the Trustee under Section 707,
the obligations of the Trustee to any Authenticating Agent under Section 714
and, if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the obligations of the Trustee under Section
502 and the last paragraph of Section 1103 shall survive.

SECTION 502.      Application of Trust Money.

         Subject to the provisions of the last paragraph of Section 1103, all
money deposited with the Trustee pursuant to Section 501 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except as
required by law.

                                       40
<PAGE>   50
                                   ARTICLE SIX

                                    REMEDIES

SECTION 601.      Events of Default.

         "Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

         (1) a court or Federal or State regulatory agency having jurisdiction
in the premises shall enter a decree or order for relief in respect of the
Guarantor or the Bank 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 Guarantor or the Bank or substantially all of such Person's
assets (other than appointment of a conservator with respect to the Bank), or
ordering the winding up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or

         (2) the Guarantor or the Bank shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or 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 similar official) of the Guarantor or the Bank or substantially all of such
Person's assets (other than appointment of a conservator with respect to the
Bank), or shall make any general assignment for the benefit of creditors.

         Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 601 with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice of default, which record date shall be at the close of business on
the date the Trustee receives such notice of default. The Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to join in such notice of default, whether or not such Holders remain Holders
after such record date; provided, that unless Holders of at least 10% in
principal amount of the Outstanding Securities of such series, or their proxies
shall have joined in such notice of default prior to the day which is 90 days
after such record date, such notice of default shall automatically and without
further action by any Holder be cancelled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new notice of default identical to

                                       41
<PAGE>   51
a notice of default which has been cancelled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 601.

SECTION 602.      Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof), of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company and the Guarantor
(and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company, the
Guarantor and the Trustee, may rescind and annul such declaration and its
consequences if

                  (1) the Company or the Guarantor has paid or deposited with
         the Trustee a sum sufficient to pay

                  (A) all overdue installments of interest on all Securities of
         that series,

                  (B) the principal of (and premium, if any, on) any Securities
         of that series which have become due otherwise than by such declaration
         of acceleration and interest thereon at the rate or rates prescribed
         therefor in such Securities,

                  (C) to the extent that payment of such interest is lawful,
         interest upon overdue installments of interest at the rate or rates
         prescribed therefor in such Securities, and

                  (D) all sums paid or advanced by the Trustee hereunder and the
         reasonable compensation, expenses, disbursements and advances of the
         Trustee, its agents and counsel;

                                       42
<PAGE>   52
         and

                  (2) all Events of Default and Defaults with respect to
         Securities of that series, other than the non-payment of the principal
         of Securities of that series which have become due solely by such
         declaration of acceleration, have been cured or waived as provided in
         Section 613.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

         Upon receipt by the Trustee of any written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be cancelled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 602.

SECTION 603.      Collection of Indebtedness and Suits for Enforcement by
Trustee.

         "Default", wherever used herein, means any one of the following events
(whatever the reason for such Default and whether it shall be occasioned by the
provisions of Article Fourteen or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

                  (1) default is made in the payment of any interest on any
         Security when such interest becomes due and payable and such default
         continues for a period of 30 days, or

                  (2) default is made in the payment of the principal of any
         Security at the Maturity thereof, or

                                       43
<PAGE>   53
                  (3) default is made in the performance of any covenant or a
         breach occurs in any 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 or which
         has expressly been included in this Indenture solely for the benefit of
         Securities of any series other than that series), and such default or
         breach continues for a period of 60 days after there has been given, by
         registered or certified mail, to the Company and the Guarantor by the
         Trustee or to the Company and the Guarantor and the Trustee by the
         Holders of at least 25% in principal amount of the Outstanding
         Securities of that series, a written notice specifying such default or
         breach and requiring it to be remedied and stating that such notice is
         a "Notice of Default" hereunder.

         The Company covenants that if any Event of Default or Default under
Clause (1) or (2) above shall occur, the Company will, upon demand of the
Trustee, pay to it, for the benefit of the Holder of such Security, the whole
amount then due and payable on such Security for principal (and premium, if any)
and interest and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on any
overdue interest, at the rate or rates prescribed therefor in such Security,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

         If the Company or the Guarantor fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or the Guarantor or any other obligor upon
such Security and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or the Guarantor or
any other obligor upon such Security, wherever situated.

         If an Event of Default or Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 604.      Trustee May File Proofs of Claim.

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Guarantor or any other obligor
upon the Securities or the property of the Company, the Guarantor or such other
obligor or their creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions

                                       44
<PAGE>   54
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any receiver,
assignee, custodian, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 707.

         No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

SECTION 605.      Trustee May Enforce Claims Without Possession of Securities.

         All rights of action and claims under this Indenture or the Securities
or the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.

SECTION 606.      Application of Money Collected.

         Subject to Article Fourteen, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

                  FIRST: To the payment of all amounts due the Trustee under
         Section 707; and

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

                                       45
<PAGE>   55
SECTION 607.      Limitation on Suits.

         No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless

                  (1) such Holder has previously given written notice to the
         Trustee of a continuing Event of Default or Default with respect to the
         Securities of that series;

                  (2) the Holders of not less than 25% in principal amount of
         the Outstanding Securities of that series shall have made written
         request to the Trustee to institute proceedings in respect of such
         Event of Default or Default in its own name as Trustee hereunder;

                  (3) such Holder or Holders have offered to the Trustee
         reasonable indemnity against the costs, expenses and liabilities to be
         incurred in compliance with such request;

                  (4) the Trustee for 60 days after its receipt of such notice,
         request and offer of indemnity has failed to institute any such
         proceeding; and

                  (5) no direction inconsistent with such written request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority in principal amount of the Outstanding Securities of that
         series; it being understood and intended that no one or more of such
         Holders shall have any right in any manner whatever by virtue of, or by
         availing of, any provision of this Indenture to affect, disturb or
         prejudice the rights of any other of such Holders, or to obtain or to
         seek to obtain priority or preference over any other of such Holders or
         to enforce any right under this Indenture, except in the manner herein
         provided and for the equal and ratable benefit of all of such Holders.

SECTION 608.      Unconditional Right of Holders to Receive Principal, Premium
and Interest.

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.

                                       46
<PAGE>   56
SECTION 609.      Restoration of Rights and Remedies.

         If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Guarantor, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.

SECTION 610.      Rights and Remedies Cumulative.

         No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

SECTION 611.      Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default or Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

SECTION 612.      Control by Holders.

         The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

                  (1) such direction shall not be in conflict with any rule of
         law or with this Indenture, and

                  (2) such direction shall not be unduly prejudicial to the
         rights of Holders not joining therein nor expose the Trustee to
         personal liability.

                                       47
<PAGE>   57
                  (3) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such direction.

         Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 612.

SECTION 613.      Waiver of Past Defaults.

         The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to the
Securities of such series and its consequences, except a default

                  (1) in the payment of the principal of (or premium, if any) or
         interest on any Security of such series, or

                  (2) in respect of a covenant or provision hereof which under
         Article Ten cannot be modified or amended without the consent of the
         Holder of each Outstanding Security of such series affected.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided that unless such majority in principal amount shall have waived
such default prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.

                                       48
<PAGE>   58
         Upon any such waiver, such default shall cease to exist, and any Event
of Default or Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

SECTION 614.      Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Trustee, the Company or the
Guarantor.

SECTION 615.      Waiver of Stay or Extension Laws.

         The Company and the Guarantor covenant (to the extent that they may
lawfully do so) that they will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company and
the Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefit or advantage of any such law and covenant that they will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

                                       49
<PAGE>   59
                                  ARTICLE SEVEN

                                   THE TRUSTEE

SECTION 701.      Certain Duties and Responsibilities.

         (a) The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

         (b) All indemnifications and releases from liability granted herein to
the Trustee shall extend to the directors, officers, employees and agents of the
Trustee.

SECTION 702.      Notice of Defaults.

         If a default occurs hereunder with respect to Securities of any series
of which a responsible officer in the Corporate Trust Office of the Trustee has
actual knowledge, the Trustee shall give the Holders of Securities of such
series notice of such default as and to the extent provided by Section 315(b) of
the Trust Indenture Act; provided, however, that in the case of any default of
the character specified in Section 603(3) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to Securities of such series.

