-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kp17oS0amWVn2YQY8AuC5LhFHdfBHV86TEhpJ0IUIUTKH2bQVII05xwqD2xTzHMw IDtKI2ujAozByuZKXU8TiQ== 0000950128-00-000562.txt : 20000327 0000950128-00-000562.hdr.sgml : 20000327 ACCESSION NUMBER: 0000950128-00-000562 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20000324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MELLON FUNDING CORP CENTRAL INDEX KEY: 0000317598 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251233834 STATE OF INCORPORATION: PA FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-33248 FILM NUMBER: 578170 BUSINESS ADDRESS: STREET 1: 500 GRANT ST STREET 2: ONE MELLON BANK CENTER CITY: PITTSBURGH STATE: PA ZIP: 15258 BUSINESS PHONE: 4122345000 FORMER COMPANY: FORMER CONFORMED NAME: MELLON FINANCIAL CO DATE OF NAME CHANGE: 19930512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MELLON FINANCIAL CORP CENTRAL INDEX KEY: 0000064782 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251233834 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-33248-01 FILM NUMBER: 578171 BUSINESS ADDRESS: STREET 1: ONE MELLON BANK CTR STREET 2: 500 GRANT ST CITY: PITTSBURGH STATE: PA ZIP: 15258-0001 BUSINESS PHONE: 4122345000 FORMER COMPANY: FORMER CONFORMED NAME: MELLON BANK CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MELLON NATIONAL CORP DATE OF NAME CHANGE: 19841014 S-3 1 MELLON FUNDING CORPORATION 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 2000 REGISTRATION NOS. 333- 333- -01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ MELLON FUNDING CORPORATION MELLON FINANCIAL CORPORATION (EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR RESPECTIVE CHARTERS) ------------------------ PENNSYLVANIA PENNSYLVANIA (STATE OR OTHER JURISDICTION OF INCORPORATION OR (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) ORGANIZATION) 25-1387025 25-1233834 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
ONE MELLON CENTER 500 GRANT STREET PITTSBURGH, PENNSYLVANIA 15258 (412) 234-5000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) ------------------------ CARL KRASIK, ESQ. SECRETARY AND ASSOCIATE GENERAL COUNSEL MELLON FINANCIAL CORPORATION ONE MELLON CENTER 500 GRANT STREET PITTSBURGH, PENNSYLVANIA 15258 (412) 234-5222 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) With a copy to: ROBERT K. MORRIS, ESQ. MARK J. WELSHIMER, ESQ. REED SMITH SHAW & MCCLAY SULLIVAN & CROMWELL 435 SIXTH AVENUE 125 BROAD STREET PITTSBURGH, PENNSYLVANIA 15219 NEW YORK, NEW YORK 10004 (412) 288-3126 (212) 558-4000
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time on or after the effective date of this Registration Statement, as determined in light of market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PROPOSED PROPOSED AMOUNT MAXIMUM MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE - --------------------------------------------------------------------------------------------------------------------------- Debt Securities........................... $1,500,000,000(1) 100%(2) $1,500,000,000 $396,000 Guarantees--constituting guarantees of the Debt Securities by Mellon Financial Corporation............................. $1,500,000,000 (3) (3) None - --------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------
(1) In no event will the aggregate initial offering price of the Debt Securities issued under this Registration Statement exceed $1,500,000,000 or the equivalent thereof in foreign currencies or currency units (based on the dates of issuance). Such amount represents the principal amount of any Debt Securities issued at their principal face amount and the issue price rather than the principal amount of any Debt Securities issued at an original issue discount. (2) Estimated solely for the purpose of calculating the registration fee under Rule 457. (3) No separate consideration will be received for the Guarantees. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION; PRELIMINARY PROSPECTUS DATED MARCH 24, 2000 PROSPECTUS MELLON FUNDING CORPORATION $1,500,000,000 DEBT SECURITIES UNCONDITIONALLY GUARANTEED BY MELLON FINANCIAL CORPORATION By this prospectus we may offer from time to time up to $1,500,000,000 of guaranteed debt securities. When we offer debt securities, we will provide you with a prospectus supplement describing the terms of the specific issue of debt securities including the offering price of the debt securities. You should read this prospectus and the accompanying prospectus supplement carefully before you invest. We may sell these debt securities to or through underwriters, and also to other purchasers or through agents. The names of any underwriters or agents will be set forth in an accompanying prospectus supplement. ------------------------ The debt securities are not deposits or other obligations of any bank or savings association and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. ------------------------ NEITHER THE SECURITIES AND EXCHANGE COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE DEBT SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS , 2000. 3 FORWARD-LOOKING STATEMENTS This prospectus, any applicable prospectus supplement and the documents incorporated by reference into this prospectus or any applicable prospectus supplement include forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things: - changes in political and economic conditions; - competitive product and pricing pressures within our markets; - equity and fixed-income market fluctuations; - personal and corporate customers' bankruptcies; - inflation; - acquisitions and integrations of acquired businesses; - technological change; - changes in law; - changes in fiscal, monetary, regulatory, trade and tax policies and laws; - monetary fluctuations; - success in gaining regulatory approvals when required; - success in the timely development of new products and services; - interest rate fluctuations; - consumer spending and saving habits; and - levels of third parties' funds under management. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus, any applicable prospectus supplement and the documents incorporated by reference into this prospectus and any applicable prospectus supplement might not occur. 2 4 THE COMPANY MELLON FINANCIAL CORPORATION Mellon Financial Corporation, formerly Mellon Bank Corporation, is a global multibank financial holding company incorporated under the laws of the Commonwealth of Pennsylvania and registered under the Federal Bank Holding Company Act of 1956, as amended. Our principal subsidiaries are Mellon Bank, N.A., The Boston Company, Inc., Buck Consultants, Inc., Newton Management Limited and a number of companies known as Mellon Financial Services Corporations. Mellon Bank's subsidiaries include The Dreyfus Corporation, one of the nation's largest mutual fund management companies, and Founders Asset Management, LLC. At December 31, 1999, we had total assets of $47.9 billion, loans net of the reserve for credit losses of $29.8 billion and total shareholders' equity of $4.0 billion. Our net income for the year ended December 31, 1999 was $963 million. Our banking subsidiaries engage in retail financial services, commercial banking, trust and custody services, investment management services, mutual fund activities, equipment leasing, selling insurance products and various securities-related activities. Buck Consultants, Inc., a global actuarial and human resources consulting firm, provides a broad array of services in the areas of defined benefit and defined contribution plans, communications and compensation consulting, and outsourcing and administration of employee benefit programs. The Mellon Financial Services Corporations, though their subsidiaries and joint ventures, provide a broad range of bank-related services, including equipment leasing, commercial loan financing, stock transfer services, cash management and numerous trust and investment management services. Our principal executive office is located at One Mellon Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258 (telephone (412) 234-5000). MELLON FUNDING CORPORATION Mellon Funding Corporation, a wholly owned subsidiary of Mellon Financial Corporation, is incorporated in Pennsylvania. It functions as a financing entity for the corporation and our subsidiaries and affiliates by issuing commercial paper and other debt guaranteed by Mellon Financial Corporation. Financial data for Mellon Funding Corporation is combined with Mellon Financial Corporation and with Mellon Capital I and Mellon Capital II, special purpose business trusts formed by Mellon Financial Corporation for the sole purpose of issuing capital securities, for financial reporting purposes due to the limited function of Mellon Funding Corporation and the unconditional guarantees by Mellon Financial Corporation of all of the obligations of Mellon Funding Corporation, Mellon Capital I and Mellon Capital II. RATIOS OF EARNINGS TO FIXED CHARGES The following table sets forth certain information regarding our ratios of earnings to fixed charges. Fixed charges represent interest expense, one-third (the proportion deemed represen- 3 5 tative of the interest factor) of net rental expense, trust-preferred securities expense and amortization of debt issuance costs.
YEAR ENDED DECEMBER 31, ------------------------------------ 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Mellon Financial Corporation (parent corporation)... 4.15 2.24 3.01 4.46 5.88 Mellon Financial Corporation and its subsidiaries Excluding interest on deposits................. 3.53 3.33 3.35 3.86 3.45 Including interest on deposits................. 2.02 1.87 1.85 1.88 1.82
Parent corporation ratios include the accounts of Mellon Financial Corporation, Mellon Funding Corporation, Mellon Capital I and Mellon Capital II. Here, earnings represent income before taxes, plus the fixed charges of Mellon Financial Corporation, but exclude equity in undistributed net income (loss) of subsidiaries. Consequently, these ratios vary with the payment of dividends by such subsidiaries. In the ratios for Mellon Financial Corporation and its subsidiaries, earnings represent consolidated income before income taxes and the cumulative effect of a change in accounting principle, plus consolidated fixed charges. We have presented these ratios both including and excluding interest on deposits in consolidated fixed charges. The ratio for 1999 excludes from earnings a $127 million pre-tax net gain from divestitures and $56 million pre-tax of nonrecurring expenses. Had these computations included the net gain from divestitures and nonrecurring expenses, the ratio of earnings to fixed charges would have been 3.65, excluding interest on deposits, and 2.07, including interest on deposits. USE OF PROCEEDS We intend to use the net proceeds from the sale of the debt securities for general corporate purposes, including working capital, capital expenditures, investments in or loans to our subsidiaries, refinancing of debt, including outstanding commercial paper and other short-term indebtedness, if any, redemption or repurchase of shares of our outstanding common stock, funding of possible acquisitions, the satisfaction of other obligations, or for such other purposes as may be specified in the applicable prospectus supplement. REGULATORY CONSIDERATIONS As a financial holding company and a bank holding company, Mellon Financial Corporation is subject to regulation, supervision and examination of the Board of Governors of the Federal Reserve System under the Bank Holding Company Act, as amended by the Gramm Leach Bliley Act. Mellon Financial Corporation's election to become a financial holding company became effective as of March 13, 2000. For a discussion of the material elements of the regulatory framework applicable to financial holding companies, bank holding companies and their subsidiaries and specific information relevant to us, including regulatory limitations on the transfer of funds from bank subsidiaries, reference is made to our annual report on Form 10-K for the fiscal year ended December 31, 1999 and any other subsequent report filed with the SEC by us, which are incorporated by reference in this prospectus. This regulatory framework is intended primarily 4 6 for the protection of depositors and the federal deposit insurance funds and not for the protection of security holders. Our earnings are affected by the legislative and governmental actions of various regulatory authorities, including the Federal Reserve, the Office of the Comptroller of the Currency, which is the principal regulator of our bank subsidiaries, and the Federal Deposit Insurance Corporation, which insures, up to applicable limits, the deposits of all of our full-service banking subsidiaries. In addition, there are numerous governmental requirements and regulations which affect our business activities. A change in applicable statutes, regulations or regulatory policy may have a material effect on our business. Depository institutions such as our bank subsidiaries are also affected by various federal laws, including those relating to consumer protection and similar matters. We also have other financial service subsidiaries that are subject to regulation, supervision and examination by the Federal Reserve, as well as other applicable state and federal regulatory agencies and self- regulatory organizations. For example, our brokerage and asset management subsidiaries are subject to supervision and regulation by the SEC, the NASD, the NYSE and state securities regulators. Our other nonbank subsidiaries may be subject to other laws and regulations of the federal government, the various U.S. states or the foreign countries in which they are authorized to do business. DESCRIPTION OF DEBT SECURITIES AND GUARANTEES As required by Federal law for all bonds and notes of companies that are publicly offered, the debt securities are governed by documents called "indentures." Each indenture is a contract between us and the institution, named in the applicable prospectus supplement, which acts as trustee for the debt securities. There may be more than one trustee under each indenture for different series of debt securities. The trustee has two main roles. First, the trustee can enforce your rights against us if we default. There are limitations on the extent to which the trustee acts on your behalf, which we describe later on page 18 under "Remedies If An Event of Default Occurs." Second, the trustee performs certain administrative duties for us. This section and your prospectus supplement summarize all the material terms of each indenture and your debt security. They do not, however, describe every aspect of each indenture and your debt security. Each indenture and its associated documents, including your debt security, contain the full text of the matters described in this section and your prospectus supplement. Each indenture and the debt securities are governed by Pennsylvania law. A copy of each indenture has been filed with the SEC as part of our registration statement. See "Where You Can Find More Information" on page 22 for information on how to obtain a copy. DEBT SECURITIES We may issue either senior debt securities or subordinated debt securities. The senior and subordinated debt securities are issued under different indentures and may have different trustees. The forms of subordinated indenture and senior indenture are exhibits to the 5 7 registration statement of which this prospectus is a part. See "Where You Can Find More Information" on page 22 for information on how to obtain a copy. When we refer to the indenture we mean both the senior indenture and the subordinated indenture unless we indicate otherwise. When we refer to the trustee, we mean both the senior trustee and the subordinated trustee unless we indicate otherwise. We may issue as many distinct series of debt securities under each indenture as we wish. We are not limited to an aggregate principal amount of debt securities under either indenture. This section summarizes terms of the debt securities that are common to all series. We also include references in parentheses to certain sections of the indenture. Most of the material financial and other specific terms of the debt securities particular to your series will be described in the prospectus supplement relating to your series. The prospectus supplement relating to your series of debt securities will describe the following terms of your series: - the title of your series of debt securities; - any limit on the aggregate principal amount or initial offering price of your series of debt securities; - the date or dates on which your series of debt securities will mature; - the annual rate or rates (which may be fixed or variable) at which your series of debt securities will bear interest, if any, and the date or dates from which the interest, if any, will accrue; - the dates on which interest, if any, on your series of debt securities will be payable and the regular record dates for those interest payment dates; - the place where the principal and interest are payable; - the person to whom interest is payable if other than the registered holder on the record date; - any mandatory or optional sinking funds or analogous provisions or provisions for redemption at your option; - the date, if any, after which and the price or prices at which your series of debt securities may, in accordance with any optional or mandatory redemption provisions, be redeemed and the other detailed terms and provisions of any such optional or mandatory redemption provision; - if other than denominations of $1,000 and any integral multiple thereof, the denomination in which your series of debt securities will be issuable; - if other than the principal amount thereof, the portion of the principal amount of your series of debt securities which will be payable upon the declaration of acceleration of the maturity of those debt securities; - any events of default in addition to those in the indenture; - any other covenant or warranty in addition to those in the indenture; - if debt securities are sold for one or more foreign currencies or foreign currency units, or principal, interest or premium are payable in foreign currencies or foreign currency 6 8 units, the restrictions, elections, tax consequences, and other information regarding the issue and currency or currency units; - the currency of payment of principal, premium, if any, and interest on your series of debt securities if other than in U.S. dollars; - any index or formula used to determine the amount of payment of principal of, premium, if any, and interest on your series of debt securities; - if the principal of and premium, if any, or interest on the series of debt securities are to be payable, at our or your election, in a coin or currency other than that in which the debt securities are to be payable, the coin or currency of payment, the period or periods within which, and the terms and conditions upon which the election may be made; - the applicability of the provisions described under "Defeasance" on page 16; - whether any debt securities will be certificated securities or will be issued in the form of one or more global securities and the depositary for the global security or securities; - whether your series of debt securities are subordinated debt securities or senior debt securities; - if your series of debt securities are subordinated debt securities, whether the subordination provisions summarized below or different subordination provisions will apply; - if debt securities are sold bearing no interest or below market interest, known as original issue discount securities, amounts payable upon acceleration and special tax, accounting and other considerations; - the price or prices at which your series of debt securities will be issued; and - any other material terms of your series of debt securities. Those terms may vary from the terms described here. Thus, this summary also is subject to and qualified by reference to the description of the particular terms of your series to be described in the prospectus supplement. GUARANTEES Mellon Financial Corporation will unconditionally guarantee the punctual payment of the principal, any premium, any interest and any sinking fund payments on the debt securities when they become due from maturity, acceleration, redemption or otherwise. The guarantees of the senior debt securities rank equally with all other general credit obligations of Mellon Financial Corporation. The guarantees of the subordinated debt securities are subordinate to all senior debt of Mellon Financial Corporation. Because Mellon Financial Corporation is a holding company, the rights of our creditors, including you if you hold debt securities and the guarantees are enforced, to share in distributions from any subsidiary, will be subject to prior claims of that subsidiary's creditors, including depositors if the subsidiary is a bank. Regulatory considerations also impact the transfer of funds from bank subsidiaries as we discuss in "Regulatory Considerations." 7 9 LEGAL OWNERSHIP OF DEBT SECURITIES We refer to those who have debt securities registered in their own names, on the books that we or the trustee maintain for this purpose, as the "holders" of those debt securities. These persons are the legal holders of the debt securities. We refer to those who, indirectly through others, own beneficial interests in debt securities that are not registered in their own names as indirect holders of those debt securities. As we discuss below, indirect holders are not legal holders, and investors in debt securities issued in book-entry form or in street name will be indirect holders. BOOK-ENTRY HOLDERS We will issue debt securities in book-entry form only, unless we specify otherwise in the applicable prospectus supplement. This means debt securities will be represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary's book-entry system. These participating institutions, in turn, hold beneficial interests in the debt securities on behalf of themselves or their customers. Under each indenture, only the person in whose name a debt security is registered is recognized as the holder of that debt security. Consequently, for debt securities issued in global form, we will recognize only the depositary as the holder of the debt securities and we will make all payments on the debt securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the debt securities. As a result, investors will not own debt securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary's book-entry system or holds an interest through a participant. As long as the debt securities are issued in global form, investors will be indirect holders, and not holders, of the debt securities. STREET NAME HOLDERS In the future we may terminate a global security or issue debt securities initially in non-global form. In these cases, investors may choose to hold their debt securities in their own names or in "street name". Debt securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those debt securities through an account he or she maintains at that institution. For debt securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in whose names the debt securities are registered as the holders of those debt securities and we will make all payments on those debt securities to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or 8 10 because they are legally required to do so. Investors who hold debt securities in street name will be indirect holders, not holders, of those debt securities. LEGAL HOLDERS Our obligations, as well as the obligations of the trustee and those of any third parties employed by us or the trustee, run only to the legal holders of the debt securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect holder of a debt security or has no choice because we are issuing the debt securities only in global form. For example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to the indirect holders but does not do so. Similarly, if we want to obtain the approval of the holders for any purpose-e.g., to amend the applicable indenture or to relieve us of the consequences of a default or of our obligation to comply with a particular provision of the applicable indenture-we would seek the approval only from the holders, and not the indirect holders, of the debt securities. Whether and how the holders contact the indirect holders is up to the holders. When we refer to you, we mean those who invest in the debt securities being offered by this prospectus, whether they are the holders or only indirect holders of those debt securities. When we refer to your debt securities, we mean the debt securities in which you hold a direct or indirect interest. SPECIAL CONSIDERATIONS FOR INDIRECT HOLDERS If you hold debt securities through a bank, broker or other financial institution, either in book-entry form or in street name, you should check with your own institution to find out: - how it handles securities payments and notices; - whether it imposes fees or charges; - how it would handle a request for the holders' consent, if ever required; - whether and how you can instruct it to send you debt securities registered in your own name so you can be a holder, if that is permitted in the future; - how it would exercise rights under the debt securities if there were a default or other event triggering the need for holders to act to protect their interests; and - if the debt securities are in book-entry form, how the depositary's rules and procedures will affect these matters. WHAT IS A GLOBAL SECURITY? We will issue each debt security in book-entry form only, unless we specify otherwise in the applicable prospectus supplement. A global security represents one or any other number of individual debt securities. Generally, all debt securities represented by the same global securities will have the same terms. We may, however, issue a global security that represents 9 11 multiple debt securities that have different terms and are issued at different times. We call this kind of global security a master global security. Each debt security issued in book-entry form will be represented by a global security that we deposit with and register in the name of a financial institution or its nominee that we select. The financial institution that we select for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, The Depositary Trust Company, New York, New York, known as DTC, will be the depositary for all debt securities issued in book-entry form. A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee, unless special termination situations arise. We describe those situations below under "Special Situations When a Global Security Will Be Terminated". As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all debt securities represented by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by a global security will not be a holder of the debt security, but only an indirect holder of a beneficial interest in the global security. If the prospectus supplement for a particular debt security indicates that the debt security will be issued in global form only, then the debt security will be represented by a global security at all times unless and until the global security is terminated. We describe the situations in which this can occur below under "Special Situations When a Global Security Will Be Terminated". The global security may be a master global security, although your prospectus supplement will not indicate whether it is a master global security. If termination occurs, we may issue the debt securities through another book-entry clearing system or decide that the debt securities may no longer be held through any book-entry clearing system. SPECIAL CONSIDERATIONS FOR GLOBAL SECURITIES As an indirect holder, an investor's rights relating to a global security will be governed by the account rules of the investor's financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize this type of investor as a holder of debt securities and instead deal only with the depositary that holds the global security. If debt securities are issued only in the form of a global security, an investor should be aware of the following: - An investor cannot cause the debt securities to be registered in his or her name, and cannot obtain non-global certificates for his or her interest in the debt securities, except in the special situations we describe below; - An investor will be an indirect holder and must look to his or her own bank or broker for payments on the debt securities and protection of his or her legal rights relating to the debt securities, as we describe under "Legal Ownership of Debt Securities" above; 10 12 - An investor may not be able to sell interests in the debt securities to some insurance companies and to other institutions that are required by law to own their securities in non-book-entry form; - An investor may not be able to pledge his or her interest in a global security in circumstances where certificates representing the debt securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective; - The depositary's policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor's interest in a global security. We and the trustee have no responsibility for any aspect of the depositary's actions or for its records of ownership interests in a global security. We and the trustee also do not supervise the depositary in any way; - The depositary may (and we understand that DTC will) require that those who purchase and sell interests in a global security within its book-entry system use immediately available funds and your broker or bank may require you to do so as well; and - Financial institutions that participate in the depositary's book-entry system, and through which an investor holds its interest in a global security, may also have their own policies affecting payments, notices and other matters relating to the debt securities. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the actions of any of those intermediaries. SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED In a few special situations described below, a global security will be terminated and interests in it will be exchanged for certificates in non-global form representing the debt securities it represented. After that exchange, the choice of whether to hold the debt securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they will be holders. We have described the rights of holders and street name investors above under "Legal Ownership of Debt Securities". The special situations for termination of a global security are as follows: - if the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global security and we do not appoint another institution to act as depositary within 60 days; - if we notify the trustee that we wish to terminate that global security; or - if an event of default has occurred with regard to debt securities represented by that global security and has not been cured or waived; we discuss defaults later under "Events of Default" on page 17. If a global security is terminated, only the depositary, and not we or the trustee, is responsible for deciding the names of the institutions in whose names the debt securities represented by the global security will be registered and, therefore, who will be the holders of those debt securities. 11 13 OVERVIEW OF REMAINDER OF THIS DESCRIPTION The remainder of this description summarizes: - ADDITIONAL MECHANICS relevant to the debt securities under normal circumstances, such as how you transfer ownership and where we make payments; - Your rights under several SPECIAL SITUATIONS, such as if we merge with another company or if we want to change a term of the debt securities; - Promises, or RESTRICTIVE COVENANTS, we make to you about how we will run our business or business actions we promise not to take; and - Your rights if we DEFAULT or experience other financial difficulties. ADDITIONAL MECHANICS FORM, EXCHANGE AND TRANSFER Unless otherwise indicated in the prospectus supplement, the debt securities will be issued: - only in fully registered form; - without interest coupons; and - in denominations of $1,000 and any integral multiple of $1,000. (Section 302) You may have your debt securities broken into more debt securities of permitted smaller denominations or combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed. (Section 305) This is called an "exchange." The entity performing the role of maintaining the list of registered direct holders is called the "security registrar." It will also perform exchanges and transfers. You may exchange or transfer debt securities at the office of the security registrar. (Section 305) You will not be required to pay a service charge to transfer or exchange debt securities, but you may be required to pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange will only be made if the security registrar is satisfied with your proof of ownership. (Section 305) When we designate a securities registrar, it will be named in the prospectus supplement according to the terms of the indenture. We have agreed to appoint an office or agency in New York City for you to transfer or exchange debt securities having New York as the place of payment. (Section 1102) PAYMENT AND PAYING AGENTS We will pay interest, principal and any other money due on the debt securities at payment offices that we designate. These offices are called paying agents. You must make arrangements to have your payments picked up at that office. We may also choose to pay interest by mailing checks to the address specified in the security register. (Section 1102) We will pay interest to you if you are a direct holder at the close of business on a particular day in advance of each due date for interest, even if you no longer own the debt 12 14 security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the "regular record date" and will be stated in the prospectus supplement. (Section 307) Holders buying and selling debt securities must work out between them how to compensate for the fact that we will pay all the interest for an interest period to the one who is the registered holder on the regular record date. The most common manner is to adjust the sales price of the debt securities to pro rate interest fairly between buyer and seller. This pro rated interest amount is called "accrued interest." Regardless of who acts as paying agent, all money paid by us to a paying agent that remains unclaimed at the end of three years after the amount is due to direct holders will be repaid to us. After that three-year period, you may look only to us for payment and not to the trustee, any other paying agent or anyone else. (Section 1103) "STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS. NOTICES Notices to be given to holders of a global debt security will be given only to the depositary, in accordance with its applicable policies as in effect from time to time. Notices to be given to holders of debt securities not in global form will be sent by mail to the respective addresses of the holders as they appear in the trustee's records, and will be deemed given when mailed. Neither the failure to give any notice to a particular holder, nor any defect in a notice given to particular holder will affect the sufficiency of any notice given to another holder. BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW THEY WILL RECEIVE NOTICES. SPECIAL SITUATIONS MERGERS AND SIMILAR EVENTS Mellon Financial Corporation and Mellon Funding Corporation are each generally permitted to consolidate or merge with another entity. Both are also permitted to sell or lease substantially all of its assets to another company, or to buy or lease substantially all of the assets of another entity. However, neither may take any of these actions unless the following conditions, among others, are met: - Where either entity merges out of existence or sells or leases substantially all its assets, the other party to the transaction must agree to be legally responsible for the obligations on the applicable debt securities. - The merger, sale of assets or other transaction must not cause an event of default under the senior indenture in the case of the senior debt securities or an event of default or a default under the subordinated indenture in the case of the subordinated debt securities, and none must have already occurred, unless the merger or other transaction would cure the event of default or default. An event of default under the senior 13 15 indenture is described on page 17. A default or event of default under the subordinated indenture is described on page 18. (Sections 901 and 903) MODIFICATION AND WAIVER There are three types of changes we can make to the indentures and the debt securities. Changes Requiring Your Approval. First, there are changes that cannot be made to your debt securities without your specific approval. Following is a list of those types of changes: - change the payment due date of the principal or interest on a debt security; - reduce any amounts due on a debt security; - reduce the principal amount, the amount payable upon acceleration of the maturity after default, the interest rate or the redemption price for a debt security; - change the place or currency of payment on a debt security; - impair your right to sue for payment; - if your debt securities are subordinated debt securities, modify the subordination provisions in a manner that is adverse to you; - reduce the percentage of direct holders of debt securities whose consent is needed to modify or amend the indenture; - reduce the percentage of direct holders of debt securities whose consent is needed to waive compliance with certain provisions of the indenture or to waive defaults; - modify any other aspect of the provisions dealing with modification and waiver of the indenture; and - modify the terms of the guarantees in a way that is adverse to you. (Section 1002) Changes Requiring a Vote. The second type of change to the indentures and the debt securities is the kind that requires a vote in favor by direct holders of debt securities of the particular series affected. A vote by direct holders owning 66 2/3% of the principal amount of the particular series would be required for us to obtain a waiver of all or part of the restrictive covenants described later on page 15 under "Restrictive Covenants". (Section 1108) A vote by direct holders of a majority of the principal amount of the particular series may waive a past default. However, we cannot obtain a waiver of a payment default or any other aspect of the indenture or the debt securities listed in the first category described previously on page 14 under "Changes Requiring Your Approval" unless we obtain your individual consent to the waiver. (Section 613) Changes Not Requiring Approval. The third type of change does not require any approval by direct holders of debt securities. This type is limited to clarifications and certain other changes that would not adversely affect holders of the debt securities. Nor do we need any approval to make any change that affects only debt securities to be issued under each indenture after the changes take effect. (Section 1001) We may also make changes or obtain waivers that do not adversely affect a particular debt security, even if they affect other debt securities. In those cases, we do not need to obtain the 14 16 approval of the holder of that debt security; we need only obtain any required approvals from the holders of the affected debt securities or other debt securities. (Section 1002) RESTRICTIVE COVENANTS THE SENIOR INDENTURE LIMITS HOW WE MAY DISPOSE OF VOTING STOCK OF MELLON FUNDING CORPORATION OR MELLON BANK, N.A. Under the senior indenture, Mellon Financial Corporation cannot assign, sell, grant a security interest in or otherwise dispose of any shares or rights to obtain shares with general voting power, other than directors' qualifying shares, of Mellon Bank, N.A. or Mellon Funding Corporation. Also, we may not permit Mellon Bank, N.A. or Mellon Funding Corporation to issue any shares or rights to obtain shares with general voting power of Mellon Bank, N.A. or Mellon Funding Corporation except, in the case of Mellon Bank, N.A., for transactions: - that are for fair market value on the date of action; and - where, after the transaction, Mellon Financial Corporation owns at least 80% of the shares of issued and outstanding voting stock of Mellon Bank, N.A. Subject to the merger provisions of the senior indenture, we cannot allow Mellon Bank, N.A. or Mellon Funding Corporation to merge or consolidate with another company or sell, grant a security interest in or lease substantially all of its assets unless, in the case of Mellon Bank, N.A.: - the transaction is for fair market value, unless to or with a company in which Mellon Financial Corporation owns at least 80% of the shares of issued and outstanding voting stock; and - after the transaction, Mellon Financial Corporation owns at least 80% of the shares of issued and outstanding voting stock of Mellon Bank, N.A. (Section 1107) THE SUBORDINATED INDENTURE LIMITS HOW WE MAY DISPOSE OF VOTING STOCK OF MELLON FUNDING CORPORATION Under the subordinated indenture, Mellon Financial Corporation cannot, subject to the merger provisions, sell, assign, grant a security interest in or otherwise dispose of any shares or rights to obtain shares with general voting power of Mellon Funding Corporation. Mellon Financial Corporation cannot permit Mellon Funding Corporation to: - issue shares or securities convertible into shares with general voting power, except to us; - merge or consolidate with a person other than us; - sell, assign, grant a security interest in or otherwise dispose of or lease substantially all of its assets. (Section 1107) Unless the prospectus supplement provides otherwise, the indentures contain no covenants specifically designed to protect you in the event of a highly leveraged transaction involving Mellon Financial Corporation, Mellon Funding Corporation or Mellon Bank, N.A. 15 17 DEFEASANCE The following discussion of "full defeasance" and "covenant defeasance" will be applicable to your series of debt securities only if we choose to have them apply to that series. If we do so choose, we will state that in the prospectus supplement. Full Defeasance. If there is a change in federal tax law, as described below, we can legally release ourselves from all payment and other obligations on the debt securities, called "full defeasance," if the following things happen: - We must irrevocably deposit in trust for the benefit of all holders of the debt securities a combination of money, U.S. government or U.S. government agency notes or bonds or other arrangements specified in the applicable prospectus supplement that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates. - There must be a change in current federal tax law or an IRS ruling that lets us make the above deposit without causing you to be taxed on your debt security any differently than if we did not make the deposit and just repaid the debt security ourselves. Under current federal tax law, the deposit and our legal release from the debt security would be treated as though we took back your debt security and gave you your share of the cash and debt security or bonds deposited in trust. In that event, you could recognize gain or loss on your debt security. - We must deliver to the trustee a legal opinion of our counsel confirming the tax law change described above and confirming that any Securities of this series which are then listed on the New York Stock Exchange will not be delisted as a result of such deposit. If we ever fully defease your debt security, you will have to rely solely on the trust deposit for payments on your debt security. You could not look to us for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or insolvent. In the case of subordinated debt securities, you would also be released from the subordination provisions on the subordinated debt securities described later under "Subordination of the Subordinated Debt Securities" on page 19. Covenant Defeasance. Under current federal tax law, we can make the same type of deposit described above and be released from some of the restrictive covenants relating to your debt security. This is called "covenant defeasance." In that event, you would lose the protection of those restrictive covenants but would gain the protection of having money and securities set aside in trust to repay your debt security. In the case of subordinated debt securities, you would be released from the subordination provisions on your subordinated debt security described later on page 19. In order to achieve covenant defeasance, we must do the following: - Deposit in trust for the benefit of the holders of the debt securities a combination of money and U.S. government or U.S. government agency notes or bonds or other arrangements specified in the applicable prospectus supplement that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates. 16 18 - Deliver to the trustee a legal opinion of our counsel confirming that under current federal income tax law we may make the above deposit without causing you to be taxed on your debt security any differently than if we did not make the deposit and just repaid the debt security ourselves. DEFAULT AND RELATED MATTERS RANKING The debt securities are not secured by any of our property or assets. Accordingly, your ownership of debt securities means you are one of our unsecured creditors. The senior debt securities are not subordinated to any of our other debt obligations, and therefore they rank equally with all other unsecured and unsubordinated indebtedness of Mellon Funding Corporation. The guarantees of the senior debt securities rank equally with all other unsecured and unsubordinated indebtedness of Mellon Financial Corporation. The subordinated debt securities are subordinated to some of our existing and future debt and other liabilities. See "Subordination of Subordinated Debt Securities" on page 19 for additional information on how subordination limits your ability to receive payment or pursue other rights if we default or have certain other financial difficulties. EVENTS OF DEFAULT You will have special rights if an "event of default" occurs and is not cured, as described later in this subsection. The events of default for the senior debt securities are different than those for the subordinated debt securities. The Senior Indenture. Under the senior indenture, the term "event of default" for senior securities means any of the following: - We do not pay the principal or any premium on a senior debt security of that series on its due date; - We do not pay interest on a senior debt security of that series within 30 days of its due date; - We do not deposit any sinking fund payment for a senior debt security of that series on its due date; - We remain in breach of the restrictive covenant described previously under "The Senior Indenture Limits How We May Dispose of Voting Stock of Mellon Funding Corporation or Mellon Bank, N.A." or any other covenant made in the senior indenture for 60 days after we receive a notice stating we are in breach. The notice must be sent by either the trustee or direct holders of at least 25% of the principal amount of outstanding debt securities of the affected series; - Mellon Financial Corporation, Mellon Funding Corporation or Mellon Bank, N.A. files for bankruptcy or other events in bankruptcy, insolvency or reorganization occur; and 17 19 - Any other event of default described in the prospectus supplement occurs. (Section 601) The Subordinated Indenture. Under the subordinated indenture, the term "event of default" is defined as being only those events involving the bankruptcy, insolvency or reorganization of Mellon Financial Corporation or Mellon Bank, N.A. (Section 601) The subordinated indenture does not define an "event of default" as including, or provide for rights of acceleration of the subordinated securities when: - an event of bankruptcy, insolvency or reorganization is of Mellon Funding Corporation alone; or - a default in payment of principal or interest or failure to perform covenants or agreements in the subordinated debt securities or subordinated indenture occurs. Under the subordinated indenture, the term "default" means any of the following: - We do not pay the principal or any premium on a subordinated debt security on its due date; - We do not pay interest on a subordinated debt security within 30 days of its due date; - We remain in breach of any covenant or warranty in the subordinated indenture for 60 days after we receive a notice stating we are in breach. The notice must be sent by either the trustee or direct holders of at least 25% of the principal amount of outstanding debt securities of the affected series; Remedies If an Event of Default Occurs. If an event of default has occurred with respect to debt securities of any series and has not been cured, the trustee or the direct holders of 25% in principal amount of the outstanding debt securities of the affected series may declare the entire principal amount of all the debt securities of that series to be due and immediately payable. The notice must be in writing to Mellon Funding Corporation and Mellon Financial Corporation. This is called a "declaration of acceleration of maturity." A declaration of acceleration of maturity may be canceled by the direct holders of at least a majority in principal amount of the debt securities of the affected series if Mellon Funding Corporation or Mellon Financial Corporation have deposited monies on account of certain overdue amounts with the trustee. (Section 602) Except in cases of default, where a trustee has to act with a required standard of care, a trustee is not required to take any action under the indenture at the request of any direct holders unless the direct holders offer the trustee reasonable protection from expenses and liability, called an "indemnity". (Section 703) If reasonable indemnity is provided, the direct holders of a majority in principal amount of the outstanding debt securities of the relevant series may direct the time, method and place of conducting any proceeding for any remedy available to the trustee. These majority direct holders may also direct the trustee in performing any other action under the indenture. (Section 612) In general, before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the debt securities, the following must occur: 18 20 - You must give the trustee written notice that an event of default, or in the case of subordinated securities, a default, has occurred and remains uncured; - The direct holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; - The trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity; and - The trustee must not have received from direct holders of a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with the written notice during the 60-day period after receipt of the above notice. (Section 607) However, you are entitled at any time to bring a lawsuit for the payment of money due on your debt security on or after its due date. (Section 608) "STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO OR MAKE A REQUEST OF THE TRUSTEE AND TO MAKE OR CANCEL A DECLARATION OF ACCELERATION. Mellon Funding Corporation and Mellon Financial Corporation will furnish to the trustee every year a written statement of certain of our officers certifying that to their knowledge we are in compliance with the indenture and the debt securities, or else specifying any default. (Sections 1105 and 1106) SUBORDINATION OF THE SUBORDINATED DEBT SECURITIES The subordinated debt securities are subordinated securities and, as a result, the payment of principal of, and any premium and interest on, the debt securities is subordinated in right of payment to the prior payment in full of all of the senior debt of Mellon Funding Corporation. The guarantees of the subordinated debt securities are subordinated in right of payment to the prior payment in full of all of Mellon Financial Corporation's senior debt. This means that, in certain circumstances where we may not be making payments on all of our debt obligations as they come due, the holders of all of our senior debt will be entitled to receive payment in full of all amounts that are due or will become due on their debt securities before the holders of subordinated debt securities and the guarantees will be entitled to receive any amounts on the subordinated debt and the guarantees. These circumstances include when we make a payment or distribute assets to creditors upon any liquidation, dissolution, winding up or reorganization of Mellon Financial Corporation or Mellon Funding Corporation. In addition, we are not permitted to make payments of principal of, or any premium or interest on, the subordinated debt securities if we default in our obligation to make payments on senior debt and do not cure such default. (Sections 1401 and 1402) These subordination provisions mean that if we are insolvent a direct holder of our senior debt may ultimately receive out of our assets more than a direct holder of the same amount of our subordinated debt securities and a creditor of ours that is owed a specific amount may 19 21 ultimately receive more than a direct holder of the same amount of subordinated debt securities. "Senior debt" means the principal of, and any premium and interest on, all of our indebtedness, including indebtedness of others that we guarantee, whether such indebtedness exists now or is created, incurred or assumed by us after the date of this prospectus, that is for money we borrow or is evidenced by a note or similar instrument that we have given when we acquire any business, property or assets or that we owe as a lessee under leases that generally accepted accounting principles require us to capitalize on our balance sheet or leases made as part of any sale and leaseback transaction we engage in. Senior debt includes any senior debt securities. Senior debt also includes any amendment, renewal, replacement, extension, modification and refunding of any indebtedness that itself was senior debt. Senior debt does not include any indebtedness that expressly states in the instrument creating or evidencing it that it does not rank senior in right of payment to the debt securities. Senior debt does not include the subordinated debt securities. At December 31, 1999, we owed a total of $1,198 million in principal amount of senior debt, without counting any accrued interest on that senior debt. The indenture does not limit the amount of senior debt we are permitted to have, and we may in the future incur additional senior debt. REGARDING THE TRUSTEES The trustee under either indenture will be named in the prospectus supplement. Any trustee of debt securities may resign or be removed, and a new trustee may be appointed to replace the previous trustee. In the ordinary course of business, we and our subsidiaries may conduct transactions with trustees, and trustees and their affiliates may conduct transactions with us and our subsidiaries. TAX CONSIDERATIONS Mellon Funding Corporation will be required to withhold the Pennsylvania Corporate Loans Tax from interest payments on debt securities held by or for those subject to such tax, principally individuals and partnerships resident in Pennsylvania and resident trustees of Pennsylvania trusts. The tax, at the current rate of four mills on each dollar of nominal value ($4.00 per $1,000), will be withheld, at any time when it is applicable, from any interest payment to taxable holders at the annual rate of $4.00 per $1,000 principal amount of the debt securities. The debt securities will be exempt under current law, from personal property taxes imposed by political subdivisions in Pennsylvania. PLAN OF DISTRIBUTION We may sell debt securities to or through underwriters, and also may sell debt securities directly to other purchasers or through agents. Unless otherwise set forth in the prospectus supplement, the