SECTION 703.      Certain Rights of Trustee.

         Except as otherwise provided in Section 701:

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

                                       50
<PAGE>   60
                  (b) any request or direction of the Company or the Guarantor
         mentioned herein shall be sufficiently evidenced by a Company Request
         or Company Order or Guarantor Request or Guarantor Order, as the case
         may be, or as otherwise expressly provided herein and any resolution of
         the Board of Directors may be sufficiently evidenced by a Board
         Resolution;

                  (c) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officers'
         Certificate;

                  (d) the Trustee may consult with counsel and the written
         advice of such counsel or any Opinion of Counsel shall be full and
         complete authorization and protection in respect of any action taken,
         suffered or omitted by it hereunder in good faith and in reliance
         thereon;

                  (e) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the Holders pursuant to this Indenture, unless
         such Holders shall have offered to the Trustee reasonable security or
         indemnity against the costs, expenses and liabilities which might be
         incurred by it in compliance with such request or direction;

                  (f) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, officer's
         certificate, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document, but the
         Trustee, in its discretion, may make such further inquiry or
         investigation into such facts or matters as it may see fit, and, if the
         Trustee shall determine to make such further inquiry or investigation,
         it shall be entitled to examine the books, records and premises of the
         Company and the Guarantor, personally or by agent (including an
         Authenticating Agent) or attorney; provided, 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 inquiry or
         investigation is, in the opinion of the Trustee, not reasonably assured
         the Trustee by the security afforded to it by the terms of this
         Indenture, the Trustee may require reasonable indemnity against such
         expenses or liabilities as a condition to proceeding; the reasonable
         expenses of every such examination shall be paid by the Guarantor and
         or, if advanced by the Trustee, shall be repaid by the Guarantor
         Company upon demand; 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 or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent (including
         any Authenticating Agent) or attorney appointed with due care by it
         hereunder.

                                       51
<PAGE>   61
SECTION 704.      Not Responsible for Recitals or Issuance of Securities and
Guarantees.

         The recitals contained herein and in the Securities and Guarantees,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company or the Guarantor, as the case may be, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. Neither the Trustee nor any Authenticating Agent makes any
representations as to the validity or sufficiency of this Indenture or of the
Securities or the Guarantees. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Company or the Guarantor
of Securities or the proceeds thereof.

SECTION 705.      May Hold Securities.

         The Trustee, any Paying Agent, any Security Registrar, any
Authenticating Agent or any other agent of the Company or the Guarantor, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 708 and 713, may otherwise deal with the Company and
the Guarantor with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar, Authenticating Agent or such other agent.

SECTION 706.      Money Held in Trust.

         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company or the Guarantor.

SECTION 707.      Compensation and Reimbursement.

         The Company and the Guarantor agree

                  (1) to pay to the Trustee from time to time reasonable
         compensation for all services rendered by it hereunder (which
         compensation shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         disbursements and advances incurred or made by the Trustee in
         accordance with any provision of this Indenture (including the
         reasonable compensation and the expenses and disbursements of its
         agents, including any Authenticating Agents, and counsel), except any
         such expense, disbursement or advance as may be attributable to its
         negligence or bad faith; and

                                       52
<PAGE>   62
                  (3) to indemnify the Trustee for, and to hold it harmless
         against, any loss, liability or expense incurred without negligence or
         bad faith on its part, arising out of or in connection with the
         acceptance or administration of the trust or trusts hereunder,
         including the costs and expenses of defending itself against any claim
         or liability in connection with the exercise or performance of any of
         its powers or duties hereunder.

         As security for the performance of the obligations of the Company and
the Guarantor under this Section the Trustee shall have a lien prior to the
Securities and Guarantees upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of (and
premium, if any) or interest on particular Securities.

         The provisions of this Section 707 shall survive the resignation or
removal of the Trustee and the termination of this Indenture.

SECTION 708.      Disqualification; Conflicting Interests.

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

SECTION 709.      Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000, and subject to supervision
or examination by Federal or State authority and having a Corporate Trust Office
in the City of Pittsburgh, Pennsylvania or the Borough of Manhattan, The City of
New York, New York or Chicago, Illinois. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

SECTION 710.      Resignation and Removal; Appointment of Successor.

         (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 711.

                                       53
<PAGE>   63
         (b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company and the
Guarantor. If the instrument of acceptance by a successor Trustee required by
Section 711 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

         (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company and the Guarantor.

         (d) If at any time:

                  (1) the Trustee shall fail to comply with Section 708 after
         written request therefor by the Company or the Guarantor or by any
         Holder who has been a bona fide Holder of a Security for at least six
         months, or

                  (2) the Trustee shall cease to be eligible under Section 709
         and shall fail to resign after written request therefor by the Company
         or the Guarantor or by any such Holder, 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,
         (i) the Company or the Guarantor by a Board Resolution may remove the
         Trustee with respect to all Securities, or (ii) subject to Section 614,
         any Holder 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 with respect to all Securities and the appointment of a
         successor Trustee or Trustees.

         (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 711. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered

                                       54
<PAGE>   64
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 711, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company or the Guarantor. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Guarantor or the Holders and accepted
appointment in the manner required by Section 711, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

         (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106;
provided, that failure of the Company to give such notice shall not effect the
resignation or removal of such Trustee. Each notice shall include the name of
the successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.

SECTION 711.      Acceptance of Appointment by Successor.

         (a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company, the Guarantor and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company, the Guarantor or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its lien, if any, provided for in Section
707.

         (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
Guarantor, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to the
Securities of all series for which it is the Trustee hereunder, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts

                                       55
<PAGE>   65
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company, the Guarantor or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.

         (c) Upon request of any such successor Trustee, the Company and the
Guarantor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

         (d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.

SECTION 712.      Merger, Conversion, Consolidation or Succession to Business.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

SECTION 713.      Preferential Collection of Claims Against Company and
Guarantor.

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture

                                       56
<PAGE>   66
Act regarding the collection of claims against the Company or the Guarantor (or
any such other obligor).

SECTION 714.      Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
(but not upon original issuance or pursuant to Section 306), and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.

         Each Authenticating Agent shall be acceptable to the Company and the
Guarantor and shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any State, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
Federal or State authority. If such 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, 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. In case at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.

         Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

         An Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company and the Guarantor. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice of termination to such Authenticating Agent and to the Company
and the Guarantor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and the Guarantor and shall mail notice of such appointment to all
Holders of Securities of the series with respect to

                                       57
<PAGE>   67
which such Authenticating Agent will serve, as their names and addresses appear
on the Security Register. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

         The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

                                       58
<PAGE>   68
                                  ARTICLE EIGHT

          HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR

SECTION 801.      Company and Guarantor to Furnish Trustee Names and Addresses
of Holders.

         The Company and the Guarantor will furnish or cause to be furnished to
the Trustee

                  (a) semi-annually, either (i) not later than July 15 and
         January 15 in each year in the case of Original Issue Discount
         Securities of any series which by their terms bear interest only after
         Maturity, or (ii) not more than 15 days after each Regular Record Date
         in the case of Securities of any other series, a list for each such
         series, in such form as the Trustee may reasonably require, of the
         names and addresses of the Holders of Securities of such series as of
         the preceding June 30 or December 31 or as of such Regular Record Date,
         as the case may be, and

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

         excluding from any such list names and addresses received by the
Trustee in its capacity as Security Registrar.

SECTION 802.      Preservation of Information; Communications to Holders.

         (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 801. The Trustee may
destroy any list furnished to it as provided in Section 801 upon receipt of a
new list so furnished.

         (b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.

         (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company, the Guarantor and the Trustee that neither the Company,
the Guarantor nor the

                                       59
<PAGE>   69
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.

SECTION 803.      Reports by Trustee.

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

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

SECTION 804.      Reports by Company and Guarantor.

         The Company and the Guarantor shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.

                                       60
<PAGE>   70
                                  ARTICLE NINE

                         CONSOLIDATION, MERGER AND SALE

SECTION 901.      Company May Consolidate, Etc., Only on Certain Terms.