obligation of any underwriters to purchase the debt securities will be subject 20 22 to conditions precedent and these underwriters will be obligated to purchase all the debt securities if any are purchased. The distribution of the debt securities may be effected from time to time in one or more transactions at a fixed price or prices which may be changed, at market prices prevailing at the time of sale, at prices related to these prevailing market prices or at negotiated prices. The applicable prospectus supplement will describe the method of distribution of the debt securities. In connection with the sale of debt securities, underwriters may receive compensation from us or from purchasers of debt securities for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters, dealers and agents that participate in the distribution of debt securities may be deemed to be underwriters, and any discounts or commissions received by them and any profit on the resale of debt securities by them may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933. Any underwriter, dealer or agent that will participate in the distribution of the debt securities will be identified, and any compensation it will receive will be described, in the prospectus supplement. Under agreements which may be entered into by us, underwriters, dealers and agents who participate in the distribution of debt securities may be entitled to indemnification by us against some liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the underwriters, dealers or agents may be required to make relating to these liabilities. Any agreement in which we agree to indemnify underwriters, dealers and agents against civil liabilities will be described in the relevant prospectus supplement. If so indicated in the prospectus supplement, we will authorize dealers or other persons acting as our agent to solicit offers by some institutions to purchase debt securities from us pursuant to contracts providing for payment and delivery on a future date. Institutions with which these contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others. Mellon Financial Markets, LLC, a wholly owned subsidiary of Mellon Financial Corporation and an affiliate of Mellon Funding Corporation, may participate as an agent or an underwriter in offerings of securities. Mellon Financial Markets is a member of the National Association of Securities Dealers, Inc. Because of the relationship among Mellon Financial Markets, Mellon Funding Corporation and Mellon Financial Corporation, offerings of debt securities in which Mellon Financial Markets participates will be conducted in accordance with NASD Rule 2720. Mellon Financial Markets, an affiliate of Mellon Financial Corporation and Mellon Funding Corporation, may engage in offers and sales relating to market-making transactions in the debt securities effected from time to time after the commencement of the offering to which this prospectus relates. Mellon Financial Markets may act as agent in such transactions including as an agent for the counterparty when acting as a principal or as agent for both counterparties. Mellon Financial Markets may receive compensation in the form of discounts 21 23 and commissions, including from both counterparties when it acts as agent for both. Sales will be made at prices related to the prevailing market prices at the time of sale or at negotiated prices. Certain of the underwriters, dealers or agents may be customers of, including borrowers from, engage in transactions with, and perform services for, us or one or more of our affiliates in the ordinary course of business. VALIDITY OF THE DEBT SECURITIES AND GUARANTEES Unless a prospectus supplement tells you otherwise, the validity of any debt securities and the related guarantees will be passed upon for us by Carl Krasik, Associate General Counsel and Secretary of Mellon Financial Corporation, One Mellon Center, Pittsburgh, Pennsylvania 15258. Information in Tax Considerations has been passed upon for us by Michael K. Hughey, Senior Vice President and Controller of Mellon Financial Corporation and Senior Vice President, Director of Taxes and Controller of Mellon Bank, N.A. Mr. Krasik and Mr. Hughey are also shareholders of Mellon Financial Corporation and hold options to purchase additional shares of Mellon Financial Corporation's common stock. Unless a prospectus supplement tells you otherwise, Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, will, for the underwriters, pass upon the validity of the debt securities and related guarantees distributed in an underwritten offering. Sullivan & Cromwell will rely on the opinion of Mr. Krasik for all matters of Pennsylvania law. Sullivan & Cromwell from time to time performs legal services for us. WHERE YOU CAN FIND MORE INFORMATION As required by the Securities Act of 1933, we filed a registration statement (Nos. 333- and 333- -01) relating to the securities offered by this prospectus with the Securities and Exchange Commission. This prospectus is a part of that registration statement, which includes additional information. We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference room, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the SEC's public reference rooms in its offices in New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Because our common stock is listed on the NYSE, you may inspect reports, proxy statements and other information about us at the offices of the NYSE, 20 Broad Street, New York, New York 10005. The SEC allows us to "incorporate by reference" information we file with them, which means that we can disclose important information to you by referring you to other documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede information included in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement. We 22 24 incorporate by reference the documents listed below and additional documents that we may file with the SEC after the date of this prospectus and before completion of this offering. The documents include periodic reports like annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K as well as proxy statements. - Annual report on Form 10-K for the fiscal year ended December 31, 1999. - Current report on Form 8-K dated January 19, 2000. You may request a copy of these filings at no cost, by writing or telephoning us at the following address: Mellon Financial Corporation One Mellon Center Pittsburgh, Pennsylvania 15258 Attention: Investor Relations Department Telephone (412) 234-5601 You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these debt securities in states where the offer is not permitted. You should not assume that the information appearing in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents. EXPERTS Our consolidated financial statements as of December 31, 1999 and 1998 and for each of the years in the three-year period ended December 31, 1999, included in our 1999 annual report on Form 10-K and incorporated by reference in this prospectus have been so incorporated in reliance on the report of KPMG LLP, independent public accountants, included in our 1999 annual report on Form 10-K, and incorporated by reference in this prospectus, and upon the authority of that firm as experts in accounting and auditing. 23 25 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Estimated expenses in connection with the issuance and distribution of the debt securities are as follows: Securities and Exchange Commission registration fee......... $ 396,000 Rating Agency fees.......................................... $ 500,000 Accounting fees and expenses................................ $ 120,000 Printing.................................................... $ 100,000 Legal fees and expenses..................................... $ 100,000 Trustee expenses............................................ $ 20,000 Other....................................................... $ 4,000 ---------- Total Expenses............................................ $1,240,000 ==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Restated Articles of Incorporation, as amended, of Mellon Financial Corporation and the Articles of Incorporation, as amended, of Mellon Funding Corporation each provide that, except as prohibited by law, every director and officer of Mellon Financial Corporation or Mellon Funding Corporation, as applicable, shall be entitled as of right to be indemnified by the corporation against expenses and any liability paid or incurred by such person in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the corporation or otherwise, in which such person may be involved (subject to certain limitations in the case of actions by such person against the corporation) by reason of such person being or having been a director or officer of the corporation or serving or having served at the request of the corporation as a director, officer, employee, fiduciary or other representative of another entity. The Articles also give to indemnitees the right to have their expenses in defending such actions paid in advance by us, subject to any obligation imposed by law or otherwise to reimburse the corporation in certain events. Mellon Financial Corporation has entered into an indemnity agreement with each director and certain of its officers which provides a contractual right to indemnification against such expenses and liabilities (subject to certain limitations and exceptions) and a contractual right to advancement of expenses and contains additional provisions regarding determination of entitlement, defense of claims, rights of contribution and other matters. The Pennsylvania Business Corporation Law permits a corporation to indemnify its directors and officers, and to pay their expenses in advance, subject to certain limitations and exceptions. The specific indemnity provisions, which are by their terms not intended to be exclusive, are, in general, not as broad as the provisions of the articles and the indemnity agreement. However, one provision would preclude indemnification in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness, and another provision requires that advances of expenses may be made by a corporation only upon receipt of an undertaking to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation. Mellon Financial Corporation and Mellon Funding Corporation maintain liability insurance policies covering their directors and officers to insure against claims arising out of certain alleged wrongful acts on the part of such directors and officers and against claims arising out of certain alleged breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974 on the part of such directors and officers. Article Seventh of Mellon Financial Corporation's Articles and Article Two of Mellon Financial Corporation's by-laws, as amended, both adopted by the shareholders of the corporation at their annual meeting on April 20, 1987, and Article Eight of Mellon Funding Corporation's Articles and Section 11 of Mellon Funding Corporation's by-laws as amended, further provide that, to the fullest extent that the laws of Pennsylvania, as in effect on January 27, 1987 or as thereafter amended, permit elimination or limitation of the liability of directors, no director of the corporation shall be personally liable for monetary damages as such for any action taken, or any II-1 26 failure to take any action, as a director. The Pennsylvania Business Corporation Law provides that whenever the by-laws of a corporation by a vote of the shareholders so provide, a director shall not be personally liable for monetary damages as such for any action taken, or failure to take any action, unless (i) the director has breached or failed to perform the duties of his office under the standard of care and justifiable reliance specified in the Act and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. These provisions do not apply to (i) responsibility or liability of a director pursuant to any criminal statute or (ii) the liability of a director for payment of taxes. ITEM 16. EXHIBITS.
EXHIBIT NO. EXHIBIT - ------- ------- 1.1 -- Form of Underwriting Agreement. 4.1 -- Trust Indenture dated as of May 21, 1988 among Mellon Funding Corporation, Mellon Financial Corporation, and The Chase Manhattan Bank, as Trustee. 4.2 -- First Supplemental Indenture dated as of November 29, 1990 among Mellon Funding Corporation, Mellon Financial Corporation and The Chase Manhattan Bank, as Trustee. 4.3 -- Form of Second Supplemental Indenture. 4.4 -- Form of Subordinated Trust Indenture. 5.1 -- Opinion of Carl Krasik, Esq., as to the validity of the Debt Securities and Guarantees being registered. 8.1 -- Opinion of Michael K. Hughey, Esq., regarding tax matters. 12.1 -- Computation of Ratio of Earnings to Fixed Charges (Parent Corporation). 12.2 -- Computation of Ratio of Earnings to Fixed Charges (Mellon Financial Corporation and Subsidiaries). 23.1 -- Consent of Carl Krasik, Esq. (included in Exhibit 5.1). 23.2 -- Consent of Michael K. Hughey, Esq. (included in Exhibit 8.1). 23.3 -- Consent of KPMG LLP. 24.1 -- Powers of Attorney. 25.1 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Chase Manhattan Bank. 25.2 -- Form of T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Bank One Trust Company, N.A.
ITEM 17. UNDERTAKINGS. (a) The undersigned registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; II-2 27 provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by Mellon Financial Corporation pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of Mellon Financial Corporation's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of a registrant pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-3 28 SIGNATURES MELLON FINANCIAL CORPORATION Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Pittsburgh, Commonwealth of Pennsylvania, on March 24, 2000. MELLON FINANCIAL CORPORATION By: /s/ MARTIN G. MCGUINN ----------------------------------------- Martin G. McGuinn Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated all as of March 24, 2000.
Signature Capacities --------- ---------- By: /s/ MARTIN G. MCGUINN Director and Principal Executive Officer ------------------------------------------- Martin G. McGuinn By: /s/ STEVEN G. ELLIOTT Principal Financial Officer ------------------------------------------- Steven G. Elliott By: /s/ MICHAEL K. HUGHEY Principal Accounting Officer ------------------------------------------- Michael K. Hughey Dwight L. Allison, Jr.; Burton C. Borgelt; Directors Carol R. Brown; Frank V. Cahouet; Jared L. Cohon; Christopher M. Condron; J.W. Connolly; Charles A. Corry; Ira J. Gumberg; Pemberton Hutchinson; George W. Johnstone; Rotan E. Lee; Edward J. McAniff; Robert Mehrabian; Seward Prosser Mellon; Mark A. Nordenberg; David S. Shapira; Joab L. Thomas; and Wesley W. von Schack By: /s/ CARL KRASIK ------------------------------------------- Carl Krasik Attorney-In-Fact
II-4 29 SIGNATURES MELLON FUNDING CORPORATION Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on March 24, 2000. MELLON FUNDING CORPORATION By: /s/ STEVEN G. ELLIOTT ----------------------------------------- Steven G. Elliott President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated all as of March 24, 2000.
Signature Capacities --------- ---------- By: /s/ STEVEN G. ELLIOTT Director and Principal Executive Officer ------------------------------------------- Steven G. Elliott By: /s/ MICHAEL K. HUGHEY Principal Financial Officer and ------------------------------------------- Principal Accounting Officer Michael K. Hughey Michael K. Hughey; Michael A. Bryson Directors By: /s/ CARL KRASIK ------------------------------------------- Carl Krasik Attorney-In-Fact
II-5 30
EXHIBIT METHOD OF NO. DESCRIPTION FILING - ------- ---------------------------------------------------------- --------------------------- 1.1 Form of Underwriting Agreement. Filed herewith. 4.1 Trust Indenture dated as of May 21, 1988 among Mellon Previously filed as Exhibit Funding Corporation, Mellon Financial Corporation and The 4.1 to Registration Chase Manhattan Bank, as Trustee. Statement on Form S-3 (Registration Statement No. 33-55226) and incorporated herein by reference. 4.2 First Supplemental Indenture dated as of November 29, 1990 Previously filed as Exhibit among Mellon Funding Corporation, Mellon Financial 4.2 to Registration Corporation and The Chase Manhattan Bank, as Trustee. Statement on Form S-3 (Registration Statement No. 33-55226) and incorporated herein by reference. 4.3 Form of Second Supplemental Indenture. Filed herewith. 4.4 Form of Subordinated Trust Indenture. Filed herewith. 5.1 Opinion of Carl Krasik, Esq., as to the validity of the Filed herewith. Debt Securities and Guarantees being registered. 8.1 Opinion of Michael K. Hughey, Esq., regarding state tax Filed herewith. matters. 12.1 Computation of Ratio of Earnings to Fixed Charges (Parent Filed herewith. Corporation). 12.2 Computation of Ratio of Earnings to Fixed Charges (Mellon Filed herewith. Financial Corporation and subsidiaries). 23.1 Consent of Carl Krasik, Esq. (included in Exhibit 5.1). Filed herewith. 23.2 Consent of Michael K. Hughey, Esq. (included in Exhibit Filed herewith. 8.1). 23.3 Consent of KPMG LLP. Filed herewith. 24.1 Powers of Attorney. Filed herewith. 25.1 Form T-1 Statement of Eligibility and Qualification under Previously filed as Exhibit the Trust Indenture Act of 1939 of The Chase Manhattan 26.1 to Registration Bank. Statement on Form S-3 (Registration Statement No. 33-55226) and incorporated herein by reference. 25.2 Form of T-1 Statement of Eligibility and Qualification Filed herewith. under the Trust Indenture Act of 1939 of Bank One Trust Company, N.A.
II-6 EX-1.1 2 FORM OF UNDERWRITING AGREEMENT 1 Exhibit 1.1 UNDERWRITING AGREEMENT [DATE], 20__ Mellon Funding Corporation Mellon Financial Corporation, One Mellon Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258. Ladies and Gentlemen: [NAME(S) OF UNDERWRITERS], as Underwriters (the "Underwriters"), understand that Mellon Funding Corporation, a Pennsylvania corporation (the "Company"), proposes to issue and sell $[AMOUNT] aggregate principal amount of [TITLE OF SECURITIES] (the "Offered Securities"), which are to be unconditionally guaranteed [on a subordinate basis] (as described in the Prospectus Supplement and Prospectus referred to below) as to payments of principal, premium, if any, and interest, if any, by Mellon Financial Corporation, a Pennsylvania corporation registered as a financial holding company and a bank holding company under the Bank Holding Company Act (the "Guarantor"). Subject to the terms and conditions set forth herein or incorporated by reference herein, the Company hereby agrees to sell, the Guarantor agrees to guarantee [on a subordinate basis], and the Underwriters agree to purchase, severally and not jointly, the principal amounts of such Offered Securities set forth opposite their names on Schedule A hereto at [PERCENTAGE]% of their principal amount, yielding total proceeds at closing of $[AMOUNT]. The Underwriters will pay for such Offered Securities in immediately available funds upon delivery thereof at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, at 10:00 a.m. (local time) on [DATE], 20__, or at such other time, not later than [DATE], 20__, as will be designated by the Underwriters. The Offered Securities will have the terms set forth in the Company's and the Guarantor's Prospectus Supplement, dated [DATE], 20__, and the Prospectus, dated [DATE], 20__, particularly as follows: Maturity: [DATE] 2 Interest Rate: [RATE] Redemption Provisions: Interest Payment Dates: [DATES], commencing [DATE], 20__ All the provisions contained in the documents entitled Mellon Funding Corporation Underwriting Agreement Standard Provisions (Debt), dated March __, 2000, a copy of which you have previously received, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. -2- 3 Please confirm your agreement by having an authorized officer sign a copy of this Agreement in the appropriate space set forth below. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Very truly yours, [UNDERWRITERS] By: [LEAD UNDERWRITER] By: ---------------------------- Name: Title: Accepted: [DATE], 20__ MELLON FUNDING CORPORATION By: ---------------------------- Name: Title: MELLON FINANCIAL CORPORATION By: ---------------------------- Name: Title: -3- 4 SCHEDULE A
Principal Amount Underwriter of Securities ----------- ------------- $ ------------- TOTAL $ =============
-4- 5 MELLON FUNDING CORPORATION UNDERWRITING AGREEMENT STANDARD PROVISIONS (DEBT) March 24, 2000 From time to time Mellon Funding Corporation, a Pennsylvania corporation (the "Company"), and Mellon Financial Corporation, a Pennsylvania corporation registered as a financial holding company and a bank holding company under the Bank Holding Company Act (the "Guarantor"), may enter into one or more underwriting agreements that provide for the sale of designated securities to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement (an "Underwriting Agreement"). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as "this Agreement". Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. ARTICLE I. SECTION 1.1 The Company proposes to issue from time to time debt securities consisting of debentures, notes and/or other unsecured evidences of indebtedness (the "Securities") to be issued pursuant to the provisions of the Indenture, dated as of May 2, 1988, as supplemented by the First Supplemental Indenture, dated as of November 29, 1990, and the Second Supplemental Indenture, dated as of [DATE], 2000, among the Company, the Guarantor and The Chase Manhattan Bank, as trustee, and/or the Indenture, dated as of [DATE], 2000 among the Company, the Guarantor and Bank One Trust Company, National Association, as trustee, as the same may be from time to time amended or supplemented (the applicable indenture being referred to herein as the "Indenture" and the trustee thereunder being referred to herein as the "Trustee"). The Securities will have varying designations, maturities, rates and times of payment of interest, selling prices and redemption terms, and may be either senior or subordinate obligations of the Company as specified in the Underwriting Agreement. The Securities will be guaranteed as to payment of principal, premium, if any, and interest, if any, by the Guarantor on a senior or subordinated basis as specified in the Underwriting Agreement. SECTION 1.2 The Company and the Guarantor have filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus relating to the Securities and to the unconditional guarantee by the Guarantor of payment of principal, premium, if any, and interest, if any (the "Guarantees"), and will prepare and file a prospectus supplement specifically relating -5- 6 to the Offered Securities and related Guarantees (the "Offered Guarantees") in accordance with Section 6.1(a) hereof. The term "Registration Statement" means the registration statement as amended to the date of the Underwriting Agreement. If the Company and the Guarantor have filed an abbreviated registration statement to register additional Securities and Guarantees pursuant to Rule 462(b) under the Securities Act of 1933 (the "Securities Act"), then any reference herein to the term "Registration Statement" shall be deemed to include such a registration statement filed pursuant to Rule 462(b). The term "Basic Prospectus" means the prospectus included in the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement specifically relating to the Offered Securities and Offered Guarantees as filed with the Commission pursuant to Rule 424. The term "preliminary prospectus" means a preliminary prospectus supplement specifically relating to the Offered Securities and Offered Guarantees together with the Basic Prospectus. As used herein, the terms "Registration Statement", "Basic Prospectus", "Prospectus" and "preliminary prospectus" shall include in each case the material, if any, incorporated by reference therein. SECTION 1.3 The term "Underwriters' Securities" means the Offered Securities to be purchased by the Underwriters herein. The term "Contract Securities" means the Offered Securities, if any, to be purchased pursuant to the delayed delivery contracts referred to below. ARTICLE II. SECTION 2.1 If the Prospectus provides for sales of Offered Securities pursuant to delayed delivery contracts, the Company hereby authorizes the Underwriters to solicit offers to purchase Contract Securities on the terms and subject to the conditions set forth in the Prospectus pursuant to delayed delivery contracts substantially in the form of Schedule I attached hereto ("Delayed Delivery Contracts") but with such changes therein as the Company may authorize or approve. Delayed Delivery Contracts are to be with institutional investors approved by the Company and of the types set forth in the Prospectus. On the Closing Date (as hereinafter defined), the Company will pay the manager of the Underwriters (the "Manager") as compensation, for the accounts of the Underwriters, the fee set forth in the Underwriting Agreement in respect of the principal amount of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. SECTION 2.2 If the Company executes and delivers Delayed Delivery Contracts with institutional investors, the Contract Securities shall be deducted from the Offered Securities to be purchased by the several Underwriters, and the aggregate principal amount of Offered Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Offered Securities set forth opposite each Underwriter's name in the Underwriting Agreement, except to the extent that the Manager determines that such reduction shall be otherwise and so advises the Company. -6- 7 ARTICLE III. SECTION 3.1 The Company is advised by the Manager that the Underwriters propose to make a public offering of their respective portions of the Underwriters' Securities as soon after this Agreement is entered into as in the Manager's judgment is advisable. The Underwriters will offer the Underwriters' Securities for sale upon the terms and conditions set forth in the Prospectus. ARTICLE IV. SECTION 4.1 Delivery of and payment for the Underwriters' Securities shall be made at the office, on the date and at the time specified in the Underwriting Agreement (such date and time of delivery of and payment for the Underwriters' Securities being herein called the "Closing Date"). Unless otherwise set forth in the Prospectus and/or the Underwriting Agreement, the Underwriters' Securities will be represented by one or more global Securities which will be deposited by or on behalf of the Company with The Depository Trust Company ("DTC") or its designated custodian. Delivery of the Underwriters' Securities shall be made by causing DTC to credit the Underwriters' Securities to the account of the Manager at DTC, for the respective accounts of the several Underwriters at DTC, against payment by the several Underwriters through the Manager of the purchase price thereof to or upon the order of the Company in the manner and type of funds specified in the Underwriting Agreement. The Offered Securities will be made available for checking at the closing location specified in the Underwriting Agreement at least twenty-four hours prior to the time for delivery. ARTICLE V. SECTION 5.1 The several obligations of the Underwriters hereunder are subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement or any part thereof shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission, and the Manager shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the foregoing effect. The officer making such certificate may rely upon the best of his knowledge as to proceedings pending or threatened; (b) The Manager shall have received on the Closing Date an opinion of the General Counsel, Associate General Counsel or Assistant General Counsel -7- 8 of the Guarantor and counsel to the Company, dated the Closing Date, to the effect set forth in Exhibit A; (c) The Manager shall have received on the Closing Date an opinion of Sullivan & Cromwell, as counsel to the Underwriters, dated the Closing Date, with respect to the incorporation of the Company and the Guarantor, the validity of the Indenture, the Offered Securities and the Offered Guarantees, the Registration Statement, the Prospectus and other related matters as the Manager may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (d) The Manager shall have received, on each of the date of the Underwriting Agreement and the Closing Date, a letter dated the date of the Underwriting Agreement or the Closing Date, as the case may be, in form and substance satisfactory to the Manager, from KPMG LLP or any other independent public accountants to the Guarantor, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; provided that the letter delivered on the Closing Date shall use a "cut-off date" not earlier than the date of the Underwriting Agreement; (e) (i) Neither the Company, the Guarantor nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and (ii) since the respective dates as of which information is given in the Prospectus, there shall not have been any change in the capital stock or long-term debt of the Company, the Guarantor or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company or the Guarantor and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the reasonable judgment of the Manager so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Securities on the terms and in the manner contemplated in the Prospectus; (f) On or after the date of the Underwriting Agreement (i) no downgrading shall have occurred in the rating accorded the debt securities of or guaranteed by the Guarantor or the preferred stock of the Guarantor by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no such organization shall have publicly announced that it has under -8- 9 surveillance or review, with possible negative implications, its rating of any debt securities of or guaranteed by the Guarantor or preferred stock of the Guarantor; (g) On or after the date of the Underwriting Agreement there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) trading of any securities of the Company or the Guarantor shall have been suspended on any exchange or in the over-the-counter market; (iii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or any changes in financial markets or any calamity or crisis, if the effect of any such events specified in this clause (iv) in the judgment of the Manager makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities being delivered on the Closing Date on the terms and in the manner contemplated by the Prospectus; (h) Each of the Company and the Guarantor shall have complied with the provisions of Section 6.1(b) hereof with respect to the furnishing of prospectuses on the business day next succeeding the date of the Underwriting Agreement; and (i) Each of the Company and the Guarantor shall have furnished or caused to be furnished to the Manager at the Closing Date certificates of officers of the Company and Guarantor, as the case may be, satisfactory to the Manager as to the accuracy of the representations and warranties of each of the Company and the Guarantor herein as of the Closing Date, as to the performance by each of the Company and the Guarantor of all of its obligations hereunder to be performed as of or prior to the Closing Date and as to such other matters as the Manager may reasonably request. ARTICLE VI. SECTION 6.1 In further consideration of the agreements of the Underwriters contained in this Agreement, the Company and the Guarantor hereby covenant: (a) to prepare the Prospectus in a form approved by the Manager and to file, or transmit for filing, such Prospectus with the Commission pursuant to Rule 424 under the Securities Act within the applicable time period prescribed for such filing by the rules and regulations under the Securities Act, and prior to the termination of the offering of the Offered Securities to which such Prospectus relates also will promptly advise the Manager (i) when any amendment to the Registration Statement has become effective or any further -9- 10 supplement to the Prospectus has been so filed or transmitted for filing, (ii) of any request by the Commission for any amendment of the Registration Statement or the Prospectus or for any additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose, and (iv) of the receipt by the Company or Guarantor of any notification with respect to the suspension of the qualification of the Offered Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. Each of the Company and the Guarantor will use its reasonable best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as practicable the withdrawal thereof. The Company and the Guarantor will not file or transmit for filing any amendment to the Registration Statement or supplement to the Prospectus unless they have furnished to the Manager a copy for their review prior to filing or transmission for filing; (b) to furnish the Manager without charge a signed copy of the Registration Statement, including exhibits and materials, if any, incorporated by reference therein, prior to 10:00 a.m. New York City time on the business day next succeeding the date of the Underwriting Agreement and during the period mentioned in paragraph (c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as the Manager may reasonably request. (The terms "supplement" and "amendment" or "amend" as used in this Agreement shall include all documents filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") subsequent to the date of the Basic Prospectus that are deemed to be incorporated by reference in the Prospectus); (c) if, during such period after the date of the first public offering of the Offered Securities as in the opinion of counsel for the Underwriters the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish at its own expense to the Underwriters and to the dealers (whose names and addresses the Manager will furnish to the Company or Guarantor) to which Offered Securities and Offered Guarantees may have been sold by the Manager on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law; -10- 11 (d) to endeavor to qualify the Offered Securities and the Offered Guarantees for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Manager shall reasonably request, provided that, in connection therewith, neither the Company nor the Guarantor shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction, and to pay all expenses (including fees and disbursements of counsel) in connection with the determination of the eligibility of the Offered Securities and the Offered Guarantees for investment under the laws of such jurisdictions as the Manager may designate; (e) to make generally available to the Guarantor's security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Securities Act) an earnings statement covering a twelve-month period beginning after the date of the Underwriting Agreement, which shall satisfy the provision of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder; and (f) during the period beginning on the date of the Underwriting Agreement and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Guarantor that in the reasonable judgment of the Manager are substantially similar to the Offered Securities, without the prior written consent of the Manager. ARTICLE VII. SECTION 7.1 Each of the Company and the Guarantor represents and warrants to each Underwriter that: (a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceeding for such purpose is pending before or threatened by the Commission; (b) No order preventing or suspending the use of any preliminary prospectus has been issued by the Commission, and each preliminary prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act and the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules and regulations thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty will not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company or Guarantor by an Underwriter expressly for use therein; -11- 12 (c) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects with the requirements of the Securities Act or Exchange Act and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty will not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company or Guarantor by an Underwriter expressly for use therein; (d) The Registration Statement conforms, and the Prospectus and any further amendments and supplements to the Registration Statement or the Prospectus will conform, in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty will not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company or Guarantor by an Underwriter expressly for use therein; (e) Each of the Guarantor and the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Pennsylvania, and each has the corporate power and authority to own its properties and conduct its business as described in the Prospectus; each of the Guarantor's wholly owned banking subsidiaries, as described in the Prospectus, has been duly established and is validly existing as a national banking association or a state bank, as the case may be, under the laws of the jurisdiction of its formation; and each other wholly owned subsidiary of the Guarantor has been duly incorporated (or formed) and is validly existing as a corporation (or applicable entity) in good standing under the laws of its jurisdiction of incorporation (or formation); -12- 13 (f) The Guarantor has an authorized equity capitalization as set forth in the Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned by the Guarantor, free and clear of all liens, encumbrances, equities or claims; (g) The Guarantor has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction; (h) All of the issued and outstanding capital stock of each subsidiary of the Guarantors has been duly authorized and validly issued, is fully paid and non-assessable (except, in the case of each of its national bank subsidiaries, as provided in 12 U.S.C. Section 55, as amended), and, except for directors' qualifying shares, all issued and outstanding stock of each such subsidiary owned by the Guarantor is owned by the Guarantor, free and clear of any mortgage, pledge, lien, encumbrance, claim or equity; (i) There are no legal or governmental proceedings pending to which the Company, the Guarantor or any of its subsidiaries is a party or of which any property of the Company, the Guarantor or any of its subsidiaries is the subject, other than as set forth in the Prospectus, which, taking into account the likelihood of the outcome, the damages or other relief sought and other relevant factors, would individually or in the aggregate have a material adverse effect on the financial position, shareholders' equity or results of operation of the Company or the Guarantor and its subsidiaries on a consolidated basis; and to the best of each of the Company's and the Guarantor's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (j) The Underwriting Agreement has been duly authorized, executed and delivered by the Company and by the Guarantor; (k) The Offered Securities have been duly authorized, and when issued and delivered pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; and the Offered Securities, the Offered Guarantees and the Indenture will conform to the descriptions thereof in the Prospectus; -13- 14 (l) The Offered Guarantees have been duly authorized, and when delivered pursuant to this Agreement, will have been duly endorsed on the Offered Securities and executed, and, upon due execution, authentication and delivery of the Offered Securities pursuant to this Agreement, the Offered Guarantees will have been duly delivered and will constitute valid and legally binding obligations of the Guarantor entitled to the benefits provided by the Indenture; (m) The Indenture has been duly authorized, executed and delivered by the Guarantor and the Company and constitutes a valid and legally binding instrument, enforceable against the Company and the Guarantor in accordance with its terms, subject, as to enforcement, to bankruptcy, moratorium, insolvency, fraudulent transfer, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture has been duly qualified under the Trust Indenture Act; (n) The issue and sale of the Offered Securities and the compliance by the Company and the Guarantor with all of the provisions of the Offered Securities, the Offered Guarantees, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company, the Guarantor or any of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company, the Guarantor or any of its subsidiaries is a party or by which the Company, the Guarantor or any of its subsidiaries is bound or to which any of the property or assets of the Company, the Guarantor or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation or the By-Laws of the Company or of the Guarantor, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, the Guarantor or any of its subsidiaries or any of their properties; (o) No consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental body is required for the issue and sale of the Offered Securities, the execution and delivery of the Offered Guarantees or the consummation of the other transactions contemplated by this Agreement, the Offered Guarantees or the Indenture, except such as have been obtained under the Securities Act and the Trust Indenture Act and the exemption of the Company from the provisions of the Investment Company Act of 1940, as amended, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Offered Securities and the Offered Guarantees by the Underwriters; -14- 15 (p) Neither the Company, the Guarantor nor any of its subsidiaries is in violation of its Articles of Incorporation or By-laws or in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or any other agreement or instrument to which it is a party or by which it or any of its properties may be bound; (q) The Company is not and, after giving effect to the offering and sale of the Offered Securities, will not be an "investment company", as such term is defined in the Investment Company Act of 1940, as amended; and (r) Neither the Company, the Guarantor nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and since the respective dates as of which information is given in the Prospectus, there has not been any change in the capital stock or long-term debt of the Company, the Guarantor or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company or the Guarantor and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus. ARTICLE VIII. SECTION 8.1 The Company and the Guarantor jointly and severally agree to indemnify and hold harmless each Underwriter and each person, if any, who controls such Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus (if used within the period set forth in Section 6.1(c) hereof and as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements in the Registration Statement, any preliminary prospectus, the Prospectus or any document incorporated by reference in the Registration Statement not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Company or the Guarantor by any Underwriter expressly for use therein. -15- 16 SECTION 8.2 Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantor, the directors of either, the officers of either who sign the Registration Statement and any person who controls the Company or the Guarantor within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantor to each Underwriter, but only with respect to information relating to such Underwriter furnished in writing by such Underwriter expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus. SECTION 8.3 In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8.1 or 8.2, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing, and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Manager in the case of parties indemnified pursuant to Section 8.1 and by the Company in the case of parties indemnified pursuant to Section 8.2. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but, if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid -16- 17 request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of such indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. SECTION 8.4 If the indemnification provided for in this Article VIII is unavailable to or insufficient to hold harmless an indemnified party under Section 8.1 or 8.2 in respect of any losses, claims, damages, or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantor on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantor on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received (by the Company and the Guarantor on the one hand and the Underwriters on the other) in connection with the offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of such Offered Securities received by the Company (before deducting expenses) bear to the total underwriting discounts and commissions received by the Underwriters in respect thereof, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company and the Guarantor on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantor on the one hand or by the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statements or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8.4 are several in proportion to their respective underwriting obligations and not joint. SECTION 8.5 The Company, the Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Article VIII were determined by pro rata allocation or by any other method of allocation which does not take account of the considerations referred to in Section 8.4. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to -17- 18 include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VIII, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities and Offered Guarantees underwritten and distributed to the public by such Underwriter exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Article VIII are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. SECTION 8.6 The indemnity and contribution agreements contained in this Article VIII and the representations and warranties of the Company and the Guarantor in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by any Underwriter or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, the Guarantor or the directors or officers or any person controlling the Company or the Guarantor and (iii) acceptance of any payment for any of the Offered Securities. SECTION 8.7 Anything to the contrary notwithstanding, the indemnity agreement of the Company and the Guarantor in Section 8.1 hereof, the representations and warranties in Sections 7.1(b), 7.1(c) and 7.1(d) hereof and any representation or warranty as to the accuracy of the Registration Statement or the Prospectus contained in any certificate furnished by the Company or the Guarantor pursuant to Article V hereof, insofar as they may constitute a basis for indemnification for liabilities (other than by payment of the Company or the Guarantor of expenses incurred or paid in the successful defense of any action, suit or proceeding) arising under the Securities Act, shall not extend to the extent of any interest therein of a controlling person or partner of an Underwriter who is a director, officer or controlling person of the Company or the Guarantor when the Registration Statement has become effective, except in each case to the extent that an interest of such character shall have been determined by a court of appropriate jurisdiction as not against public policy as expressed in the Securities Act. Unless in the opinion of counsel for the Company and the Guarantor the matter has been settled by controlling precedent, the Company and the Guarantor will, if a claim for such indemnification is asserted, submit to a court of appropriate jurisdiction the question of whether such interest is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. -18- 19 ARTICLE IX. SECTION 9.1 If any Underwriter shall default in its obligation to purchase the Offered Securities which it has agreed to purchase hereunder, the Underwriters may in their discretion arrange for themselves or another party or other parties to purchase such Offered Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Underwriters do not arrange for the purchase of such Offered Securities, then the Company and the Guarantor shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Underwriters to purchase such Offered Securities on such terms. In the event that, within the respective prescribed periods, the Underwriters notify the Company and the Guarantor that they have so arranged for the purchase of such Offered Securities, or the Company and the Guarantor notify the Underwriters that they have so arranged for the purchase of such Offered Securities, the Underwriters or the Company and the Guarantor shall have the right to postpone the Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company and the Guarantor agree to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the reasonable opinion of the Manager may thereby be made necessary. The term "Underwriters" as used in this Agreement shall include any person substituted under this Article IX with like effect as if such person has originally been a party to this Agreement with respect to such Offered Securities. SECTION 9.2 If, after giving effect to any arrangements for the purchase of the Offered Securities of a defaulting Underwriter or Underwriters as provided in Section 9.1, the aggregate principal amount of such Offered Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Offered Securities, then the Guarantor and the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Offered Securities which such Underwriter agreed to purchase hereunder and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Offered Securities which such Underwriter agreed to purchase hereunder) of the Offered Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. SECTION 9.3 If, after giving effect to any arrangements for the purchase of the Offered Securities of a defaulting Underwriter or Underwriters as provided in Section 9.1, the aggregate principal amount of Offered Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Offered Securities or if the Guarantor and the Company shall not exercise the right described in the immediately preceding paragraph to require non-defaulting Underwriters to purchase Offered Securities of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the -19- 20 part of any non-defaulting Underwriters or the Company or the Guarantor, except for the expenses to be borne by the Company, the Guarantor and the Underwriters as provided in Article X hereof and the indemnity and contribution agreements in Article VIII hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. ARTICLE X. SECTION 10.1 Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, each of the Guarantor and the Company covenants and agrees with the several Underwriters that the Company and the Guarantor will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Guarantor's and the Company's counsel and accountants in connection with the registration of the Offered Securities and the Offered Guarantees under the Securities Act and all other fees or expenses in connection with the preparation, printing and filing of the Registration Statement, any preliminary prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and to dealers; (ii) the cost of printing or producing this Agreement, the Indenture and any Blue Sky and legal investment memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Offered Securities; (iii) all expenses in connection with the qualification of the Offered Securities and the Offered Guarantees for offering and sale under state securities laws as provided in Section 6.1(d) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Offered Securities; (v) the cost of preparing the Offered Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture, the Offered Securities and the Offered Guarantees; (vii) the costs and charges of any transfer agent, registrar or depositary; and (vii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 10.1. It is understood, however, that, except as provided in this Section 10.1 and Articles VIII and XI hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Offered Securities by them and any advertising expenses connected with any offers they may make. ARTICLE XI. SECTION 11.1 If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company or the -20- 21 Guarantor to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company or the Guarantor shall be unable to perform its obligations under this Agreement, the Company and the Guarantor will reimburse the Underwriters, or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with the Offered Securities. SECTION 11.2 This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 11.3 This Agreement shall be governed by and construed in accordance with the laws of the State of New York. -21- 22 SCHEDULE I DELAYED DELIVERY CONTRACT [DATE] Ladies and Gentlemen: The undersigned hereby agrees to purchase from Mellon Funding Corporation, a Pennsylvania corporation (the "Company"), and the Company agrees to sell to the undersigned $_______________________ principal amount of the Company's [TITLE OF ISSUE], which are guaranteed as to payment of principal, premium, if any, and interest, if any, by Mellon Financial Corporation (the "Securities"), offered by the Prospectus dated [DATE] and Prospectus Supplement dated [DATE], receipt of copies of which are hereby acknowledged, at a purchase price of [PERCENTAGE]% of the principal amount thereof plus accrued interest from the date from which interest accrues as set forth in this contract, and on the further terms and conditions set forth in this contract. The undersigned does not contemplate selling Securities prior to making payment therefor. The undersigned will purchase from the Company Securities in the principal amounts and on the delivery dates set forth below:
Delivery Principal Plus Accrued Date Amount Interest From: ---- ------ -------------- _________________ $_________________ _________________ _________________ $_________________ _________________ _________________ $_________________ _________________
Each such date on which Securities are to be purchased hereunder is hereinafter referred to as a "Delivery Date". Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date will be made to the Company or its order by certified or official bank check drawn on a bank approved by the Company and in New York Clearing House funds at the office of _______________, New York, N.Y., or by wire transfer to a bank account specified by the Company, on the Delivery Date upon delivery to the undersigned of the Securities to be purchased by the undersigned on the Delivery Date, in definitive fully registered form and in such denominations and registered in such names as the undersigned may designate by written, telex or facsimile communication addressed to the Company not less than five full business days prior to the Delivery Date. The obligation of the undersigned to take delivery of and make payment for the Securities on the Delivery Date will be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company shall have sold, and delivery shall have taken place to -22- 23 the underwriters (the "Underwriters") named in the Prospectus Supplement referred to above, of such part of the Securities as is to be sold to them. Promptly after completion of sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. Failure to take delivery of and make payment for Securities by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract, as of the date first above written, between the Company and the undersigned when such counterpart is so mailed or delivered. This contract shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, [PURCHASER] By: -------------------------- Name: Title: [ADDRESS] Accepted: MELLON FUNDING CORPORATION By: -------------------------- Name: Title: -23- 24 PURCHASER--PLEASE COMPLETE AT TIME OF SIGNING The name, telephone number and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed is as follows: (Please print.)