         Nothing contained in this Indenture or in any of the Securities or
Guarantees shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the property of the Company as an entirety or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Company) authorized to acquire and operate the same;
provided, however, that:

                  (1) in case the Company shall consolidate with or merge into
         another corporation or convey, transfer or lease its properties and
         assets substantially as an entirety to any Person, the corporation
         formed by such consolidation or into which the Company is merged or the
         Person which acquires by conveyance or transfer, or which leases, the
         properties and assets of the Company substantially as an entirety shall
         be a corporation organized and existing under the laws of the United
         States of America, any State thereof or the District of Columbia and
         shall expressly assume, by an indenture (or indentures, if at such time
         there is more than one Trustee) supplemental hereto, executed and
         delivered by the successor corporation and the Guarantor to the
         Trustee, in form satisfactory to the Trustee, the due and punctual
         payment of the principal of (and premium, if any) and interest on all
         the Securities and the performance of every covenant of this Indenture
         on the part of the Company to be performed or observed;

                  (2) immediately after giving effect to such transaction and
         treating any indebtedness which becomes an obligation of the Company or
         a Subsidiary as a result of such transaction as having been incurred by
         the Company or such Subsidiary at the time of such transaction, no
         Event of Default, and no event (including, without limitation, default
         under Section 1107) which, after notice or lapse of time or both, would
         become an Event of Default or Default, shall have happened and be
         continuing;

                  (3) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger, conveyance, transfer or lease and such
         supplemental indenture comply with this Article and that all conditions
         precedent herein provided for relating to such transaction have been
         complied with; and

                  (4) the Guarantor has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that the Guarantees
         remain in full force and effect.

                                       61
<PAGE>   71
SECTION 902.      Successor Corporation Substituted for Company.

         Upon any consolidation or merger or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 901, the successor corporation formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
herein, and thereafter, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Securities.

SECTION 903.      Guarantor May Consolidate, Etc., Only on Certain Terms.

         Nothing contained in this Indenture or in any of the Securities or
Guarantees shall prevent any consolidation or merger of the Guarantor with or
into any other corporation or corporations (whether or not affiliated with the
Guarantor), or successive consolidations or mergers in which the Guarantor or
its successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the property of the Guarantor as an entirety or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Guarantor) authorized to acquire and operate the same;
provided, however, that

         (1) in case the Guarantor shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the corporation formed by such consolidation or
into which the Guarantor is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Guarantor
substantially as an entirety shall be a corporation organized and existing under
the laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture (or indentures, if at such
time there is more than one Trustee) supplemental hereto, executed and delivered
by the Guarantor and the Company to the Trustee, in form satisfactory to the
Trustee, the Guarantees endorsed on the Securities and the performance of every
covenant of this Indenture on the part of the Guarantor to be performed or
observed;

         (2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Guarantor or a Subsidiary as
a result of such transaction as having been incurred by the Guarantor or such
Subsidiary at the time of such transaction, no Event of Default or Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default or Default, shall have happened and be continuing; and

         (3) the Guarantor has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such

                                       62
<PAGE>   72
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with.

SECTION 904.      Successor Corporation Substituted for Guarantor.

         Upon any consolidation or merger or any conveyance, transfer or lease
of the properties and assets of the Guarantor substantially as an entirety to
any Person in accordance with Section 903, the successor corporation formed by
such consolidation or into which the Guarantor is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Guarantor under this Indenture
with the same effect as if such successor corporation had been named as the
Guarantor herein, and thereafter, except in the case of a lease to another
Person, the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Guarantees.

SECTION 905.      Assumption by Guarantor.

         The Guarantor, or a Subsidiary thereof, may directly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed. Upon any such assumption, the Guarantor or such Subsidiary shall
succeed to, and be substituted for and may exercise every right and power of,
the Company under this Indenture with the same effect as if the Guarantor or
such Subsidiary had been named as the Company herein and the Company shall be
released from its liability as obligor on the Securities. No such assumption
shall be permitted unless the Guarantor has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
assumption and supplemental indenture comply with this Article, and that all
conditions precedent herein provided for relating to such transaction have been
complied with and that, in the event of assumption by a Subsidiary, the
Guarantees remain in full force and effect.

                                       63
<PAGE>   73
                                   ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

SECTION 1001.     Supplemental Indentures Without Consent of Holders.

         Without the consent of any Holders, the Company and the Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

                  (1) to evidence the succession of another Person to the
         Company or the Guarantor and the assumption by any such successor of
         the covenants of the Company or the Guarantor herein and in the
         Securities or the Guarantees; or

                  (2) to add to the covenants of the Company or the Guarantor
         for the benefit of the Holders of all or any series of Securities (and
         if such covenants are to be for the benefit of less than all series of
         Securities, stating that such covenants are expressly being included
         solely for the benefit of such series) or to surrender any right or
         power herein conferred upon the Company or the Guarantor; or

                  (3) to add any additional Events of Default or Defaults; or

                  (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to permit or facilitate
         the issuance of Securities in bearer form, registrable or not
         registrable as to principal, and with or without interest coupons; or

                  (5) to add to, change or eliminate any of the provisions of
         this Indenture in respect of one or more series of Securities, provided
         that any such addition, change or elimination (i) shall neither (A)
         apply to any Security of any series created prior to the execution of
         such supplemental indenture and entitled to the benefit of such
         provision nor (B) modify the rights of the Holder of any such Security
         with respect to such provision or (ii) shall become effective only when
         there is no such Security Outstanding; or

                  (6) to establish the form or terms of Securities of any series
         or the form of Guarantees relating thereto as permitted by Sections 201
         and 301; or

                  (7) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or

                                       64
<PAGE>   74
         change any of the provisions of this Indenture as shall be necessary to
         provide for or facilitate the administration of the trusts hereunder by
         more than one Trustee, pursuant to the requirements of Section 711(b);

                  (8) to cure any ambiguity, to correct or supplement any
         provision herein which may be inconsistent with any other provision
         herein, or to make any other provisions with respect to matters or
         questions arising under this Indenture, provided that such action
         pursuant to this Clause (8) shall not adversely affect the interests of
         the Holders of Securities of any series in any material respect; or

                  (9) to effect assumption by the Guarantor or a Subsidiary
         thereof pursuant to Section 905.

SECTION 1002.     Supplemental Indentures With Consent of Holders.

         With the consent of the Holders of not less than 66 2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantor and the Trustee, the Company and the Guarantor, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,

                  (1) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon (including any
         change in the Floating or Adjustable Rate Provision pursuant to which
         such rate is determined that would reduce such rate for any period) or
         any premium payable upon the redemption thereof, or reduce the amount
         of the principal of an Original Issue Discount Security that would be
         due and payable upon a declaration of acceleration of the Maturity
         thereof pursuant to Section 602, or change any Place of Payment where,
         or the coin or currency in which, any Security or any premium or the
         interest thereon is payable, or impair the right to institute suit for
         the enforcement of any such payment on or after the Stated Maturity
         thereof (or, in the case of redemption, on or after the Redemption
         Date), or modify the provisions of this Indenture with respect to the
         subordination of the Securities and the Guarantees in a manner adverse
         to the Holders, or

                  (2) reduce the percentage in principal amount of the
         Outstanding Securities of any series, the consent of whose Holders is
         required for any such supplemental indenture, or the consent of whose
         Holders is required for any waiver (of compliance with certain

                                       65
<PAGE>   75
         provisions of this Indenture or certain defaults hereunder and their
         consequences) provided for in this Indenture, or

                  (3) modify any of the provisions of this Section, Section 613
         or Section 1107, except to increase any such percentage or to provide
         that certain other provisions of this Indenture cannot be modified or
         waived without the consent of the Holder of each Outstanding Security
         affected thereby; provided, however, that this clause shall not be
         deemed to require the consent of any Holder with respect to changes in
         the references to "the Trustee" and concomitant changes in this Section
         and Article Eleven, or the deletion of this proviso, in accordance with
         the requirements of Sections 711(b) and 1001(7), or

                  (4) modify or affect in any manner adverse to the Holders the
         terms and conditions of the obligation of the Guarantor in respect of
         the due and punctual payment of the principal of, premium, if any, or
         interest or sinking fund payments, if any, on the Securities.