Telephone No. Name (Including Area Code) Department ---- --------------------- ---------- _________________ _____________________ ______________ _________________ _____________________ ______________ _________________ _____________________ ______________ _________________ _____________________ ______________ _________________ _____________________ ______________ _________________ _____________________ ______________
-24- 25 EXHIBIT A Opinion of the Counsel of the Guarantor And Counsel to the Company The opinion of the General Counsel, Associate General Counsel or Assistant General Counsel of the Guarantor and counsel to the Company to be delivered pursuant to Section 5.1(b) of the document entitled Mellon Funding Corporation Underwriting Agreement Standard Provisions (Debt) will be to the following effect (all terms used herein which are defined in the Agreement have the meanings set forth therein): (i) Each of the Guarantor and the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Pennsylvania, and each has the corporate power and authority to own its properties and conduct its business as described in the Prospectus; and each of the Guarantor's wholly owned banking subsidiaries, as described in the Prospectus, has been duly established and is validly existing as a national banking association or a state bank, as the case may be, under the laws of the jurisdiction of its formation. (ii) The Guarantor has an authorized equity capitalization as set forth in the Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned by the Guarantor, free and clear of all liens, encumbrances, equities or claims. (iii) The Guarantor has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction. (iv) All of the issued and outstanding capital stock of each subsidiary of the Guarantor has been duly authorized and validly issued, is fully paid and non-assessable (except, in the case of each of its national bank subsidiaries, as provided in 12 U.S.C. Section 55, as amended), and, except for directors' qualifying shares, is owned by the Guarantor, free and clear of any mortgage, pledge, lien, encumbrance, claim or equity. (v) To the best of such counsel's knowledge there are no legal or governmental proceedings pending to which the Company, the Guarantor or any of its subsidiaries is a party or of which any property of the Company, the Guarantor or any of its subsidiaries is the subject, other than as set forth in the Prospectus, which, taking into account the likelihood of the outcome, the damages or other relief sought and other relevant factors, would individually or in the aggregate have a material adverse effect on the financial position, -25- 26 shareholders' equity or results of operation of the Company or the Guarantor and its subsidiaries on a consolidated basis; and to the best of such counsel's knowledge no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (vi) The Agreement has been duly authorized, executed and delivered by the Company and by the Guarantor. (vii) The Offered Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; and the Offered Securities, the Offered Guarantees and the Indenture conform to the descriptions thereof in the Prospectus. (viii) The Offered Guarantees have been duly authorized, endorsed on the Offered Securities and executed, and, upon due execution, authentication and delivery of the Offered Securities pursuant to the Agreement, the Offered Guarantees will have been duly delivered and will constitute valid and legally binding obligations of the Guarantor entitled to the benefits provided by the Indenture. (ix) The Indenture has been duly authorized, executed and delivered by the Guarantor and the Company and constitutes a valid and legally binding instrument, enforceable against the Company and the Guarantor in accordance with its terms, subject, as to enforcement, to bankruptcy, moratorium, insolvency, fraudulent transfer, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Indenture has been duly qualified under the Trust Indenture Act of 1939 (the "Trust Indenture Act"), and all taxes and fees required to be paid with respect to the execution of the Indenture and the issuance of the Offered Securities and the Offered Guarantees have been paid. (x) The issue and sale of the Offered Securities and the compliance by the Company and the Guarantor with all of the provisions of the Offered Securities, the Offered Guarantees, the Indenture and the Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company, the Guarantor or any of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company, the Guarantor or any of its subsidiaries is a party or by which the Company, the Guarantor or any of its subsidiaries is bound or to which any of the property or assets of the Company, the Guarantor or any of its subsidiaries is subject, nor will such action result -26- 27 in any violation of the provisions of the Articles of Incorporation or the By-Laws of the Company or of the Guarantor, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, the Guarantor or any of its subsidiaries or any of their properties. (xi) No consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory authority or other governmental body is required for the issue and sale of the Offered Securities, the execution and delivery of the Offered Guarantees or the consummation of the other transactions contemplated by the Agreement, the Offered Guarantees or the Indenture, except such as have been obtained under the Securities Act of 1933 (the "Securities Act") and the Trust Indenture Act and the exemption of the Company from the provisions of the Investment Company Act of 1940, as amended, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Offered Securities and the Offered Guarantees by the Underwriters. (xii) The documents incorporated by reference in the Prospectus or any further amendment or supplement made by the Company and the Guarantor prior to the Closing Date (other than the financial statements and related schedules and statistical information contained or required to be contained therein, as to which such counsel need express no opinion or belief), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Securities Act or the Securities Exchange Act of 1934 (the "Exchange Act"), as applicable, and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents (other than the financial statements and related schedules and statistical information contained or required to be contained therein, as to which such counsel need express no opinion or belief), when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Securities Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Securities Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading. (xiii) The Registration Statement and the Prospectus and any further amendments and supplements thereto made by the Company or the Guarantor prior to the Closing Date (other than the financial statements and related -27- 28 schedules and statistical information contained or required to be contained therein, as to which such counsel need express no opinion or belief) comply as to form in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations thereunder; such counsel has no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by the Company or the Guarantor prior to the Closing Date (other than the financial statements and related schedules and statistical information contained or required to be contained therein, as to which such counsel need express no opinion or belief) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus or any further amendment or supplement thereto made by the Company or the Guarantor prior to the Closing Date (other than the financial statements and related schedules and statistical information contained or required to be contained therein, as to which such counsel need express no opinion or belief) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or that, as of the Closing Date, either the Registration Statement or the Prospectus or any further amendment or supplement thereto made by the Company or the Guarantor prior to the Closing Date (other than the financial statements and related schedules and statistical information contained or required to be contained therein, as to which such counsel need express no opinion or belief) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and such counsel does not know of any amendment to the Registration Statement required to be filed or of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required. (xiv) The Company is exempt from the registration and other provisions of the Investment Company Act of 1940, as amended. In rendering such opinion, such counsel may rely as to matters of fact upon certificates of officers of the Guarantor and its subsidiaries, provided that such counsel shall state that he believes he is justified in relying upon such certificates. -28- EX-4.3 3 SECOND SUPPLEMENTAL INDENTURE 1 Exhibit 4.3 MELLON FUNDING CORPORATION, Issuer AND MELLON FINANCIAL CORPORATION, Guarantor TO THE CHASE MANHATTAN BANK, Trustee SECOND SUPPLEMENTAL INDENTURE Dated as of , 2000 -------- ================================================================================ 2 Second supplemental indenture, dated as of , 2000 among Mellon Funding Corporation (formerly Mellon Financial Company), a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania having its principal office at One Mellon Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258 (herein called the "Company"), Mellon Financial Corporation (formerly Mellon Bank Corporation), a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania having its principal office at One Mellon Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258 (herein called the "Guarantor"), and The Chase Manhattan Bank, a New York banking association duly organized and existing under the laws of the state of New York having its principal executive office at 1 Chase Manhattan Plaza, New York, New York 10081, as Trustee (herein called the "Trustee"). RECITALS The Company and the Guarantor have heretofore executed and delivered to the Trustee a certain indenture, dated as of May 2, 1988 (herein called the "Indenture"), and the First Supplemental Indenture, dated as of November 29, 1990 (herein called the "First Supplemental Indenture"), pursuant to which one or more series of unsecured debentures, notes or other evidences of indebtedness of the Company guaranteed by the Guarantor (herein called the "Securities") may be issued from time to time by the Company. All capitalized terms used in this Second Supplemental Indenture which are defined in the Indenture or the First Supplemental Indenture shall have the meanings assigned to them in the Indenture or the First Supplemental Indenture, as applicable. The Company and the Guarantor desire and have requested the Trustee to join with them in the execution and delivery of this Second Supplemental Indenture for the purpose of amending the Indenture in certain respects with respect to the Securities of any series created on or after the date hereof and in order to permit the Company to elect that the Securities of any such series, in whole or in any specified part, shall be defeasible. Section 1001(8) of the Indenture provides that a Supplemental Indenture may be entered into by the Company, the Guarantor and the Trustee without the consent of any Holders to make provisions with respect to matters arising under the Indenture which do not adversely affect the interests of the Holders of Securities of any series in any material respect. The Company has furnished the Trustee with (i) an Opinion of Counsel stating that the execution of the Second Supplemental Indenture is authorized or permitted by the Indenture, (ii) an Officer's Certificate and an Opinion of Counsel each stating that all conditions precedent provided for in the Indenture with respect to this Second Supplemental Indenture have been complied with, and (iii) a copy of the resolutions of its Board of Directors certified by its Secretary pursuant to which this Second Supplemental Indenture has been authorized. -2- 3 All things necessary to make this Second Supplemental Indenture a valid agreement of the Company, the Guarantor and the Trustee and a valid amendment of and supplement to the Indenture have been done. NOW THEREFORE THIS SECOND SUPPLEMENTAL 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 any series thereof, as follows: ARTICLE ONE AMENDMENTS TO THE INDENTURE SECTION 1.1. Section 101 of the Indenture is amended to include therein the following provisions: (a) After the definition of corporation: "'Covenant Defeasance' has the meaning specified in Section 1403." (b) After the definition of Defaulted Interest: "'Defeasance' has the meaning specified in Section 1402." (c) After the definition of Trust Indenture Act: "U.S. Government Obligation" has the meaning specified in Section 1404." (d) The definition of Outstanding is amended by adding the following immediately after subpart in (iii): "(iv) Securities as to which Defeasance has been effected pursuant to Section 1402;" SECTION 1.2. Section 301 of the Indenture is amended by: (a) Section 301(17) is renumbered Section 301(18). (b) A new Section 301(17) is added to read in its entirety as follows: "(17) if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 1402 or Section 1403 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 -3- 4 requirements of Section 1404(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;" SECTION 1.3. The following Article Fourteen is added immediately following the last paragraph of Section 1303: "ARTICLE FOURTEEN DEFEASANCE AND COVENANT DEFEASANCE SECTION 1401. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. The Company may elect, at its option at any time, to have Section 1402 or Section 1403 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 1402 or 1403, 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 1402. 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 1404 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 1404 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 -4- 5 Securities notwithstanding the prior exercise of its option (if any) to have Section 1403 applied to such Securities. SECTION 1403. 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 benefit of the Holders of such Securities and (2) the occurrence of any event specified in Sections 601(4) (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)) and 601(7) shall be deemed not to be or result in an Event of 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 1404 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 601(4)), 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 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The following shall be the conditions to the application of Section 1402 or Section 1403 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 -5- 6 contemplated by Section 301 with respect to such Securities, or (D) a combination thereof, in each case sufficient, in the option 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 (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any 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 1402 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 -6- 7 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 of such series 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 1403 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, 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(5) and (6), 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). (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 such Act or exempt from registration thereunder. -7- 8 (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 1405. 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 1406, the Trustee and any such other trustee are referred to collectively as the "Trustee") pursuant to Section 1404 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 1404 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 1404 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. SECTION 1406. 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 -8- 9 which the Company has been discharged or released pursuant to Section 1402 or 1403 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 1405 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." ARTICLE II MISCELLANEOUS Section 2.1. All the provisions of this Second Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented and amended by this Second Supplemental Indenture, shall be read, taken and construed as one and the same instrument. Section 2.2. The provisions and benefit of this Second Supplemental Indenture shall not be effective with respect to Securities outstanding prior to the date hereof. Section 2.3. This Second Supplemental Indenture 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. Section 2.4. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Second Supplemental Indenture by and of the provisions of the Trust Indenture Act, such required provision shall control. Section 2.5. All covenants and agreements in this Second Supplemental Indenture by the Company and the Guarantor shall bind their respective successors and assigns, whether so expressed or not. Section 2.6. In case any provision in this Second Supplemental Indenture 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. Section 2.7. Nothing in this Second Supplemental Indenture, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Holders, any benefit or legal or equitable right, remedy or claim under this Second Supplemental Indenture. -9- 10 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental 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, Issuer BY: ---------------------------------- Name: Steven G. Elliott Title: President and Chief Executive Officer Attest: - ------------------------------ Secretary MELLON FINANCIAL CORPORATION, Guarantor BY: ----------------------------------- Name: Martin G. McGuinn Title: Chairman and Chief Executive Officer Attest: - ------------------------------ Secretary THE CHASE MANHATTAN BANK, Trustee BY: ----------------------------------- Name: --------------------------------- Title: -------------------------------- Attest: - ------------------------------ -10- 11 COMMONWEALTH OF PENNSYLVANIA ) ) ss.: COUNTY OF ALLEGHENY ) On the day of , 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 & 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. ---------------------------------------- Notary Public , Notary Public -------------------- PITTSBURGH, ALLEGHENY COUNTY MY COMMISSION EXPIRES ------------------- Member, Penn. Assoc. of Notaries [Notarial Seal] COMMONWEALTH OF PENNSYLVANIA ) ) ss.: COUNTY OF ALLEGHENY ) On the day of , 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. ---------------------------------------- Notary Public , Notary Public -------------------- PITTSBURGH, ALLEGHENY COUNTY MY COMMISSION EXPIRES ------------------- Member, Penn. Assoc. of Notaries [Notarial Seal] -11- 12 STATE OF NEW YORK ) ) ss.: COUNTY OF ) ----------- On the day of , 2000, before me personally came , to me known, who, being by me duly sworn, did depose and say that he is THE CHASE MANHATTAN BANK, 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. ---------------------------------------- Notary Public Notary Public, State of New York No. ------------------------------------- COMMISSION EXPIRES --------------------- [Notarial Seal] -12- EX-4.4 4 EXHIBIT 4.4 1 Exhibit 4.4 MELLON FUNDING CORPORATION, ISSUER AND MELLON FINANCIAL CORPORATION, GUARANTOR TO BANK ONE TRUST COMPANY, N.A., TRUSTEE INDENTURE DATED AS OF _____ __, 2000 PROVIDING FOR ISSUANCE OF SUBORDINATED DEBT SECURITIES IN SERIES FROM TIME TO TIME 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 (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 - ---------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. 3 TRUST INDENTURE ACT SECTION INDENTURE SECTION (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. 4 TABLE OF CONTENTS
Page ---- PARTIES......................................................................... 1 RECITALS OF THE COMPANY ........................................................ 1 RECITALS OF THE GUARANTOR ...................................................... 1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. Definitions: Act...................................................... 2 Affiliate; control....................................... 2 Authenticating Agent..................................... 2 Bank..................................................... 2 Board of Directors....................................... 2 Board Resolution......................................... 2 Business Day............................................. 2 Commission............................................... 2 Company.................................................. 2 Company Request; Company Order; Guarantor Request; Guarantor Order....................................... 2 Corporate Trust Office................................... 2 Corporation.............................................. 3 Default.................................................. 3 Defaulted Interest....................................... 3 Depositary............................................... 3 Event of Default......................................... 3 Floating or Adjustable Rate Provision.................... 3 Floating or Adjustable Rate Security..................... 3 Global Security.......................................... 3 Guarantee................................................ 3 Guarantor................................................ 3 Holder................................................... 3 Indenture................................................ 3 Interest................................................. 4 Interest Payment Date.................................... 4 Maturity................................................. 4 Officers' Certificate.................................... 4 Opinion of Counsel....................................... 4 Original Issue Discount Security......................... 4 Outstanding.............................................. 4 Paying Agent............................................. 5 Periodic Offering........................................ 5 Person................................................... 5 Place of Payment......................................... 5
- ---------- NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture. 5
Page ---- Predecessor Security..................................... 5 Redemption Date.......................................... 5 Redemption Price......................................... 5 Regular Record Date...................................... 5 Securities............................................... 5 Security Register; Security Registrar.................... 5 Senior Indebtedness of the Company....................... 5 Senior Indebtedness of the Guarantor..................... 5 Special Record Date...................................... 6 Stated Maturity.......................................... 6 Subsidiary............................................... 6 Trustee.................................................. 6 Trust Indenture Act...................................... 6 Vice President........................................... 6 Voting Stock of the Company.............................. 6 SECTION 102. Compliance Certificates and Opinions..................... 7 SECTION 103. Form of Documents Delivered to Trustee................... 7 SECTION 104. Acts of Holders; Record Dates............................ 8 SECTION 105. Notices, Etc., to Trustee, Company and Guarantor......... 8 SECTION 106. Notice to Holders; Waiver................................ 9 SECTION 107. Conflict with Trust Indenture Act........................ 9 SECTION 108. Effect of Headings and Table of Contents................. 9 SECTION 109. Successors and Assigns................................... 9 SECTION 110. Separability Clause...................................... 10 SECTION 111. Benefits of Indenture.................................... 10 SECTION 112. Governing Law............................................ 10 SECTION 113. Legal Holidays........................................... 10 ARTICLE TWO FORMS OF SECURITIES AND GUARANTEES SECTION 201. Forms Generally.......................................... 10 SECTION 202. Form of Face of Security................................. 11 SECTION 203. Form of Reverse of Security.............................. 13 SECTION 204. Additional Provisions Required in Global Security........ 16 SECTION 205. Form of Certificate of Authentication.................... 16 SECTION 206. Form of Guarantee........................................ 17 ARTICLE THREE The Securities SECTION 301. Amount Unlimited; Issuable in Series..................... 19 SECTION 302. Denominations............................................ 21
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Page ---- SECTION 303. Execution, Authentication, Delivery and Dating........... 21 SECTION 304. Temporary Securities..................................... 23 SECTION 305. Registration, Registration of Transfer and Exchange...... 24 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......... 25 SECTION 307. Payment of Interest; Interest Rights Preserved........... 26 SECTION 308. Persons Deemed Owners.................................... 27 SECTION 309. Cancellation............................................. 27 SECTION 310. Computation of Interest.................................. 28 ARTICLE FOUR GUARANTEE OF SECURITIES SECTION 401. Unconditional Guarantee.................................. 28 SECTION 402. Execution of Guarantees.................................. 29 ARTICLE FIVE SATISFACTION AND DISCHARGE SECTION 501. Satisfaction and Discharge of Indenture.................. 29 SECTION 502. Application of Trust Money............................... 30 ARTICLE SIX REMEDIES SECTION 601. Events of Default........................................ 30 SECTION 602. Acceleration of Maturity; Rescission and Annulment....... 31 SECTION 603. Collection of Indebtedness and Suits for Enforcement by Trustee.................................................. 32 SECTION 604. Trustee May File Proofs of Claim......................... 33 SECTION 605. Trustee May Enforce Claims Without Possession of Securities............................................... 33 SECTION 606. Application of Money Collected........................... 34 SECTION 607. Limitation on Suits...................................... 34 SECTION 608. Unconditional Right of Holders to Receive Principal, Premium and Interest..................................... 34 SECTION 609. Restoration of Rights and Remedies....................... 35 SECTION 610. Rights and Remedies Cumulative........................... 35 SECTION 611. Delay or Omission Not Waiver............................. 35 SECTION 612. Control by Holders....................................... 35 SECTION 613. Waiver of Past Defaults.................................. 36 SECTION 614. Undertaking for Costs.................................... 36 SECTION 615. Waiver of Stay or Extension Laws......................... 37
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Page ---- ARTICLE SEVEN THE TRUSTEE SECTION 701. Certain Duties and Responsibilities...................... 37 SECTION 702. Notice of Defaults....................................... 37 SECTION 703. Certain Rights of Trustee................................ 37 SECTION 704. Not Responsible for Recitals or Issuance of Securities and Guarantees........................................... 38 SECTION 705. May Hold Securities...................................... 39 SECTION 706. Money Held in Trust...................................... 39 SECTION 707. Compensation and Reimbursement........................... 39 SECTION 708. Disqualification; Conflicting Interests.................. 40 SECTION 709. Corporate Trustee Required; Eligibility.................. 40 SECTION 710. Resignation and Removal; Appointment of Successor........ 40 SECTION 711. Acceptance of Appointment by Successor................... 41 SECTION 712. Merger, Conversion, Consolidation or Succession to Business................................................. 42 SECTION 713. Preferential Collection of Claims Against Company and Guarantor................................................ 42 SECTION 714. Appointment of Authenticating Agent...................... 42 ARTICLE EIGHT HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR SECTION 801. Company and Guarantor to Furnish Trustee Names and Addresses of Holders..................................... 43 SECTION 802. Preservation of Information; Communications to Holders.................................................. 44 SECTION 803. Reports by Trustee....................................... 44 SECTION 804. Reports by Company and Guarantor......................... 44 ARTICLE NINE CONSOLIDATION, MERGER AND SALE SECTION 901. Company May Consolidate, Etc., Only on Certain Terms.................................................... 45 SECTION 902. Successor Corporation Substituted for Company............ 45 SECTION 903. Guarantor May Consolidate, Etc., Only on Certain Terms.................................................... 45 SECTION 904. Successor Corporations Substituted for Guarantor......... 46 SECTION 905. Assumption by Guarantor.................................. 47