         A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

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

SECTION 1003.     Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 701) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is

                                       66
<PAGE>   76
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 1004.     Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 1005.     Conformity with Trust Indenture Act.

         Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

SECTION 1006.     Reference in Securities to Supplemental Indentures.

         Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company or the
Guarantor shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Boards of Directors of the
Company and the Guarantor, to any such supplemental indenture may be prepared
and executed by the Company, with the Guarantee of the Guarantor endorsed
thereon, and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.

                                       67
<PAGE>   77
                                 ARTICLE ELEVEN

                                    COVENANTS

SECTION 1101.     Payment of Principal, Premium and Interest.

         The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities of such series and this Indenture.

SECTION 1102.     Maintenance of Office or Agency.

         The Company or the Guarantor will maintain in each Place of Payment for
any series of Securities an office or agency where Securities of that series may
be presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company or the Guarantor in respect of the Securities of
that series and the Guarantees relating thereto and this Indenture may be
served; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register. With respect to the
Securities of any series, such office or agency and each Place of Payment shall
be as specified as contemplated by Section 301. If at any time the Company and
the Guarantor shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company and the Guarantor each hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.

         The Company and the Guarantor may also from time to time designate one
or more other offices or agencies where the Securities of one or more series may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company or the Guarantor of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company and the Guarantor will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.

SECTION 1103.     Money for Securities Payments to Be Held in Trust.

         If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest

                                       68
<PAGE>   78
on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.

         Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

         The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company or the Guarantor (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.

         The Company or the Guarantor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order or Guarantor Order, as the case may be, direct
any Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for three
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request (or if deposited by the
Guarantor, paid to the Guarantor on Guarantor Request), or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company and
the Guarantor for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30

                                       69
<PAGE>   79
days from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company or the Guarantor, as the case may be.

SECTION 1104.     Corporate Existence.

         Subject to Article Nine, the Company and the Guarantor will do or cause
to be done all things necessary to preserve and keep in full force and effect
their respective corporate existences and that of the Bank and their respective
rights (charter and statutory) and franchises and those of the Bank; provided,
however, that neither the Company, the Guarantor, nor the Bank shall be required
to preserve any such right or franchise if the Company, the Guarantor or the
Bank, as the case may be, shall determine that the preservation thereof is no
longer desirable in the conduct of its business and that the loss thereof is not
disadvantageous in any material respect to the Holders.

SECTION 1105.     Company Statement as to Compliance.

         The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a written statement, which need not comply with Section
102, signed by the Chairman of the Board, a Vice Chairman, the President or a
Vice President and by the Treasurer or an Assistant Treasurer of the Company,
stating, as to each signer thereof, that

                  (1) a review of the activities of the Company during such year
         and of performance under this Indenture has been made under his
         supervision, and

                  (2) to the best of his knowledge, based on such review, (a)
         the Company has fulfilled all its obligations under this Indenture
         throughout such year, or, if there has been a default in the
         fulfillment of any such obligation, specifying each such default known
         to him and the nature and status thereof, and (b) no event has occurred
         and is continuing which is, or after notice or lapse of time or both
         would become, an Event of Default under Section 601, or a Default under
         Section 603, or, if such an event has occurred and is continuing,
         specifying each such event known to him and the nature and status
         thereof.

SECTION 1106.     Guarantor Statement as to Compliance.

         The Guarantor will deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement, which need not comply with Section
102, signed by the Chairman of the Board, a Vice Chairman, the President or a
Vice President and by the Treasurer or an Assistant Treasurer of the Guarantor,
stating, as to each signer thereof, that

                                       70
<PAGE>   80
                  (1) a review of the activities of the Guarantor during such
         year and of performance under this Indenture has been made under his
         supervision, and

                  (2) to the best of his knowledge, based on such review, (a)
         the Guarantor has fulfilled all its obligations under this Indenture
         throughout such year, or, if there has been a default in the
         fulfillment of any such obligation, specifying each such default known
         to him and the nature and status thereof, and (b) no event has occurred
         and is continuing which is, or after notice or lapse of time or both
         would become, an Event of Default under Section 601, or a Default under
         Section 603 or, if such an event has occurred and is continuing,
         specifying each such event known to him and the nature and status
         thereof.

SECTION 1107.     Limitation Upon Disposition of Voting Stock of Company.

         So long as any of the Securities shall be Outstanding, but subject to
the provisions of Article Nine, the Guarantor will not sell, assign, transfer,
grant a security interest in or otherwise dispose of any shares of, securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of the Company, nor will it permit the Company (or any
successor thereto) (a) to issue, except to the Guarantor, any shares of,
securities convertible into or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock of the Company, (b) to merge or consolidate
with another Person, other than the Guarantor, or (c) to sell, assign, transfer,
grant a security interest in or otherwise dispose of or lease all or
substantially all of the assets of the Company.

SECTION 1108.     Waiver of Certain Covenants.

         The Company or the Guarantor, as the case may be, may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 1104 and 1107 with respect to the Securities of any series if before
the time for such compliance the Holders of at least 66 2/3% in principal amount
of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the Guarantor
and the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any such term,
provision or condition. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to waive any such term, provision or condition hereunder, whether or not such
Holders remain Holders after such record date; provided, that unless the Holders
of at least 66 2/3% in principal amount of the Outstanding Securities of such
series shall have waived such term, provision or condition prior to the date
which is 90 days after such record date, any such

                                       71
<PAGE>   81
waiver previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.

                                       72
<PAGE>   82
                                 ARTICLE TWELVE

                            REDEMPTION OF SECURITIES

SECTION 1201.     Applicability of Article.

         Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

SECTION 1202.     Election to Redeem; Notice to Trustee.

         The election of the Company to redeem any Securities of any series
pursuant to Section 1201 shall be evidenced by a Board Resolution. In case of
any redemption at the election of the Company of less than all the Securities of
any series, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.

SECTION 1203.     Selection by Security Registrar of Securities to Be Redeemed.

         If less than all the Securities of any series are to be redeemed, the
Company and the Guarantor shall cause the particular Securities of such series
to be redeemed to be selected not more than 60 days prior to the Redemption Date
by the Security Registrar, from the Outstanding Securities of such series not
previously called for redemption, at random or by such method as the Security
Registrar shall deem fair and appropriate, and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.

         The Company and the Guarantor shall cause the Security Registrar
promptly to notify the Company and the Trustee in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.

         For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to

                                       73
<PAGE>   83
be redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.

SECTION 1204.     Notice of Redemption.

         Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

         All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

                  (3) if less than all the Outstanding Securities of any series
         are to be redeemed, the identification (and, in the case of partial
         redemption of any Securities, the principal amounts) of the particular
         Securities of such series to be redeemed, from the Holder to whom such
         notice is given,

                  (4) that on the Redemption Date the Redemption Price will
         become due and payable upon each such Security to be redeemed and, if
         applicable, that interest thereon will cease to accrue on and after
         said date,

                  (5) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price, and

                  (6) that the redemption is for a sinking fund, if such is the
         case.

         Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Security Registrar in the name and at the expense of the Company.

SECTION 1205.     Deposit of Redemption Price.

         Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust

                                       74
<PAGE>   84
as provided in Section 1103) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities of the particular series or portions
thereof which are to be redeemed on that date.

SECTION 1206.     Securities Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.

         If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
subject to Section 113, until paid, bear interest from the Redemption Date at
the rate prescribed therefor in the Security.

SECTION 1207.     Securities Redeemed in Part.

         Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is so surrendered, such new
Security so issued shall be a new Global Security.

                                       75
<PAGE>   85
                                ARTICLE THIRTEEN

                                  SINKING FUNDS

SECTION 1301.     Applicability of Article.

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

         The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1302. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

SECTION 1302.     Satisfaction of Sinking Fund Payments with Securities.

         The Company (1) may deliver to the Trustee for cancellation Outstanding
Securities of a series (other than any previously called for redemption) and (2)
may apply as a credit Securities of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of
such Securities; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.

SECTION 1303.     Redemption of Securities for Sinking Fund.

         Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1302 and will also deliver to the Trustee any Securities to
be so delivered if not theretofore delivered. Not

                                       76
<PAGE>   86
less than 60 days before each such sinking fund payment date the Company and the
Guarantor shall cause to be selected the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1203 and shall
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1204. The Company shall
deposit the amount of cash, if any, required for such sinking fund payment with
the Trustee or a Paying Agent in the manner provided in Section 1205. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1206 and 1207.

                                       77
<PAGE>   87
                                ARTICLE FOURTEEN

                   SUBORDINATION OF SECURITIES AND GUARANTEES

SECTION 1401.     Securities Subordinate to Senior Indebtedness of the Company.

         The Company covenants and agrees that anything in this Indenture or the
Securities of any series to the contrary notwithstanding, the indebtedness
evidenced by the Securities of each series is subordinate and junior in right of
payment to all Senior Indebtedness of the Company to the extent provided herein,
and each Holder of Securities of each series, by his acceptance thereof,
likewise covenants and agrees to the subordination herein provided and shall be
bound by the provisions hereof. Senior Indebtedness of the Company shall
continue to be Senior Indebtedness of the Company and entitled to the benefits
of these subordination provisions irrespective of any amendment, modification or
waiver of any term of the Senior Indebtedness of the Company or extension or
renewal of the Senior Indebtedness of the Company.

         In the event that the Company shall default in the payment of any
principal of (or premium, if any) or interest on any Senior Indebtedness of the
Company when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise, then, upon written notice
of such default to the Company by the holders of Senior Indebtedness or any
trustee therefor, unless and until such default shall have been cured or waived
or shall have ceased to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of or interest on any of the Securities, or in respect
of any redemption, retirement, purchase or other acquisition of any of the
Securities.

         In the event of

                  (a) any insolvency, bankruptcy, receivership, liquidation,
         reorganization, readjustment, composition or other similar proceeding
         relating to the Company, its creditors or its property,

                  (b) any proceeding for the liquidation, dissolution or other
         winding up of the Company, voluntary or involuntary, whether or not
         involving insolvency or bankruptcy proceedings,

                  (c) any assignment by the Company for the benefit of
         creditors, or

                  (d) any other marshalling of the assets of the Company,

                                       78
<PAGE>   88
         all Senior Indebtedness of the Company (including any interest thereon
accruing after the commencement of any such proceedings) shall first be paid in
full before any payment or distribution, whether in cash, securities or other
property, shall be made to any Holder of any of the Securities on account
thereof. Any payment or distribution, whether in cash, securities or other
property (other than securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Indebtedness of the Company at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities of any series shall be paid
or delivered directly to the holders of Senior Indebtedness of the Company in
accordance with the priorities then existing among such holders until all Senior
Indebtedness of the Company (including any interest thereon accruing after the
commencement of any such proceedings) shall have been paid in full.

         In the event that, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which
are subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Indebtedness of the Company at the time outstanding and to
any securities issued in respect thereof under any such plan of reorganization
or readjustment), shall be received by the Trustee or any Holder in
contravention of any of the terms hereof such payment or distribution or
security shall be received in trust for the benefit of, and shall be paid over
or delivered and transferred to, the holders of the Senior Indebtedness of the
Company at the time outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Indebtedness of
the Company remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness of the Company in full. In the event of the failure of the Trustee
or any Holder to endorse or assign any such payment, distribution or security,
each holder of Senior Indebtedness of the Company is hereby irrevocably
authorized to endorse or assign the same.

         No present or future holder of any Senior Indebtedness of the Company
shall be prejudiced in the right to enforce subordination of the indebtedness
evidenced by the Securities by any act or failure to act on the part of the
Company. Nothing contained herein shall impair, as between the Company and the
Holders of Securities of each series, the obligation of the Company to pay to
such Holders the principal of and interest on such Securities or prevent the
Trustee or the Holder from exercising all rights, powers and remedies otherwise
permitted by applicable law or hereunder upon a Default or Event of Default
hereunder, all subject to the rights of the holders of the Senior Indebtedness
of the Company to receive cash, securities or other property otherwise payable
or deliverable to the Holders.

         Senior Indebtedness of the Company shall not be deemed to have been
paid in full unless the holders thereof shall have received cash, securities or
other property equal to the amount of such Senior Indebtedness of the Company
then outstanding. Upon the payment in full of all

                                       79
<PAGE>   89
Senior Indebtedness of the Company, the Holders of Securities of each series
shall be subrogated to all rights of any holders of Senior Indebtedness of the
Company to receive any further payments or distributions applicable to the
Senior Indebtedness of the Company until the indebtedness evidenced by the
Securities of such series shall have been paid in full, and such payments or
distributions received by such Holders, by reason of such subrogation, of cash,
securities or other property which otherwise would be paid or distributed to the
holders of Senior Indebtedness of the Company, shall, as between the Company and
its creditors other than the holders of Senior Indebtedness of the Company, on
the one hand, and such Holders, on the other hand, be deemed to be a payment by
the Company on account of Senior Indebtedness of the Company, and not on account
of the Securities of such series.

         The Trustee and Holders will take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness of the Company or consent to the filing of a financing statement
with respect thereto) as may, in the opinion of counsel designated by the
holders of a majority in principal amount of the Senior Indebtedness of the
Company at the time outstanding, be necessary or appropriate to assure the
effectiveness of the subordination effected by these provisions.

SECTION 1402.     Guarantees Subordinate to Senior Indebtedness of the
Guarantor.

         The Guarantor covenants and agrees that, anything in this Indenture,
the Securities or the Guarantees to the contrary notwithstanding, the
obligations of the Guarantor under the Guarantees relating to payment of
principal of and interest on the Securities are subordinate and junior in right
of payment to all Senior Indebtedness of the Guarantor to the extent provided
herein, and each Holder, by his acceptance thereof, likewise covenants and
agrees to the subordination herein provided and shall be bound by the provisions
hereof. Senior Indebtedness of the Guarantor shall continue to be Senior
Indebtedness of the Guarantor and entitled to the benefits of these
subordination provisions irrespective of any amendment, modification or waiver
of any term of the Senior Indebtedness of the Guarantor or extension or renewal
of the Senior Indebtedness of the Guarantor.

         In the event the Guarantor shall default in the payment of any
principal of (or premium, if any) or interest on any Senior Indebtedness of the
Guarantor when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise, then, upon written
notice of such default to the Guarantor by the holders of Senior Indebtedness or
any trustee therefor, unless and until such default shall have been cured or
waived or shall have ceased to exist, no direct or indirect payment (in cash,
property, security, by set-off or otherwise) under the Guarantees shall be made
or agreed to be made on account of the principal of or interest on the
indebtedness evidenced by any of the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the Securities.

                                       80
<PAGE>   90
         In the event of

                  (a) any insolvency, bankruptcy, receivership, liquidation,
         reorganization, readjustment, composition or other similar proceeding
         relating to the Guarantor, its creditors or its property,

                  (b) any proceeding for the liquidation, dissolution or other
         winding up of the Guarantor, voluntary or involuntary, whether or not
         involving insolvency or bankruptcy proceedings,

                  (c) any assignment by the Guarantor for the benefit of
         creditors, or

                  (d) any other marshalling of the assets of the Guarantor,

         all Senior Indebtedness of the Guarantor (including any interest
thereon accruing after the commencement of any such proceedings) shall first be
paid in full before any payment or distribution under the Guarantees whether in
cash, securities or other property, shall be made to any Holder of Securities on
account of any Securities. Any payment or distribution under the Guarantees,
whether in cash, securities or other property (other than securities of the
Guarantor or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least, to the extent
provided in these subordination provisions with respect to the Guarantees, to
the payment of all Senior Indebtedness of the Guarantor at the time outstanding
and to any Securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Guarantees
shall be paid or delivered directly to the holders of Senior Indebtedness of the
Guarantor in accordance with the priorities then existing among such holders
until all Senior Indebtedness of the Guarantor (including any interest thereon
accruing after the commencement of any such proceedings) shall have been paid in
full.

         In the event that, notwithstanding the foregoing, any payment or
distribution under the Guarantees of any character or any security, whether in
cash, securities or other property (other than securities of the Guarantor or
any other corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the Guarantees, to the payment of all
Senior Indebtedness of the Guarantor at the time outstanding and to any
securities issued in respect thereto under any such plan of reorganization or
readjustment), shall be received by the Trustee or any Holder of any of the
Securities in contravention of any of the terms hereof, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness of the Guarantor at the time outstanding in accordance with the
priorities then existing among such holders for application to the extent
necessary to pay all such Senior Indebtedness of the Guarantor in full. In the
event of the failure of the Trustee or any Holder to endorse or assign any such
payment, distribution or

                                       81
<PAGE>   91
security, each holder of Senior Indebtedness of the Guarantor is hereby
irrevocably authorized to endorse or assign the same.

         No present or future holder of any Senior Indebtedness of the Guarantor
shall be prejudiced in the right to enforce subordination of the Guarantees by
any act or failure to act on the part of the Guarantor. Nothing contained herein
shall impair, as between the Guarantor and the Holders, the obligation of the
Guarantor under the Guarantees, which is absolute and unconditional, to pay to
the Holders of Securities of each series the principal of and interest on the
Securities of such series, as and when the same shall become due and payable, or
prevent the Trustee or the Holders of Securities of such series from exercising
all rights, powers and remedies otherwise permitted by applicable law or
hereunder upon a Default or Event of Default hereunder, all subject to the
rights of the holders of the Senior Indebtedness of the Guarantor to receive
cash, securities or other property otherwise payable or deliverable under the
Guarantees to such Holders.

         Senior Indebtedness of the Guarantor shall not be deemed to have been
paid in full unless the holders thereof shall have received cash, securities or
other property equal to the amount of such Senior Indebtedness of the Guarantor
then outstanding. Upon the payment in full of all Senior Indebtedness of the
Guarantor, the Trustee and the Holders of Securities of each series shall be
subrogated to all rights of any holders of Senior Indebtedness of the Guarantor
to receive any further payments or distributions applicable to the Senior
Indebtedness of the Guarantor until the Securities of such series shall have
been paid in full, and such payments or distributions received by the Trustee
and the Holders of Securities of such series by reason of such subrogation, of
cash, securities or other property which otherwise would be paid or distributed
to the holders of Senior Indebtedness of the Guarantor, shall, as between the
Guarantor and its creditors other than the holders of Senior Indebtedness of the
Guarantor, on the one hand, and such Holders, on the other hand, be deemed to be
a payment by the Guarantor on account of Senior Indebtedness of the Guarantor
and not under the Guarantees.

         The Trustee and Holders will take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness of the Guarantor or consent to the filing of a financing statement
with respect thereto) as may, in the opinion of counsel designated by the
holders of a majority in principal amount of the Senior Indebtedness of the
Guarantor at the time outstanding, be necessary or appropriate to assure the
effectiveness of the subordination effected by these provisions.

SECTION 1403.     Trustee and Holders of Securities May Rely on Certificate of
Liquidating Agent; Trustee May Require Further Evidence as to Ownership of
Senior Indebtedness; Trustee Not Fiduciary to Holders of Senior Indebtedness.

         Upon any payment or distribution of assets of the Company or the
Guarantor referred to in this Article Fourteen, the Trustee and the Holders
shall be entitled to rely upon an order or decree made by any court of competent
jurisdiction in which such dissolution or winding up or

                                       82
<PAGE>   92
liquidation or reorganization or arrangement proceedings are pending or upon a
certificate of the trustee in bankruptcy, receiver, assignee for the benefit of
creditors or other person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the Senior Indebtedness and other
indebtedness of the Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Fourteen. In the absence of any such bankruptcy trustee,
receiver, assignee or other person, the Trustee shall be entitled to rely upon a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company or the Guarantor (or a trustee or representative on
behalf of such Holder) as evidence that such Person is a holder of such Senior
Indebtedness (or is such a trustee or representative). In the event that the
Trustee determines, in good faith, that further evidence is required with
respect to the right of any person as a holder of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor to participate in any payments
or distributions pursuant to this Article Fourteen, the Trustee may request such
person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness of the Company or Senior Indebtedness of the
Guarantor, as the case may be, held by such person, as to the extent to which
such person is entitled to participate in such payment or distribution, and as
to other facts pertinent to the rights of such person under this Article
Fourteen, and if such evidence is not furnished, the Trustee may offer any
payment to such person pending judicial determination as to the right of such
person to receive such payment. The Trustee, however, shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness of the Company or
Senior Indebtedness of the Guarantor.

SECTION 1404.     Payment Permitted If No Default.

         Nothing contained in this Article Fourteen or elsewhere in this
Indenture, or in any of the Securities or the Guarantees, shall prevent (a) the
Company, at any time except during the pendency of any dissolution, winding up,
liquidation or reorganization proceedings referred to in, or under the
conditions described in, Section 1401, or the Guarantor, at any time except
during the pendency of any dissolution, winding up, liquidation or
reorganization proceedings referred to in, or under the conditions described in,
Section 1402, from making payments at any time of the principal of or interest
on the Securities or under the Guarantees, or (b) the application by the Trustee
or any Paying Agent of any monies deposited with it hereunder to payments of the
principal of or interest on the Securities or under the Guarantees, if, at the
time of such deposit, the Trustee or such Paying Agent, as the case may be, did
not have the written notice provided for in Section 1405 of any event
prohibiting the making of such deposit, or if, at the time of such deposit
(whether or not in trust) by the Company or the Guarantor, as the case may be,
with the Trustee or any Paying Agent (other than the Company or the Guarantor)
such payment would not have been prohibited by the provisions of this Article,
and the Trustee or any Paying Agent shall not be affected by any notice to the
contrary received by it on or after such date.

                                       83
<PAGE>   93
SECTION 1405.     Trustee Not Charged with Knowledge of Prohibition.

         Anything in this Article Fourteen or elsewhere in this Indenture
contained to the contrary notwithstanding, the Trustee shall not at any time be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee and shall be entitled
conclusively to assume that no such facts exist and that no event specified in
Section 1401 or Section 1402 has happened, until the Trustee shall have received
an Officer's Certificate of the Company or the Guarantor, as the case may be, to
that effect or notice in writing to that effect signed by or on behalf of the
holder or holders, or their representatives, of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor, as the case may be, who shall
have been certified by the Company or the Guarantor or otherwise established to
the reasonable satisfaction of the Trustee to be such holder or holders or
representatives or from any trustee under any indenture pursuant to which such
Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor, as
the case may be, shall be outstanding; provided that, if prior to the third
Business Day preceding the date upon which by the terms hereof any monies become
payable (including, without limitation, the payment of either the principal of
or interest on any Security), or in the event of the execution of an instrument
pursuant to Section 501 acknowledging satisfaction and discharge of this
Indenture, then if prior to the second Business Day preceding the date of such
execution, the Trustee or any Paying Agent shall not have received with respect
to such monies the Officers' Certificate or notice provided for in this Section
1405, then, anything herein contained to the contrary notwithstanding, the
Trustee or such Paying Agent shall have full power and authority to receive such
monies and apply the same to the purpose for which they were received and shall
not be affected by any notice to the contrary which may be received by it on or
after such date. The Company and the Guarantor shall give prompt written notice
to the Trustee and to the Paying Agent of any facts which would prohibit the
payment of monies to or by the Trustee or any Paying Agent.

SECTION 1406.     Trustee to Effectuate Subordination.

         Each Holder of Securities by his acceptance thereof authorizes and
directs the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as between such Holder and holders
of Senior Indebtedness of the Company or the Guarantor, as the case may be, as
provided in this Article and appoints the Trustee its attorney-in-fact for any
and all such purposes.

SECTION 1407.     Rights of Trustee as Holder of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor.

         The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor which may at the time be held by it, to the same
extent as any other holder of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor; provided that nothing in this Indenture shall
deprive the

                                       84
<PAGE>   94
Trustee of any of its rights as such holder and provided further that nothing in
this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 707.

SECTION 1408.     Article Applicable to Paying Agents.