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Page ---- ARTICLE TEN SUPPLEMENTAL INDENTURES SECTION 1001. Supplemental Indentures Without Consent of Holders....... 47 SECTION 1002. Supplemental Indentures With Consent of Holders.......... 48 SECTION 1003. Execution of Supplemental Indentures..................... 49 SECTION 1004. Effect of Supplemental Indentures........................ 49 SECTION 1005. Conformity with Trust Indenture Act...................... 49 SECTION 1006. Reference in Securities to Supplemental Indentures....... 66 ARTICLE ELEVEN COVENANTS SECTION 1101. Payment of Principal, Premium and Interest............... 50 SECTION 1102. Maintenance of Office or Agency.......................... 50 SECTION 1103. Money for Security Payments to Be Held in Trust.......... 51 SECTION 1104. Corporate Existence...................................... 52 SECTION 1105. Company Statement as to Compliance....................... 52 SECTION 1106. Guarantor Statement as to Compliance..................... 52 SECTION 1107. Limitation Upon Disposition of Voting Stock of Company.................................................. 53 SECTION 1108. Waiver of Certain Covenants.............................. 53 ARTICLE TWELVE REDEMPTION OF SECURITIES SECTION 1201. Applicability of Article................................. 53 SECTION 1202. Election to Redeem; Notice to Trustee.................... 53 SECTION 1203. Selection by Security Registrar of Securities to Be Redeemed................................................. 54 SECTION 1204. Notice of Redemption..................................... 54 SECTION 1205. Deposit of Redemption Price.............................. 55 SECTION 1206. Securities Payable on Redemption Date.................... 55 SECTION 1207. Securities Redeemed in Part.............................. 55 ARTICLE THIRTEEN SINKING FUNDS SECTION 1301. Applicability of Article................................. 56 SECTION 1302. Satisfaction of Sinking Fund Payments with Securities.... 56 SECTION 1303. Redemption of Securities for Sinking Fund................ 56
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Page ---- ARTICLE FOURTEEN SUBORDINATION OF SECURITIES AND GUARANTEES SECTION 1401. Securities Subordinate to Senior Indebtedness of the Company.................................................. 57 SECTION 1402. Guarantees Subordinate to Senior Indebtedness of the Guarantor................................................ 58 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...................................... 60 SECTION 1404. Payment Permitted If No Default.......................... 61 SECTION 1405. Trustee Not Charged with Knowledge of Prohibition........ 61 SECTION 1406. Trustee to Effectuate Subordination...................... 62 SECTION 1407. Rights of Trustee as Holder of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor................................................ 62 SECTION 1408. Article Applicable to Paying Agents...................... 62 ARTICLE FIFTEEN DEFEASANCE AND COVENANT DEFEASANCE SECTION 1501 Company Option to Effect Defeasance or Covenant Defeasance............................................... 62 SECTION 1502 Defeasance............................................... 63 SECTION 1503 Covenant Defeasance ..................................... 63 SECTION 1504 Conditions to Defeasance or Covenant Defeasance.......... 63 SECTION 1505 Deposited Money and U.S. Government Obligations to be Held in Trust; Miscellaneous............................. 65 SECTION 1506 Reinstatement............................................ 65 TESTIMONIAL SIGNATURES AND SEALS ACKNOWLEDGMENTS
10 INDENTURE, dated as of _____ __, 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: 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; 11 (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. "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. 2 12 "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. "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. 3 13 "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 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 4 14 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, means the place or places where the principal of (and premium, if any) and interest on, or, if so specified, the principal (and premium, if any) only of, the Securities of that series are payable as specified as contemplated by Section 301, or, if not so specified, as specified in Section 1102. "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 First Trust of Illinois, N.A., as successor to Continental Bank, National Association, as trustee, and all other notes and obligations that may be 5 15 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 First Trust of Illinois, N.A., 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) 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 6 16 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. 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 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, 7 17 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 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 8 18 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 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. 9 19 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. 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. 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 10 20 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.......] 11 21 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 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 12 22 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] 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 August 25, 1995 (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, 13 23 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 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 FOR 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 this series may be declared due and payable in the manner and with the effect provided in the Indenture.] 14 24 [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 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. 15 25 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 202 and 203, 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 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. 16 26 BANK ONE TRUST COMPANY, N.A. as Trustee By Authorized Signatory BANK ONE TRUST COMPANY, N.A. as Trustee 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. 17 27 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 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] Attest: [Authorized Signature] 18 28 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 303, 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; (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 19 29 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 602; (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 101; (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; (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 1502 or Section 1503 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 1504(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 20 30 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 303. 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 301. 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 21 31 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, 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 201 and 301, 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. 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 22 32 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 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. 23 33 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 will keep at an office or agency to be maintained by the Company as provided in Section 1102 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. At all reasonable times, the Security Register shall be open to inspection by the Trustee. Unless and until otherwise determined by the Company, by Board Resolution, the Security Register shall be kept in the City of Pittsburgh, Pennsylvania, at the Corporate Trust Office of the Bank, which is hereby initially appointed security registrar ("Security Registrar", which term includes any successor appointed pursuant to this Section) 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 maintained pursuant to Section 1102 for such purpose 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. 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. 24 34 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. 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. 25 35 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. 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 26 36 Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such 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 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. 27 37 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. 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. 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 28 38 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. 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, 29 39 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 (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. 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 30 40 (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 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, 31 41 (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; 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 (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 32 42 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 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. 33 43 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. 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; 34 44 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. 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 35 45 (2) such direction shall not be unduly prejudicial to the rights of Holders not joining therein nor expose the Trustee to personal liability. (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. 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 36 46 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. 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: 37 47 (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; (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. 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 38 48 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 (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. 39 49 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. (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, 40 50 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 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 41 51 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 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 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 42 52 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 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. ARTICLE EIGHT HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR 43 53 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 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 44 54 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. 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. 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 45 55 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 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. 46 56 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. 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 47 57 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 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 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 48 58 (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 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 49 59 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. 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. In the absence of any such provisions with respect to the Securities of any series, (i) the Places of Payment for such Securities shall be the City of Pittsburgh, Pennsylvania and the Borough of Manhattan, The City of New York (except that as to payment of interest the City of Pittsburgh, Pennsylvania shall be the only Place of Payment) and (ii) such office or agency for payment for Securities of such series shall initially be the principal office of the Bank in the City of Pittsburgh, Pennsylvania and, with respect to principal (and premium, if any) only, the Trustee's office in the Borough of Manhattan, The City of New York, and such office or agency for surrender for registration of transfer or exchange of and for service of notices and demands in respect of Securities of such series shall initially be the principal office of the Bank in the City of Pittsburgh, Pennsylvania and the Bank's facility in the Borough of Manhattan, The City of New York. The Company and the Guarantor will give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency. 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 50 60 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 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 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. 51 61 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 (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. 52 62 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 waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect. 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 53 63 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 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. 54 64 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 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. 55 65 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 theretofor delivered. Not 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. 56 66 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, 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. 57 67 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 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 58 68 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. 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 59 69 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 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 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 60 70 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. 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 61 71 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 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. 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 62 72 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 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 63 73 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 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) 64 74 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). (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. 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 65 75 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. 66 76 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 ------------------------------- President and Chief Executive Officer Attest: ------------------------------- Secretary MELLON FINANCIAL CORPORATION [CORPORATE SEAL] By ------------------------------- Chairman and Chief Executive Officer Attest: ------------------------------- Secretary BANK ONE TRUST COMPANY, N.A. [Corporate Seal] By ------------------------------- Senior Vice President and Corporate Trust Counsel Attest: 77 COMMONWEALTH OF PENNSYLVANIA COUNTY OF ALLEGHENY ss: On the th day of _____, 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 ---------------- Pittsburgh, Allegheny County My Commission Expires ---------- Member, Pennsylvania Association of Notaries COMMONWEALTH OF COUNTY OF ALLEGHENY ss: On the th day of _____, 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 ---------------- Pittsburgh, Allegheny County My Commission Expires ---------- Member, Pennsylvania Association of Notaries 78 STATE OF ILLINOIS COUNTY OF ss: On _____ , 2000 before me, , Notary Public, personally appeared Sandra L. Caruba, 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. ----------- [NOTARIAL SEAL] ----------- Comm. # ----------- Notary Public-Illinois My Comm. Expires ---------------- 2 EX-5.1 5 OPINION OF CARL KRASIK, ESQ. 1 Exhibit 5.1 March 24, 2000 Mellon Financial Corporation One Mellon Center 500 Grant Street Pittsburgh, PA 15258 Re: Mellon Financial Corporation Mellon Funding Corporation Debt Securities Registration Statement on Form S-3 Gentlemen: I am the Associate General Counsel of Mellon Financial Corporation, a Pennsylvania corporation (the "Corporation"), and, in that capacity, have acted as counsel for the Corporation and for the Corporation's wholly owned subsidiary, Mellon Funding Corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement") relating to the proposed offering of up to $1.5 billion aggregate principal amount of debt securities to be issued from time to time by the Company (the "Debt Securities") and guaranteed as to payment of principal, premium, if any, and interest, if any, by the Corporation (the "Guarantees"). The Debt Securities will constitute either senior indebtedness of the Company (the "Senior Securities") or subordinated indebtedness of the Company (the "Subordinated Securities"). The Senior Securities and the related Guarantees are to be issued under an Indenture dated as of May 2, 1988, as supplemented by the First Supplemental Indenture dated as of November 29, 1990 and the Second Supplemental Indenture, dated as of ________ __, 2000, the form of which has been filed as Exhibit 4.3 to the Registration Statement, (the "Senior Indenture"), among the Company, the Corporation and The Chase Manhattan Bank, as Trustee. The Subordinated Securities and the related Guarantees are to be issued under a Subordinated Indenture, the form of which has been filed as Exhibit 4.4 to the Registration Statement (the "Subordinated Indenture"). The Senior Indenture and the Subordinated Indenture are collectively referred to herein as the "Indentures". This opinion is being furnished pursuant to the requirements of Form S-3 and Item 601 of Regulation S-K under the Securities Act of 1933, as amended. In furnishing this opinion, I, or attorneys under my supervision, have examined the Registration Statement, as well as the prospectus included therein (the "Prospectus"), to be filed with the Securities and Exchange Commission, in connection with which this opinion is to be filed as an Exhibit. I, or attorneys under my supervision, have also examined the Senior Indenture, the Subordinated Indenture and such other documents, legal opinions and precedents, corporate and other records of the Company and the Corporation and certificates of public officials and officers of the Company and the Corporation as I have deemed necessary or appropriate to provide a basis for the opinions set forth herein. In such examination, I, or such attorneys, have assumed the genuineness of all signatures, the authenticity of all documents submitted to me or them as originals and the conformity to original documents of all documents submitted to me or them as certified or photostatic copies. Based upon and subject to the foregoing and subject to the qualifications and limitations set forth below, I am of the opinion that: 1. The Company and the Corporation have been duly incorporated and are validly existing as corporations under the laws of the Commonwealth of Pennsylvania; 2. The Registration Statement has been duly authorized by all necessary corporate action of the Company and the Corporation, respectively; 3. The Debt Securities, when (i) the terms thereof have been duly authorized and such securities have been duly executed and 2 Mellon Financial Corporation March 24, 2000 Page 2 authenticated, all pursuant to the Indentures and (ii) issued, sold and delivered as contemplated by the Prospectus against payment therefor, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indentures; 4. The Guarantees, when endorsed upon the Debt Securities and duly executed and upon the due execution, authentication and issuance of the Debt Securities, will constitute valid and legally binding obligations of the Corporation entitled to the benefits provided by the Indentures; 5. The Senior Indenture has been duly authorized by all necessary corporate action on behalf of the Company and the Corporation and constitutes a valid and legally binding instrument; and 6. The Subordinated Indenture has been duly authorized by all necessary corporate action on behalf of the Company and the Corporation and, when duly executed and delivered by the Company and the Corporation, will constitute a valid and legally binding instrument. The opinions set forth in paragraphs 3 through 6 hereof are qualified to the extent that the obligations of the Company and the Corporation may be limited by bankruptcy, moratorium, insolvency, reorganization or other laws of general applicability relating to or affecting the enforcement of creditors' rights, and by general equity principles. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the use of my name in the Prospectus under the heading "Validity of Debt Securities and Guarantees." By giving such consent, I do not thereby admit that I am within the category of persons whose consents are required under Section 7 of the Securities Act of 1933, as amended. Very truly yours, /s/ CARL KRASIK EX-8.1 6 OPINION OF MICHAEL K. HUGHEY, ESQ. 1 Exhibit 8.1 March 24, 2000 Mellon Financial Corporation One Mellon Center 500 Grant Street Pittsburgh, PA 15258 Re: Mellon Financial Corporation Mellon Funding Corporation Debt Securities Registration Statement on Form S-3 Gentlemen: I am the Senior Vice President and Controller of Mellon Financial Corporation and Senior Vice President, Controller and Director of Taxes of Mellon Bank, N.A., the principal subsidiary of Mellon Financial Corporation, a Pennsylvania corporation (the "Corporation"). In that capacity, I am responsible for the corporate tax affairs of the Corporation and its subsidiaries, and I have acted as tax counsel for the Corporation in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement"), including the prospectus (the "Prospectus") contained therein as filed with the Securities and Exchange Commission. I hereby confirm my opinion as set forth under the heading "Tax Considerations" in the Prospectus. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the use of my name in the Prospectus under the heading "Validity of Debt Securities and Guarantees." By giving such consent, I do not thereby admit that I am within the category of the persons whose consents are required under Section 7 of the Securities Act of 1933, as amended. Very truly yours, /s/ MICHAEL K. HUGHEY EX-12.1 7 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 Exhibit 12.1 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Mellon Financial Corporation (parent Corporation)(a)
Year ended December 31, ---------------------------------------- (dollar amounts in millions) 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- 1. Income before income taxes and equity in undistributed net income of subsidiaries $707 $253 $352 $351 $473 2. Fixed charges: interest expense, one-third of rental expense net of income from subleases, trust- preferred securities expense and amortization of debt issuance costs 224 205 175 101 97 ---- ---- ---- ---- ---- 3. Income before income taxes and equity in undistributed net income of subsidiaries, plus fixed charges (line 1 + line 2) $931 $458 $527 $452 $570 ---- ---- ---- ---- ---- 4. Preferred stock dividend requirements (b) $ -- $ 13 $ 32 $ 69 $ 62 ---- ---- ---- ---- ---- 5. Ratio of earnings (as defined) to fixed charges (line 3 divided by line 2) 4.15 2.24 3.01 4.46 5.88 6. Ratio of earnings (as defined) to combined fixed charges and preferred stock dividends [line 3 divided by (line 2 + line 4)] 4.15 2.10 2.55 2.66 3.59
(a) The parent Corporation ratios include the accounts of Mellon Financial Corporation (the "Corporation") and Mellon Funding Corporation, a wholly owned subsidiary of the Corporation that functions as a financing entity for the Corporation and its subsidiaries by issuing commercial paper and other debt guaranteed by the Corporation, and Mellon Capital I and Mellon Capital II, special purpose business trusts formed by the Corporation, that exist solely to issue capital securities. Because these ratios exclude from earnings the equity in undistributed net income (loss) of subsidiaries, these ratios vary with the payment of dividends by such subsidiaries. (b) Preferred stock dividend requirements for all years presented represent the pretax amounts required to cover preferred stock dividends. EX-12.2 8 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 Exhibit 12.2 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Mellon Financial Corporation and its subsidiaries
Year ended December 31, ---------------------------------------- (dollar amounts in millions) 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- 1. Income before impact of accounting change $ 948(a) $ 870 $ 771 $ 733 $ 691 2. Provision for income taxes 544 470 398 418 401 ------ ------ ------ ------ ------ 3. Income before provision for income taxes and impact of accounting change(line 1 + line 2) $1,492 $1,340 $1,169 $1,151 $1,092 ------ ------ ------ ------ ------ 4. Fixed charges: a. Interest expense (excluding interest on deposits) $ 458 $ 441 $ 371 $ 358 $ 401 b. One-third of rental expense net of income from subleases, trust-preferred securities expense and amortization of debt issuance costs 132 134 127 45 44 ------ ------ ------ ------ ------ c. Total fixed charges (excluding interest on deposits) (line 4a + line 590 575 498 403 445 4b) d. Interest on deposits 871 960 878 903 889 ------ ------ ------ ------ ------ e. Total fixed charges (line 4c + line 4d) $1,461 $1,535 $1,376 $1,306 $1,334 ------ ------ ------ ------ ------ 5. Preferred stock dividend requirements (b) $ -- $ 13 $ 32 $ 69 $ 62 ------ ------ ------ ------ ------ 6. Income before provision for income taxes and impact of accounting change, plus total fixed charges: a. Excluding interest on deposits (line 3 + line 4c) $2,082 $1,915 $1,667 $1,554 $1,537 ------ ------ ------ ------ ------ b. Including interest on deposits (line 3 + line 4e) $2,953 $2,875 $2,545 $2,457 $2,426 ------ ------ ------ ------ ------ 7. Ratio of earnings (as defined) to fixed charges: a. Excluding interest on deposits (line 6a divided 3.53 (a) 3.33 3.35 3.86 3.45 by line 4c) b. Including interest on deposits (line 6b divided 2.02 (a) 1.87 1.85 1.88 1.82 by line 4e) 8. Ratio of earnings (as defined) to combined fixed charges and preferred stock dividends a. Excluding interest on deposits [line 6a divided by (line 4c + line 5)] 3.53 (a) 3.25 3.15 3.30 3.03 b. Including interest on deposits [line 6b divided by (line 4e + line 5)] 2.02 (a) 1.86 1.81 1.79 1.74