         In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if the Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that Sections 1405 and 1407 shall not apply to the Company or the Guarantor or
any Affiliate of the Company or the Guarantor if the Company or the Guarantor or
such Affiliate acts as Paying Agent.

                                       85
<PAGE>   95
                                 ARTICLE FIFTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1501.     Company's Option To Effect Defeasance Or Covenant Defeasance.

         The Company may elect, at its option at any time, to have Section 1502
or Section 1503 applied to any Securities or any series of Securities, as the
case may be, designated pursuant to Section 301 as being defeasible pursuant to
such Section 1502 or 1503, in accordance with any applicable requirements
provided pursuant to Section 301 and upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 301 for
such Securities.

SECTION 1502.     Defeasance And Discharge.

         Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, each
of the Company and the Guarantor shall be deemed to have been discharged from
its respective obligations with respect to such Securities as provided in this
Section on and after the date the conditions set forth in Section 1504 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and that each of the Company and the
Guarantor shall be deemed to have satisfied all its obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1504 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 707, 1102 and 1103, (3) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option (if
any) to have Section 1503 applied to such Securities.

SECTION 1503.     Covenant Defeasance.

         Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be (1)
each of the Company and the Guarantor shall be released from its respective
obligations under Sections 1105 through 1108, inclusive, and any covenants
provided pursuant to Section 301(12), 1001(2) or 1001(6) for the

                                       86
<PAGE>   96
benefit of the Holders of such Securities and (2) the occurrence of any event
specified in Section 603(3) (with respect to any of Sections 1105 through 1108,
inclusive, and any such covenants provided pursuant to Section 301(12), 1001(2)
or 1001(6)) shall be deemed not to be or result in a Default, in each case with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1504 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, each of the Company and the Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so specified
in the case of Section 603(3)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.

SECTION 1504.     Conditions To Defeasance Or Covenant Defeasance.

         The following shall be the conditions to the application of Section
1502 or Section 1503 to any Securities or any series of Securities, as the case
may be:

                  (1) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee (or another trustee which satisfies the
         requirements contemplated by Section 709 and agrees to comply with the
         provisions of this Article applicable to it) as trust funds in trust
         for the purpose of making the following payments, specifically pledged
         as security for, and dedicated solely to, the benefits of the Holders
         of such Securities, (A) money in an amount, or (B) U.S. Government
         Obligations which through the scheduled payment of principal and
         interest 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 (C) such other obligations or arrangements as
         may be specified as contemplated by Section 301 with respect to such
         Securities, or (D) a combination thereof, in each case sufficient, in
         the opinion of a nationally recognized firm of independent public
         accountants expressed in a written certification thereof delivered to
         the Trustee, to pay and discharge, and which shall be applied by the
         Trustee (or any such other qualifying trustee) to pay and discharge,
         the principal of and any premium and interest on such Securities on the
         respective Stated Maturities, in accordance with the terms of this
         Indenture and such Securities. As used herein, "U.S. Government
         Obligation" means (x) any security which is (i) a direct obligation of
         the United States of America for the payment of which the full faith
         and credit of the United States of America is pledged or (ii) an
         obligation 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 (i)
         or (ii), is not callable or redeemable at the option of the issuer
         thereof, and (y) any depositary receipt issued by a bank (as defined in
         Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian
         with respect to any U.S. Government Obligation which is specified in
         Clause (C) above and held by such bank for the account of the holder of
         such depositary receipt, or with respect to any

                                       87
<PAGE>   97
         specific payment of principal of or interest on any U.S. Government
         Obligation which is so specified and held, 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 principal or interest evidenced
         by such depositary receipt.

                  (2) In the event of any election to have Section 1502 apply to
         any Securities or any series of Securities, as the case may be, the
         Company shall have delivered to the Trustee an Opinion of Counsel
         stating that (A)(x) the Company has received from, or there has been
         published by, the Internal Revenue Service a ruling or (y) since the
         date of this instrument, there has been a change in the applicable
         Federal income tax law, in either case (x) or (y) to the effect that,
         and based thereon such opinion shall confirm that, the Holders of such
         Securities will not recognize gain or loss for Federal income tax
         purposes as a result of the deposit, Defeasance and discharge to be
         effected with respect to such Securities and will be subject to Federal
         income tax on the same amount, in the same manner and at the same times
         as would be the case if such deposit, Defeasance and discharge were not
         to occur and (B) if Securities are then listed on the New York Stock
         Exchange, to the effect that the Securities of such Series will not be
         delisted as a result of such election.

                  (3) In the event of any election to have Section 1503 apply to
         any Securities or any series of Securities, as the case may be, the
         Company shall have delivered to the Trustee an Opinion of Counsel to
         the effect that the Holders of such Securities will not recognize gain
         or loss for Federal income tax purposes as a result of the deposit and
         Covenant Defeasance to be effected with respect to such Securities and
         will be subject to Federal income tax on the same amount, in the same
         manner and at the same times as would be the case if such deposit and
         Covenant Defeasance were not to occur.

                  (4) The Company shall have delivered to the Trustee an
         Officers' Certificate to the effect that neither such Securities nor
         any other Securities of the same series, if then listed on any
         securities exchange, will be delisted as a result of such deposit.

                  (5) No event which is, or after notice or lapse of time or
         both would become, a Default or an Event of Default with respect to
         such Securities or any other Securities shall have occurred and be
         continuing at the time of such deposit or, with regard to any such
         event specified in Sections 601(1) and (2), at any time on or prior to
         the 90th day after the date of such deposit (it being understood that
         this condition shall not be deemed satisfied until after such 90th
         day).

                  (6) Such Defeasance or Covenant Defeasance shall not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

                                       88
<PAGE>   98
                  (7) Such Defeasance or Covenant Defeasance shall not result in
         a breach or violation of, or constitute a default under, any other
         agreement or instrument to which the Company is a party or by which it
         is bound.

                  (8) Such Defeasance or Covenant Defeasance shall not result in
         the trust arising from such deposit constituting an investment company
         within the meaning of the Investment Company Act of 1940, as amended
         unless such trust shall be registered under the Act or exempt from
         registration thereunder.

                  (9) The Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent with respect to such Defeasance or Covenant
         Defeasance have been complied with.

SECTION 1505.     Deposited Money And U.S. Government Obligations To Be Held In
Trust; Miscellaneous Provisions.

         Subject to the provisions of the last paragraph of Section 1103, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section and Section 1506, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1504 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.

         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 1504 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.

         Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1504 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

                                       89
<PAGE>   99

SECTION 1506.     Reinstatement.

         If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1502 or 1503 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1505 with respect to such Securities
in accordance with this Article; PROVIDED, HOWEVER, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.

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

                                       90
<PAGE>   100
         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

         MELLON FUNDING CORPORATION

         [CORPORATE SEAL]

         By STEVEN G. ELLIOTT

         President and Chief Executive Officer

Attest: MICHELE BOXBERGER

         Secretary

         MELLON FINANCIAL CORPORATION

         [CORPORATE SEAL]

         By MARTIN G. MCGUINN

         Chairman and Chief Executive Officer

Attest:

         CARL KRASIK

         Secretary

                                       91
<PAGE>   101
         BANK ONE TRUST COMPANY, N.A.

         [CORPORATE SEAL]

By R. TARNAS

Authorized Officer

Attest: KEITH RICHARDSON

                                       92
<PAGE>   102
COMMONWEALTH OF PENNSYLVANIA

COUNTY OF ALLEGHENY

ss:

         On the 12th day of June, 2000, before me personally came STEVEN G.
ELLIOTT, to me known, who, being by me duly sworn, did depose and say that he is
President and Chief Executive Officer of MELLON FUNDING CORPORATION, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.

[NOTARIAL SEAL]

         /s/_______________________________

         Notary Public

         Notarial Seal ,

         Notary Public MARY BETH DOUGLASS

         Pittsburgh, Allegheny County

         My Commission Expires October 6, 2003
                               ---------------

         Member, Pennsylvania Association of Notaries

                                       93
<PAGE>   103
COMMONWEALTH OF PENNSYLVANIA

COUNTY OF ALLEGHENY

         ss:

         On the 12th day of June, 2000, before me personally came MARTIN G.
MCGUINN, to me known, who, being by me duly sworn, did depose and say that he is
Chairman and Chief Executive Officer of MELLON FINANCIAL CORPORATION, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.

[NOTARIAL SEAL]

         /s/_______________________________

         Notary Public

         Notarial Seal ,

         Notary Public MARY BETH DOUGLASS

         Pittsburgh, Allegheny County

         My Commission Expires October 6, 2003
                               ---------------

         Member, Pennsylvania Association of Notaries

                                       94
<PAGE>   104
STATE OF ILLINOIS COUNTY OF COOK

         ss:

         On the 12th day of June, 2000 before me, MARIA C. BIRRUETA, Notary
Public, personally appeared R. TARNAS, personally known to me or, proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

MARIA C. BIRRUETA

[NOTARIAL SEAL]

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

    Comm. #___________________

    Notary Public-Illinois

    My Comm. Expires 11/13/00

                                       95<PAGE>   1
                                                                    EXHIBIT 10.1

                        BANK OF AMERICA COMMITMENT LETTER

                                 USA TRUCK, INC.

April 11, 2000

Mr. Jerry D. Orler
Vice President, Finance and Chief Financial Officer
USA Truck Inc.
3108 Industrial Park Road
Van Buren, AR  72956

Re:      $60,000,000 Senior Credit Facility

Mr. Orler:

Bank of America, N.A. ("Bank of America"), SunTrust Bank., and Mercantile Bank
N.A. and their respective successors and assigns (individually a "Lender" and
collectively the "Lenders") are pleased to advise USA Truck Inc. (the
"Borrower") of their respective commitments, as set forth below, which aggregate
$60,000,000 on a revolving credit basis in the Senior Credit Facility (the
"Senior Credit Facility" or "Facility"). Each Lender, by signing this letter,
commits to lend the amount set forth opposite its name on the signature page
upon and subject to the terms and conditions of this letter and the Summary of
Terms and Conditions attached hereto (the "Summary of Terms"). Unless otherwise
defined herein, capitalized terms shall have the meanings set forth in the
Summary of Terms.

Proceeds of the Senior Credit Facility will be used to refinance existing
corporate indebtedness' and provide for working capital and other various
purposes as outlined in accordance with the Summary of Terms.

Bank of America will act as sole and exclusive Administrative Agent, and as sole
and exclusive Lead Arranger and Book Manager for the Facility. No additional
agents, co-agents or arrangers will be appointed and no other titles will be
awarded without Bank of America's prior written approval.

The commitment of the Lenders hereunder and the agreement of Bank of America to
provide the services described herein are subject to the satisfaction of each of
the following conditions precedent: (a) compliance with each of the terms and
conditions set forth herein and in the Summary of Terms in a manner satisfactory
to Lenders; (b) the completion of all due diligence with respect to the Borrower
and its subsidiaries, if any; (c) the negotiation, execution and delivery of
definitive documentation for the Facility consistent with the Summary of Terms
and otherwise satisfactory to each of the Lenders; (d) since the date hereof,
there shall not have occurred and be continuing a material adverse change in or
material disruption of conditions in the financial, banking or capital markets
which, in the sole discretion of Bank of America, are material in connection
with the syndication of the Facility; (e) there shall not have occurred or
become known any change, occurrence or development that could, in the opinion of
Lenders, have a material adverse effect on the business, assets, liabilities
(actual or contingent), operations, condition (financial or otherwise); and (f)
none of the Lenders shall become aware after the date hereof of any information
or other matter which in its judgment is inconsistent in a material and adverse
manner with any information or other matter disclosed to it prior to the date
hereof (in which case

<PAGE>   2

Bank of America may (i) suggest alternative financing amounts or structures that
ensure adequate protection for the Lenders and shall be subject to the approval
of all the Lenders in their sole discretion or (ii) terminate this letter and
any commitment or undertaking hereunder).

You hereby represent, warrant and covenant that (a) all information, other than
Projections (defined below), which has been or is hereafter made available to
Bank of America or the Lenders by you or any of your representatives in
connection with the transactions contemplated hereby (the "Information") is and
will be complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading, and (b) all
financial projections concerning the Borrower that have been or are hereafter
made available to Bank of America or the Lenders by you or any of your
representatives (the "Projections") have been or will be prepared in good faith
based upon assumptions you believe to be reasonable. You agree to furnish Bank
of America with such Information and Projections as it may reasonably request
and to supplement the Information and the Projections from time to time until
the closing date for the Facility so that the representation, warranty and
covenant in the preceding sentence is correct on such closing date. You
understand that in arranging and syndicating the Facility, Bank of America has
been using and relying on the Information and the Projections without
independent verification thereof.

By acceptance of this offer, USA Truck Inc. agrees to pay all reasonable
out-of-pocket fees and expenses (including reasonable attorneys' fees and
expenses and due diligence expenses of Bank of America) incurred before or after
the date hereof by Bank of America in connection with the Facility and the
syndication thereof.

You agree to indemnify and hold harmless Bank of America, each Lender and each
of their affiliates and their directors, officers, employees, advisors and
agents (each, an "Indemnified Party") from and against (and will reimburse each
Indemnified Party as the same are incurred) any and all losses, claims, damages,
liabilities, and expenses (including, without limitation, the reasonable fees
and expenses of counsel and the allocated cost of internal counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) any matters contemplated by
this letter, any related transaction, the Facility or any use made or proposed
to be made with the proceeds thereof unless and only to the extent that, as to
any Indemnified Party, it shall be determined in a final, nonappealable judgment
by a court of competent jurisdiction that such losses, claims, damages,
liabilities or expenses resulted primarily from the gross negligence or willful
misconduct of such Indemnified Party. You agree that no Indemnified Party shall
have any liability for any indirect or consequential damages in connection with
its activities related to the Facility.

The terms of this letter, the Summary of Terms and the fee letter between you
and Bank of America (the "Fee Letter") are confidential and, except for
disclosure on a confidential basis to your accountants, attorneys and other
professional advisors retained by you in connection with the Facility or as may
be required by law, may not be disclosed in whole or in part to any other person
or entity without the prior written consent of Bank of America.

The provisions of the immediately preceding three paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Facility shall be executed and notwithstanding the termination of this letter or
any commitment or undertaking hereunder.

This letter and the Fee Letter shall be governed by laws of the State of
Missouri. This letter, together with the Summary of Terms and the Fee Letter,
are the only agreements that have been entered into among Bank of America, the
Lenders and you with respect to the Facility and set forth the entire
understanding of the parties with respect thereto. This letter may be modified
or amended only by the written agreement

<PAGE>   3

of all of us. This letter is not assignable by USA Truck Inc. without our prior
written consent and is intended to be solely for the benefit of the parties
hereto and the Indemnified Parties.

This offer will expire at 5:00 p.m. St. Louis time on Friday, April 14, 2000
unless you execute this letter and the Fee Letter and return them to the
Administrative Agent prior to that time (which may be by facsimile
transmission), whereupon this letter and the Fee Letter (each of which may be
signed in one or more counterparts) shall become binding agreements. Thereafter,
this undertaking and commitment will expire on June 1, 2000 unless definitive
documentation for the Facilities is executed and delivered prior to such date.

ORAL AGREEMENTS OF COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (LENDERS) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.

We are pleased to have the opportunity to work with you in connection with this
important financing.

Very truly yours,

<TABLE>
<S>                                          <C>
BANK OF AMERICA, N.A.                        Amount Committed: $24,000,000.00

By:      /s/ John Suskie
   -----------------------------------
Title: V. P.

SUNTRUST BANK                                Amount Committed: $18,000,000.00

By:      /s/ Tim Wagner
   -----------------------------------
Title: F. V. P.

MERCANTILE BANK, N.A.                        Amount Committed: $18,000,000.00

By:      /s/ Eric Hartman
   -----------------------------------
Title: A.V. P.
</TABLE>

Accepted and agreed to as of April 11, 2000: and we agree to accept and close
the Senior Credit Facility in accordance with the above terms.

USA Truck Inc.

By:      /s/ Jerry D. Orler
   -----------------------------------
Title:   V. P., CFO, & SEC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}]]