2 (a) The ratio of earnings (as defined) to fixed charges and the ratio of earnings (as defined) to combined fixed charges and preferred stock dividends for 1999 exclude from earnings (as defined) a $127 million pre-tax net gain from divestitures and $56 million pre-tax of nonrecurring expenses. Had these computations included the net gain from divestitures and nonrecurring expenses, the ratio of earnings (as defined) to fixed charges and the ratio of earnings (as defined) to combined fixed charges and preferred stock dividends would have been 3.65 excluding interest on deposits and 2.07 including interest on deposits. (b) Preferred stock dividend requirements for all years presented represent the pretax amounts required to cover preferred stock dividends. EX-23.3 9 CONSENT OF KPMG LLP 1 Exhibit 23.3 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors of Mellon Financial Corporation: We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the Prospectus. KPMG LLP Pittsburgh, Pennsylvania March 24, 2000 EX-24.1 10 POWER OF ATTORNEY 1 Exhibit 24.1 POWER OF ATTORNEY MELLON FINANCIAL CORPORATION Know all men by these presents, that each person whose signature appears below constitutes and appoints Carl Krasik and William E. Marquis, and each of them, such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, (i) to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the registration of up to $1.5 billion aggregate principal amount of senior and/or subordinated debt securities and/or guarantees, and any and all amendments (including post-effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and (ii) to sign and file any and all documents and instruments required by state securities or blue sky laws in connection with the senior and/or subordinated debt securities and/or guarantees covered by the above Registration Statements, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with any of the above, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney shall be effective as of February 15, 2000 and shall continue in full force and effect until revoked by the undersigned in a writing filed with the Secretary of the Corporation. 2 /s/ MARTIN G. McGUINN /s/ GEORGE W. JOHNSTONE - ------------------------------ ------------------------------- Martin G. McGuinn, Director and George W. Johnstone, Director Principal Executive Officer /s/ DWIGHT L. ALLISON, JR. /s/ ROTAN E. LEE - ------------------------------ ------------------------------- Dwight L. Allison, Jr., Director Rotan E. Lee, Director /s/ BURTON C. BORGELT /s/ EDWARD J. McANIFF - ------------------------------ ------------------------------- Burton C. Borgelt, Director Edward J. McAniff, Director /s/ CAROL R. BROWN /s/ ROBERT MEHRABIAN - ------------------------------ ------------------------------- Carol R. Brown, Director Robert Mehrabian, Director /s/ FRANK V. CAHOUET /s/ SEWARD PROSSER MELLON - ------------------------------ ------------------------------- Frank v. Cahouet, Director Seward Prosser Mellon, Director /s/ CHRISTOPHER M. CONDRON /s/ DAVID S. SHAPIRA - ------------------------------ ------------------------------- Christopher M. Condron, Director David S. Shapira, Director /s/ J.W. CONNOLLY /s/ JOAB L. THOMAS - ------------------------------ ------------------------------- J.W. Connolly, Director Joab L. Thomas, Director /s/ CHARLES A. CORRY /s/ WESLEY W. VON SCHACK - ------------------------------ ------------------------------- Charles A. Corry, Director Wesley W. von Schack, Director /s/ IRA J. GUMBERG - ------------------------------ Ira J. Gumberg, Director 3 POWER OF ATTORNEY MELLON FINANCIAL CORPORATION Know all men by these presents, that each person whose signature appears below constitutes and appoints Carl Krasik and William E. Marquis, and each of them, such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the registration of up to $1.5 billion aggregate principal amount of senior and/or subordinated debt securities and/or guarantees, and any and all amendments (including post-effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and (ii) to sign and file any and all documents and instruments required by state securities or blue sky laws in connection with the senior and/or subordinated debt securities and/or guarantees covered by the above Registration Statements, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with any of the above, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney shall be effective as of February 24, 2000 and shall continue in full force and effect until revoked by the undersigned in a writing filed with the Secretary of the Corporation. /s/ JARED L. COHON - -------------------------- Jared L. Cohon, Director 4 POWER OF ATTORNEY MELLON FINANCIAL CORPORATION Know all men by these presents, that each person whose signature appears below constitutes and appoints Carl Krasik and William E. Marquis, and each of them, such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the registration of up to $1.5 billion aggregate principal amount of senior and/or subordinated debt securities and/or guarantees, and any and all amendments (including post-effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and (ii) to sign and file any and all documents and instruments required by state securities or blue sky laws in connection with the senior and/or subordinated debt securities and/or guarantees covered by the above Registration Statements, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with any of the above, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney shall be effective as of March 3, 2000 and shall continue in full force and effect until revoked by the undersigned in a writing filed with the Secretary of the Corporation. /s/ PEMBERTON HUTCHINSON - ----------------------------- Pemberton Hutchinson, Director 5 POWER OF ATTORNEY MELLON FINANCIAL CORPORATION Know all men by these presents, that each person whose signature appears below constitutes and appoints Carl Krasik and William E. Marquis, and each of them, such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the registration of up to $1.5 billion aggregate principal amount of senior and/or subordinated debt securities and/or guarantees, and any and all amendments (including post-effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and (ii) to sign and file any and all documents and instruments required by state securities or blue sky laws in connection with the senior and/or subordinated debt securities and/or guarantees covered by the above Registration Statements, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with any of the above, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney shall be effective as of February 21, 2000 and shall continue in full force and effect until revoked by the undersigned in a writing filed with the Secretary of the Corporation. /s/ MARK A. NORDENBERG - --------------------------- Mark A. Nordenberg, Director 6 POWER OF ATTORNEY MELLON FUNDING CORPORATION Know all men by these presents, that each person whose signature appears below constitutes and appoints Carl Krasik, William E. Marquis and Ann M. Sawchuck, and each of them such person's true and lawful attorney-in-fact and agent, with full power of substitution and revocation, for such person and in such person's name, place and stead, in any and all capacities, to sign one or more Registration Statements pursuant to the Securities Act of 1933, as amended, with respect to the issuance and registration of up to $1.5 billion of debt securities and related guarantees, wherein Mellon Funding Corporation is a registrant, and any and all amendments (including post-effective amendments) thereto, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. WITNESS the due execution hereof by the following persons in the capacities indicated on this 8th day of March 2000. /s/ MICHAEL M. BRYSON /s/ STEVEN G. ELLIOTT - --------------------------- --------------------------- Michael M. Bryson, Director Steven G. Elliott, Director /s/ MICHAEL K. HUGHEY - --------------------------- Michael K. Hughey, Director EX-25.2 11 EXHIBIT 25.2 1 Exhibit 25.2 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 -------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------------------------- BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 31-0838515 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 100 EAST BROAD STREET, COLUMBUS, OHIO 43271-0181 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) BANK ONE TRUST COMPANY, N.A. ONE NORTH STATE STREET, 9TH FLOOR CHICAGO, ILLINOIS 60602 ATTN: SANDRA L. CARUBA, VICE PRESIDENT AND SENIOR COUNSEL, (312) 336-9436 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ============================= MELLON FUNDING CORPORATION MELLON FINANCIAL CORPORATION (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) 25-1387025 25-1233834 (I.R.S. EMPLOYER (I.R.S. EMPLOYER IDENTIFICATION NUMBER) IDENTIFICATION NUMBER) PENNSYLVANIA PENNSYLVANIA (STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) OF INCORPORATION OR ORGANIZATION) ONE MELLON CENTER 500 GRANT STREET PITTSBURGH, PENNSYLVANIA 15258-0001 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) SUBORDINATED DEBT SECURITIES (TITLE OF INDENTURE SECURITIES) 2 ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C. (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect. 2. A copy of the certificate of authority of the trustee to commence business. 3. A copy of the authorization of the trustee to exercise corporate trust powers. 4. A copy of the existing by-laws of the trustee. 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 3 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bank One Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 15th day of March, 2000. BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, TRUSTEE BY /s/ SANDRA L. CARUBA ----------------------- SANDRA L. CARUBA VICE PRESIDENT 4 EXHIBIT 1 A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE NOW IN EFFECT AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION. SECOND. The main office of the Association shall be in the City of Columbus, County of Franklin, State of Ohio. The business of the Association will be limited to the fiduciary powers and the support of activities incidental to the exercise of those powers. The Association will not expand or alter its business beyond that stated in this article without the prior approval of the Comptroller of the Currency. THIRD. The Board of Directors of this Association shall consist of not less than five nor more than twenty-five persons, the exact number to be fixed and determined from time to time by resolution of a majority of the full Board of Directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the Association, or of a holding company owning the Association, with an aggregate par, fair market or equity value of not less than $1,000, as of either (i) the date of purchase, (ii) the date the person became a director, or (iii) the date of that person's most recent election to the Board of Directors, whichever is more recent. Any combination of common or preferred stock of the Association or holding company may be used. Any vacancy in the Board of Directors may be filled by action of a majority of the remaining directors between meetings of shareholders. The Board of Directors may not increase the number of directors between meetings of shareholders to a number which: (1) exceeds by more than two the number of directors last elected by shareholders where the number was 15 or less; or (2) exceeds by more than four the number of directors last elected by shareholders where the number was 16 or more, but in no event shall the number of directors exceed 25. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director's term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated. Honorary or advisory members of the Board of Directors, without voting power or power of final decision in matters concerning the business of the Association, may be appointed by resolution of a majority of the full Board of Directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory directors shall not be counted to 5 determine the number of directors of the Association or the presence of a quorum in connection with any board action, and shall not be required to own qualifying shares. FOURTH. There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the Board of Directors may designate, on the day of each year specified therefor in the Bylaws or, if that day falls on a legal holiday in the state in which the Association is located, on the next following banking day. If no election is held on the day fixed or in the event of a legal holiday on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the Board of Directors or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. In all cases at least 10 days advance notice of the meeting shall be given to the shareholders by first class mail. In all elections of directors, the number of votes each common shareholder may cast will be determined by multiplying the number of shares such shareholder owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held by such shareholder. If the issuance of preferred stock with voting rights has been authorized by a vote of shareholders owning a majority of the common stock of the association, preferred shareholders will have cumulative voting rights and will be included within the same class as common shareholders, for purposes of elections of directors. A director may resign at any time by delivering written notice to the Board of Directors, its chairperson, or to the Association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. A director may be removed by shareholders at a meeting called to remove him or her, when notice of the meeting stating that the purpose or one of the purposes is to remove him or her is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause, provided, however, that a director may not be removed if the number of votes sufficient to elect him or her under cumulative voting is voted against his or her removal. FIFTH. The authorized amount of capital stock of this Association shall be eighty thousand shares of common stock of the par value of ten dollars ($10.00) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States. No holder of shares of the capital stock of any class of the Association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the Association, whether now or hereafter authorized, or to any obligations convertible into stock of the Association, issued or sold, nor any right of subscription to any thereof other than such, if any, as the Board of Directors, in its discretion, may from time to time determine and at such price as the Board of Directors may from time to time fix. Unless otherwise specified in the Articles of Association or required by law, (1) all matters requiring shareholder action, including amendments to the Articles of Association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share. 6 Unless otherwise specified in the Articles of Association or required by law, all shares of voting stock shall be voted together as a class on any matters requiring shareholder approval. If a proposed amendment would affect two or more classes or series in the same or a substantially similar way, all the classes or series so affected must vote together as a single voting group on the proposed amendment. Shares of the same class or series may be issued as a dividend on a pro rata basis and without consideration. Shares of another class or series may be issued as share dividends in respect of a class or series of stock if approved by a majority of the votes entitled to be cast by the class or series to be issued unless there are no outstanding shares of the class or series to be issued. Unless otherwise provided by the Board of Directors, the record date for determining shareholders entitled to a share dividend shall be the date the Board of Directors authorizes the share dividend. Unless otherwise provided in the Bylaws, the record date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting. If a shareholder is entitled to fractional shares pursuant to preemptive rights, a stock dividend, consolidation or merger, reverse stock split or otherwise, the Association may: (a) issue fractional shares or; (b) in lieu of the issuance of fractional shares, issue script or warrants entitling the holder to receive a full share upon surrendering enough script or warrants to equal a full share; (c) if there is an established and active market in the Association's stock, make reasonable arrangements to provide the shareholder with an opportunity to realize a fair price through sale of the fraction, or purchase of the additional fraction required for a full share; (d) remit the cash equivalent of the fraction to the shareholder; or (e) sell full shares representing all the fractions at public auction or to the highest bidder after having solicited and received sealed bids from at least three licensed stock brokers, and distribute the proceeds pro rata to shareholders who otherwise would be entitled to the fractional shares. The holder of a fractional share is entitled to exercise the rights for shareholder, including the right to vote, to receive dividends, and to participate in the assets of the Association upon liquidation, in proportion to the fractional interest. The holder of script or warrants is not entitled to any of these rights unless the script or warrants explicitly provide for such rights. The script or warrants may be subject to such additional conditions as: (1) that the script or warrants will become void if not exchanged for full shares before a specified date; and (2) that the shares for which the script or warrants are exchangeable may be sold at the option of the Association and the proceeds paid to scriptholders. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. Obligations classified as debt, whether or not subordinated, which may be issued by the Association without the approval of shareholders, do not carry voting rights on any issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part of securities into securities of another class or series. SIXTH. The Board of Directors shall appoint one of its members president of this Association, and one of its members chairperson of the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors' and shareholders' meetings and be responsible for authenticating the records of the Association, and such other officers and employees as may be required to transact 7 the business of this Association. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the Board of Directors in accordance with the Bylaws. The Board of Directors shall have the power to: (1) Define the duties of the officers, employees, and agents of the Association. (2) Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the Association. (3) Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law. (4) Dismiss officers and employees. (5) Require bonds from officers and employees and to fix the penalty thereof. (6) Ratify written policies authorized by the Association's management or committees of the board. (7) Regulate the manner in which any increase or decrease of the capital of the Association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the association in accordance with law, and nothing shall raise or lower from two-thirds the percentage for shareholder approval to increase or reduce the capital. (8) Manage and administer the business and affairs of the Association. (9) Adopt initial Bylaws, not inconsistent with law or the Articles of Association, for managing the business and regulating the affairs of the Association. (10) Amend or repeal Bylaws, except to the extent that the Articles of Association reserve this power in whole or in part to shareholders. (11) Make contracts. (12) Generally perform all acts that are legal for a Board of Directors to perform. SEVENTH. The Board of Directors shall have the power to change the location of the main office of this Association to any other place within the limits of the City of Columbus, State of Ohio, without the approval of the shareholders; and shall have the power to change the location of the main office of this Association to any other place outside the limits of the City of Columbus, State of Ohio, but not more than thirty miles beyond such limits, with the affirmative vote of shareholders owning two-thirds of the stock of the Association, subject to receipt of a certificate of approval from the Comptroller of the Currency. The Board of Directors shall have the power to establish or change the location of any branch or branches of the Association to any other location permitted under applicable law without the approval of the shareholders, subject to approval by the Office of the Comptroller of the Currency. The Board of Directors shall have the power to establish or change the location of any nonbranch office or facility of the Association without the approval of the shareholders. EIGHTH. The corporate existence of this Association shall continue until termination according to the laws of the United States. 8 NINTH. The Board of Directors of this Association, or any shareholders owning, in the aggregate, not less than 20 percent of the stock of this Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the Bylaws or the laws of the United States, or waived by shareholders, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid, mailed at least 10, and no more than 60, days prior to the date of the meeting to each shareholder of record at his/her address as shown upon the books of this Association. Unless otherwise provided by the Bylaws, any action requiring approval of shareholders must be effected at a duly called annual or special meeting. TENTH. The Association shall provide indemnification as set forth below: Every person who is or was a Director, officer or employee of the Association or of any other corporation which he served as a Director, officer or employee at the request of the Association as part of his regularly assigned duties may be indemnified by the Association in accordance with the provisions of this Article against all liability (including, without limitation, judgments, fines, penalties, and settlements) and all reasonable expenses (including, without limitation, attorneys' fees and investigative expenses) that may be incurred or paid by him in connection with any claim, action, suit or proceeding, whether civil, criminal or administrative (all referred to hereafter in this Article as "Claims") or in connection with any appeal relating thereto in which he may become involved as a party or otherwise or with which he may be threatened by reason of his being or having been a Director, officer or employee of the Association or such other corporation, or by reason of any action taken or omitted by him in his capacity as such Director, officer or employee, whether or not he continues to be such at the time such liability or expenses are incurred; provided that nothing contained in this Article shall be construed to permit indemnification of any such person who is adjudged guilty of, or liable for, willful misconduct, gross neglect of duty or criminal acts, unless, at the time such indemnification is sought, such indemnification in such instance is permissible under applicable law and regulations, including published rulings of the Comptroller of the Currency or other appropriate supervisory or regulatory authority; and provided further that there shall be no indemnification of Directors, officers, or employees against expenses, penalties, or other payments incurred in an administrative proceeding or action instituted by an appropriate regulatory agency which proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by an individual or individuals in the form of payments to the Association. Every person who may be indemnified under the provisions of this Article and who has been wholly successful on the merits with respect to any Claim shall be entitled to indemnification as of right. Except as provided in the preceding sentence, any indemnification under this Article shall be at the sole discretion of the Board of Directors and shall be made only if the Board of Directors or the Executive Committee acting by a quorum consisting of Directors who are not parties to such Claim shall find or if independent legal counsel (who may be the regular counsel of the Association) selected by the Board of Directors or Executive Committee whether or not a disinterested quorum exists shall render their opinion that in view of all of the circumstances then surrounding the Claim, such indemnification is equitable and in the best interests of the Association. Among the circumstances to be taken into consideration in arriving at such a finding or opinion is the existence or non-existence of a contract of insurance or indemnity under which the Association would be wholly or partially reimbursed for such indemnification, but the existence or non-existence of such insurance is not the sole circumstance to be considered nor shall it be wholly determinative of whether such indemnification shall be 9 made. In addition to such finding or opinion, no indemnification under this Article shall be made unless the Board of Directors or the Executive Committee acting by a quorum consisting of Directors who are not parties to such Claim shall find or if independent legal counsel (who may be the regular counsel of the Association) selected by the Board of Directors or Executive Committee whether or not a disinterested quorum exists shall render their opinion that the Directors, officer or employee acted in good faith in what he reasonably believed to be the best interests of the Association or such other corporation and further in the case of any criminal action or proceeding, that the Director, officer or employee reasonably believed his conduct to be lawful. Determination of any Claim by judgment adverse to a Director, officer or employee by settlement with or without Court approval or conviction upon a plea of guilty or of nolo contendere or its equivalent shall not create a presumption that a Director, officer or employee failed to meet the standards of conduct set forth in this Article. Expenses incurred with respect to any Claim may be advanced by the Association prior to the final disposition thereof upon receipt of an undertaking satisfactory to the Association by or on behalf of the recipient to repay such amount unless it is ultimately determined that he is entitled to indemnification under this Article. The rights of indemnification provided in this Article shall be in addition to any rights to which any Director, officer or employee may otherwise be entitled by contract or as a matter of law. Every person who shall act as a Director, officer or employee of this Association shall be conclusively presumed to be doing so in reliance upon the right of indemnification provided for in this Article. ELEVENTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The Association's Board of Directors may propose one or more amendments to the Articles of Association for submission to the shareholders. 10 EXHIBIT 2 A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE BUSINESS CERTIFICATE I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that: 1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and control of all records pertaining to the chartering of all National Banking Associations. 2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No. 16235) is a National Banking Association formed under the laws of the United States and is authorized thereunder to transact the business of banking on the date of this Certificate. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the Treasury Department in the City of Washington and District of Columbia, this 15th day of September, 1999. /s/ John D. Hawke, Jr. --------------------------- Comptroller of the Currency 11 EXHIBIT 3 A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST POWERS CERTIFICATE I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that: 1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and control of all records pertaining to the chartering of all National Banking Associations. 2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No. 16235) was granted, under the hand and seal of the Comptroller, the right to act in all fiduciary capacities authorized under the provisions of the Act of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the authority so granted remains in full force and effect on the date of this Certificate. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the Treasury Department in the City of Washington and District of Columbia, this 15th day of September, 1999. /s/ John D. Hawke, Jr. --------------------------- Comptroller of the Currency 12 EXHIBIT 4 A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION BY-LAWS ARTICLE I MEETINGS OF SHAREHOLDERS SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders of the Bank for the election of Directors and for the transaction of such business as may properly come before the meeting shall be held at its main office, or other convenient place duly authorized by the Board of Directors, on the same day upon which any regular or special Board meeting is held from and including the first Monday of January to, and including, the fourth Monday of February of each year, or on the next succeeding banking day, if the day fixed falls on a legal holiday. If from any cause, an election of Directors is not made on the day fixed for the regular meeting of the shareholders or, in the event of a legal holiday, on the next succeeding banking day, the Board of Directors shall order the election to be held on some subsequent day, as soon thereafter as practicable, according to the provisions of law; and notice thereof shall be given in the manner herein provided for the annual meeting. Notice of such annual meeting shall be given by or under the direction of the Secretary, or such other officer as may be designated by the Chief Executive Officer, by first-class mail, postage prepaid, to all shareholders of record of the Bank at their respective addresses as shown upon the books of the Bank mailed not less than ten days prior to the date fixed for such meeting. SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the Bank may be called at any time by the Board of Directors or by any three or more shareholders owning, in the aggregate, not less than ten percent of the stock of the Bank. Notice of any special meeting of the shareholders called by the Board of Directors, stating the time, place and purpose of the meeting, shall be given by or under the direction of the Secretary, or such other officer as is designated by the Chief Executive Officer, by first-class mail, postage prepaid, to all shareholders of record of the Bank at their respective addresses as shown upon the books of the Bank mailed not less than ten days prior to the date fixed for such meeting. Any special meeting of shareholders shall be conducted and its proceedings recorded in the manner prescribed in these By-Laws for annual meetings of shareholders. SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors may designate a person to be the secretary of the meeting of shareholders. In the absence of a presiding officer, as designated by these By-Laws, the Board of Directors may designate a person to act as the presiding officer. In the event the Board of Directors fails to designate a person to preside at a meeting of shareholders and a secretary of such meeting, the shareholders present or represented shall elect a person to preside and a person to serve as secretary of the meeting. The secretary of the meeting of shareholders shall cause the returns made by the judges of election and other proceedings to be recorded in the minute books of the Bank. The presiding officer shall notify the Directors-elect of their election and to meet forthwith for the organization of the new Board of Directors. The minutes of the meeting shall be signed by the presiding officer and the secretary designated for the meeting. SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as three shareholders to be judges of the election, who shall hold and conduct the same, and who shall, after the election has been held, notify, in writing over their signatures, the secretary of the meeting of shareholders of the result thereof and the names of the Directors elected; provided, however, that upon failure for any reason of any judge or judges of election, so appointed by the Directors, to serve, the presiding officer of the meeting shall appoint other shareholders or their proxies to fill the vacancies. The judges of election, at the request of the chairman of the meeting, shall act as tellers of any other 13 vote by ballot taken at such meeting, and shall notify, in writing over their signature, the secretary of the Board of Directors of the result thereof. SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of record, who is qualified to vote under the provisions of Federal Law, shall have the right to vote the number of shares of record in such shareholder's name for as many persons as there are Directors to be elected, or to cumulate such shares as provided by Federal Law. In deciding all other questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock of record in such shareholder's name. Shareholders may vote by proxy duly authorized in writing. All proxies used at the annual meeting shall be secured for that meeting only, or any adjournment thereof, and shall be dated, if not dated by the shareholder, as of the date of the receipt thereof. No officer or employee of this Bank may act as proxy. SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the capital stock of the Bank, eligible to be voted, present either in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of shareholders, but shareholders present at any meeting and constituting less than a quorum may, without further notice, adjourn the meeting from time to time until a quorum is obtained. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association. ARTICLE II DIRECTORS SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications prescribed by law. No person elected as a Director may exercise any of the powers of office until such Director has taken the oath of such office. SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year or until their successors are elected and qualified. Any vacancy in the Board shall be filled by appointment of the remaining Directors, and any Director so appointed shall hold office until the next election. SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders shall meet for organization of the new Board of Directors at the time and place fixed by the presiding officer of the annual meeting. If at the time fixed for such meeting there is no quorum present, the Directors in attendance may adjourn from time to time until a quorum is obtained. A majority of the number of Directors elected by the shareholders shall constitute a quorum for the transaction of business. SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of Directors shall be held at such date, time and place as the Board may previously designate, or should the Board fail to so designate, at such date, time and place as the Chairman of the Board, Chief Executive Officer, or President may fix. Whenever a quorum is not present, the Directors in attendance shall adjourn the meeting to a time not later than the date fixed by the By-Laws for the next succeeding regular meeting of the Board. Members of the Board of Directors may participate in such meetings through use of conference telephone or 14 similar communications equipment, so long as all members participating in such meetings can hear one another. SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held at the call of the Chairman of the Board, Chief Executive Officer, or President, or at the request of two or more Directors. Any special meeting may be held at such place and at such time as may be fixed in the call. Written or oral notice shall be given to each Director not later than the day next preceding the day on which the special meeting is to be held, which notice may be waived in writing. The presence of a Director at any meeting of the Board of Directors shall be deemed a waiver of notice thereof by such Director. Whenever a quorum is not present, the Directors in attendance shall adjourn the special meeting from day to day until a quorum is obtained. Members of the Board of Directors may participate in such meetings through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another. SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum at any meeting, except when otherwise provided by law; but a lesser number may adjourn any meeting, from time-to-time, and the meeting may be held, as adjourned, without further notice. When, however, less than a quorum as herein defined, but at least one-third and not less than two of the authorized number of Directors are present at a meeting of the Directors, business of the Bank may be transacted and matters before the Board approved or disapproved by the unanimous vote of the Directors present. SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall receive such fees for attendance at Board and Board committee meetings and such fees for service as a Director, irrespective of meeting attendance, as from time to time are fixed by resolution of the Board; provided, however, that payment hereunder shall not be made to a Director for meetings attended and/or Board service which are not for the Bank's sole benefit and which are concurrent and duplicative with meetings attended or Board service for an affiliate of the Bank for which the Director receives payment; and provided further that fees hereunder shall not be paid in the case of any Director in the regular employment of the Bank or of one of its affiliates. Each member of the Board of Directors, whether or not such Director is in the regular employment of the Bank or of one of its affiliates, shall be reimbursed for travel expenses incident to attendance at Board and Board committee meetings. SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the Board of Directors known as the Executive Committee which shall possess and exercise, when the Board is not in session, all the powers of the Board that may lawfully be delegated. The Executive Committee shall consist of at least three Board members, one of whom shall be the Chairman of the Board, Chief Executive Officer or the President. The other members of the Executive Committee shall be appointed by the Chairman of the Board, the Chief Executive Officer, or the President, with the approval of the Board, and who shall continue as members of the Executive Committee until their successors are appointed, provided, however, that any member of the Executive Committee may be removed by the Board upon a majority vote thereof at any regular or special meeting of the Board. The Chairman, Chief Executive Officer, or President shall fill any vacancy in the Executive Committee by the appointment of another Director, subject to the approval of the Board of Directors. The Executive Committee shall meet at the call of the Chairman, 15 Chief Executive Officer, or President or any two members thereof at such time or times and place as may be designated. In the event of the absence of any member or members of the Executive Committee, the presiding member may appoint a member or members of the Board to fill the place or places of such absent member or members to serve during such absence. Two members of the Executive Committee shall constitute a quorum. When neither the Chairman of the Board, the Chief Executive Officer, nor President are present, the Executive Committee shall appoint a presiding officer. The Executive Committee shall report its proceedings and the action taken by it to the Board of Directors. SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such special committees from time to time as are in its judgment necessary in the interest of the Bank. ARTICLE III OFFICERS, MANAGEMENT STAFF AND EMPLOYEES SECTION 3.01. OFFICERS AND MANAGEMENT STAFF. (a) The executive officers of the Bank shall include a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary, Security Officer, and may include one or more Senior Managing Directors or Managing Directors. The Chairman of the Board, Chief Executive Officer, President, any Senior Managing Director, any Managing Director, Chief Financial Officer, Secretary, and Security Officer shall be elected by the Board. The Chairman of the Board, Chief Executive Officer, and the President shall be elected by the Board from their own number. Such officers as the Board shall elect from their own number shall hold office from the date of their election as officers until the organization meeting of the Board of Directors following the next annual meeting of shareholders, provided, however, that such officers may be relieved of their duties at any time by action of the Board of Directors, in which event all the powers incident to their office shall immediately terminate. The Chairman of the Board, Chief Executive Officer, or the President shall preside at all meetings of shareholders and meetings of the Board of Directors. (b) The management staff of the Bank shall include officers elected by the Board, officers appointed by the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, the Chief Financial Officer, and such other persons in the employment of the Bank who, pursuant to authorization by a duly authorized officer of the Bank, perform management functions and have management responsibilities. Any two or more offices may be held by the same person except that no person shall hold the office of Chairman of the Board, Chief Executive Officer and/or President and at the same time also hold the office of Secretary. (c) Except as provided in the case of the elected officers who are members of the Board, all officers and employees, whether elected or appointed, shall hold office at the pleasure of the Board. Except as otherwise limited by law or these By-Laws, the Board assigns to the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, the Chief Financial Officer, and/or each of their respective designees the authority to control all personnel, including elected and appointed officers and employees of the Bank, to employ or direct the employment of such officers and employees as he or she may deem necessary, including the fixing of salaries and the dismissal of such officers and employees at pleasure, and to define and prescribe the duties 16 and responsibilities of all officers and employees of the Bank, subject to such further limitations and directions as he or she may from time to time deem appropriate. (d) The Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, the Chief Financial Officer, and any other officer of the Bank, to the extent that such officer is authorized in writing by the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, or the Chief Financial Officer may appoint persons other than officers who are in employment of the Bank to serve in management positions and in connection therewith, the appointing officer may assign such title, salary, responsibilities and functions as are deemed appropriate, provided, however, that nothing contained herein shall be construed as placing any limitation on the authority of the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, or the Chief Financial Officer as provided in this and other sections of these By-Laws. (e) The Senior Managing Directors and the Managing Directors of the Bank shall have general and active authority over the management of the business of the Bank, shall see that all orders and resolutions of the Board of Directors are carried into effect, and shall do or cause to be done all things necessary or proper to carry on the business of the Bank in accordance with provisions of applicable law and regulations. Each Senior Managing Director and Managing Director shall perform all duties incident to his or her office and such other and further duties, as may from time to time be required by the Chief Executive Officer, the President, the Board of Directors, or the shareholders. The specification of authority in these By-Laws wherever and to whomever granted shall not be construed to limit in any manner the general powers of delegation granted to a Senior Managing Director or a Managing Director in conducting the business of the Bank. In the absence of a Senior Managing Director or a Managing Director, such officer as is designated by the Senior Managing Director or the Managing Director shall be vested with all the powers and perform all the duties of the Senior Managing Director or the Managing Director as defined by these By-Laws. (f) Each Managing Director who is assigned oversight of one or more trust service offices shall appoint a management committee known as the Investment Management and Trust Committee consisting of the Managing Director of the trust service offices and at least three other members who shall be capable and experienced officers of the Bank appointed from time to time by the Managing Director and who shall continue as members of the Investment Management and Trust Committee until their successors are appointed, provided, however, that any member of the Investment Management and Trust Committee may be removed by the Managing Director as provided in this and other sections of these By-Laws. The Managing Director shall fill any vacancy in the Investment Management and Trust Committee by the appointment of another capable and experienced officer of the Bank. Each Investment Management and Trust Committee shall meet at such date, time and place as the Managing Director shall fix. In the event of the absence of any member or members of the Investment Management and Trust Committee, the Managing Director may, in his or her discretion, appoint another officer of the Bank to fill the place or places of such absent member or members to serve during such absence. A majority of each Investment Management and Trust Committee shall constitute a quorum. Each Investment Management and Trust Committee shall carry out the policies of the Bank, as adopted by the Board of Directors, which shall be formulated and executed in accordance with State and Federal Law, Regulations of the Comptroller of the Currency, and sound fiduciary 17 principles. In carrying out the policies of the Bank, each Investment Management and Trust Committee is hereby authorized to establish management teams whose duties and responsibilities shall be specifically set forth in the policies of the Bank. Each such management team shall report such proceedings and the actions taken thereby to the Investment Management and Trust Committee. Each Managing Director shall then report such proceedings and the actions taken thereby to the Board of Directors. SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the fiduciary powers granted to this Bank under the provisions of Federal Law and Regulations of the Comptroller of the Currency, the Chairman of the Board, the Chief Executive Officer, the President, the Senior Managing Directors, the Managing Directors, the Chief Financial Officer, and those officers so designated and authorized by the Chairman of the Board, the Chief Executive Officer, the President, the Senior Managing Directors, the Managing Directors, or the Chief Financial Officer are authorized for and on behalf of the Bank, and to the extent permitted by law, to make loans and discounts; to purchase or acquire drafts, notes, stocks, bonds, and other securities for investment of funds held by the Bank; to execute and purchase acceptances; to appoint, empower and direct all necessary agents and attorneys; to sign and give any notice required to be given; to demand payment and/or to declare due for any default any debt or obligation due or payable to the Bank upon demand or authorized to be declared due; to foreclose any mortgages; to exercise any option, privilege or election to forfeit, terminate, extend or renew any lease; to authorize and direct any proceedings for the collection of any money or for the enforcement of any right or obligation; to adjust, settle and compromise all claims of every kind and description in favor of or against the Bank, and to give receipts, releases and discharges therefor; to borrow money and in connection therewith to make, execute and deliver notes, bonds or other evidences of indebtedness; to pledge or hypothecate any securities or any stocks, bonds, notes or any property real or personal held or owned by the Bank, or to rediscount any notes or other obligations held or owned by the Bank, whenever in his or her judgment it is reasonably necessary for the operation of the Bank; and in furtherance of and in addition to the powers hereinabove set forth to do all such acts and to take all such proceedings as in his or her judgment are necessary and incidental to the operation of the Bank. SECTION 3.03. SECRETARY. The Secretary or such other officers as may be designated by the Chief Executive Officer shall have supervision and control of the records of the Bank and, subject to the direction of the Chief Executive Officer, shall undertake other duties and functions usually performed by a corporate secretary. Other officers may be designated by the Secretary as Assistant Secretary to perform the duties of the Secretary. SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management staff or any employee of the Bank designated as an officer on the Bank's payroll system is hereby authorized for and on behalf of the Bank to sell, assign, lease, mortgage, transfer, deliver and convey any real or personal property, including shares of stock, bonds, notes, certificates of indebtedness (including the assignment and redemption of registered United States obligations) and all other forms of intangible property now or hereafter owned by or standing in the name of the Bank, or its nominee, or held by the Bank as collateral security, or standing in the name of the Bank, or its nominee, in any fiduciary capacity or in the name of any principal for whom this Bank may now or hereafter be acting under a power of attorney or as agent, and to execute and deliver such partial releases from any discharges or assignments of mortgages and assignments or surrender of insurance policies, deeds, 18 contracts, assignments or other papers or documents as may be appropriate in the circumstances now or hereafter held by the Bank in its own name, in a fiduciary capacity, or owned by any principal for whom this Bank may now or hereafter be acting under a power of attorney or as agent; provided, however, that, when necessary, the signature of any such person shall be attested or witnessed in each case by another officer of the Bank. Any member of the Bank's management staff or any employee of the Bank designated as an officer on the Bank's payroll system is hereby authorized for and on behalf of the Bank to execute any indemnity and fidelity bonds, trust agreements, proxies or other papers or documents of like or different character necessary, desirable or incidental to the appointment of the Bank in any fiduciary capacity, the conduct of its business in any fiduciary capacity, or the conduct of its other banking business; to sign and issue checks, drafts, orders for the payment of money and certificates of deposit; to sign and endorse bills of exchange, to sign and countersign foreign and domestic letters of credit, to receive and receipt for payments of principal, interest, dividends, rents, fees and payments of every kind and description paid to the Bank, to sign receipts for money or other property acquired by or entrusted to the Bank, to guarantee the genuineness of signatures on assignments of stocks, bonds or other securities, to sign certifications of checks, to endorse and deliver checks, drafts, warrants, bills, notes, certificates of deposit and acceptances in all business transactions of the Bank; also to foreclose any mortgage, to execute and deliver receipts for any money or property; also to sign stock certificates for and on behalf of this Bank as transfer agent or registrar, and to authenticate bonds, debentures, land or lease trust certificates or other forms of security issued pursuant to any indenture under which this Bank now or hereafter is acting as trustee or in any other fiduciary capacity; to execute and deliver various forms of documents or agreements necessary to effectuate certain investment strategies for various fiduciary or custody customers of the Bank, including, without limitation, exchange funds, options, both listed and over-the-counter, commodities trading, futures trading, hedge funds, limited partnerships, venture capital funds, swap or collar transactions and other similar investment vehicles for which the Bank now or in the future may deem appropriate for investment of fiduciary customers or in which non-fiduciary customers may direct investment by the Bank. Without limitation on the foregoing, the Chief Executive Officer, Chairman of the Board, or President of the Bank shall have the authority from time to time to appoint officers of the Bank as Vice President for the sole purpose of executing releases or other documents incidental to the conduct of the Bank's business in any fiduciary capacity where required by state law or the governing document. In addition, other persons in the employment of the Bank or its affiliates may be authorized by the Chief Executive Officer, Chairman of the Board, President, Senior Managing Directors, Managing Directors, or Chief Financial Officer to perform acts and to execute the documents described in the paragraph above, subject, however, to such limitations and conditions as are contained in the authorization given to such person. SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall be bonded for the honest and faithful performance of their duties for such amount as may be prescribed by the Board of Directors. 19 ARTICLE IV STOCKS AND STOCK CERTIFICATES SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be evidenced by certificates which shall bear the signature of the Chairman of the Board, the Chief Executive Officer, or the President (which signature may be engraved, printed or impressed), and shall be signed manually by the Secretary, or any other officer appointed by the Chief Executive Officer for that purpose. In case any such officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Bank with the same effect as if such officer had not ceased to be such at the time of its issue. Each such certificate shall bear the corporate seal of the Bank, shall recite on its face that stock represented thereby is transferable only upon the books of the Bank when properly endorsed and shall recite such other information as is required by law and deemed appropriate by the Board. The corporate seal may be facsimile engraved or printed. SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be transferable only upon the stock transfer books of the Bank and, except as hereinafter provided, no transfer shall be made or new certificates issued except upon the surrender for cancellation of the certificate or certificates previously issued therefor. In the case of the loss, theft, or destruction of any certificate, a new certificate may be issued in place of such certificate upon the furnishing of an affidavit setting forth the circumstances of such loss, theft, or destruction and indemnity satisfactory to the Chairman of the Board, the Chief Executive Officer, or the President. The Board of Directors or the Chairman of the Board, Chief Executive Officer, or the President may authorize the issuance of a new certificate therefor without the furnishing of indemnity. Stock transfer books, in which all transfers of stock shall be recorded, shall be provided. The stock transfer books may be closed for a reasonable period and under such conditions as the Board of Directors may at any time determine, for any meeting of shareholders, the payment of dividends or any other lawful purpose. In lieu of closing the transfer books, the Board of Directors may, in its discretion, fix a record date and hour constituting a reasonable period prior to the day designated for the holding of any meeting of the shareholders or the day appointed for the payment of any dividend, or for any other purpose at the time as of which shareholders entitled to notice of and to vote at any such meeting or to receive such dividend or to be treated as shareholders for such other purpose shall be determined, and only shareholders of record at such time shall be entitled to notice of or to vote at such meeting or to receive such dividends or to be treated as shareholders for such other purpose. ARTICLE V MISCELLANEOUS PROVISIONS SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with "SEAL" in the center, and the name "BANK ONE TRUST COMPANY, NA" located clockwise around the upper half of the seal. SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles of Association, the returns of judges of elections, the By-Laws and any amendments thereto, the proceedings of all regular and special meetings of the shareholders and of the Board of Directors, and reports of the committees of the Board of Directors shall be recorded in the minute books of the Bank. The minutes of each such meeting shall be signed by the presiding officer and attested by the secretary of the meeting. 20 SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall continue until terminated in accordance with the laws of the United States. The purpose of the Bank shall be to carry on the general business of a commercial bank trust department and to engage in such activities as are necessary, incident, or related to such business. The Articles of Association of the Bank shall not be amended, or any other provision added elsewhere in the Articles expanding the powers of the Bank, without the prior approval of the Comptroller of the Currency. SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or repealed, at any regular or special meeting of the Board of Directors, by a vote of a majority of the Directors. As amended April 24, 1991 Section 3.01 (Officers and Management Staff) Section 3.02 (Chief Executive Officer) Section 3.03 (Powers and Duties of Officers and Management Staff) Section 3.05 (Execution of Documents) As amended January 27, 1995 Section 2.04 (Regular Meetings) Section 2.05 (Special Meetings) Section 3.01(f) (Officers and Management Staff) Section 3.03(e) (Powers and Duties of Officers and Management Staff) Section 5.01 (Seal) Amended and restated in its entirety effective May 1, 1996 As amended August 1, 1996 Section 2.09 (Trust Examining Committee) Section 2.10 (Other Committees) As amended October 16, 1997 Section 3.01 (Officers and Management Staff) Section 3.02 (Powers and Duties of Officers and Management Staff) Section 3.04 (Execution of Documents) As amended January 1, 1998 Section 1.01 (Annual Meeting) 21 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT March 24, 2000 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of an indenture among Mellon Funding Corporation, Mellon Financial Corporation and Bank One Trust Company, National Association, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION BY: /S/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT 22 EXHIBIT 7 Legal Title of Bank: Bank One Trust Company, NA Address: 100 Broad Street City, State Zip: Columbus, OH 43271 FDIC Certificate No.: 0/3/6/1/8 --------- Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 032 Page RC-1 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1998 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
DOLLAR AMOUNTS IN THOUSANDS --------------------------- RCON BIL MIL THOU C300 ---- ------------ ---- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin(1) ............................ 0081 159,911 1.a b. Interest-bearing balances(2)...................................................... 0071 16,874 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) ........................ 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)............ ......... 1773 7,403 2.b 3. Federal funds sold and securities purchased under agreements to resell .............. 1350 576,473 3. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C)........... ......... 2122 32,603 4.a b. LESS: Allowance for loan and lease losses......................................... 3123 10 4.b c. LESS: Allocated transfer risk reserve............................................. 3128 0 4.c d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c).............................................. 2125 32,593 4.d 5. Trading assets (from Schedule RD-D).................................................. 3545 0 5. 6. Premises and fixed assets (including capitalized leases) ............................ 2145 18,685 6. 7. Other real estate owned (from Schedule RC-M) ........................................ 2150 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)....................................................... 2130 0 8. 9. Customers' liability to this bank on acceptances outstanding ........................ 2155 0 9. 10. Intangible assets (from Schedule RC-M)............................................... 2143 31,392 10. 11. Other assets (from Schedule RC-F).................................................... 2160 127,322 11. 12. Total assets (sum of items 1 through 11)............................................. 2170 970,653 12.
(1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 23 EXHIBIT 7 Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/99 State #: 391581 FFIEC 032 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1 City, State Zip: Columbus, OH 43271 Transit #: 04400003
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1999 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
DOLLAR AMOUNTS IN THOUSANDS C300 RCON BIL MIL THOU ---- ---- ------------ ASSETS RCON 1. Cash and balances due from depository institutions (from Schedule RC-A): ---- a. Noninterest-bearing balances and currency and coin(1).................... 0081 123,692 1.a b. Interest-bearing balances(2)............................................. 0071 17,687 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 5,860 2.b 3. Federal funds sold and securities purchased under agreements to resell...... 1350 364,813 3. 4. Loans and lease financing receivables: RCON ---- a. Loans and leases, net of unearned income (from Schedule RC-C)............ 2122 58,020 4.a b. LESS: Allowance for loan and lease losses................................ 3123 10 4.b c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c RCON d. Loans and leases, net of unearned income, allowance, and ---- reserve (item 4.a minus 4.b and 4.c)..................................... 2125 58,010 4.d 5. Trading assets (from Schedule RD-D)......................................... 3545 0 5. 6. Premises and fixed assets (including capitalized leases).................... 2145 22,547 6. 7. Other real estate owned (from Schedule RC-M) ............................... 2150 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M).............................................. 2130 0 8. 9. Customers' liability to this bank on acceptances outstanding................ 2155 0 9. 10. Intangible assets (from Schedule RC-M)...................................... 2143 27,151 10. 11. Other assets (from Schedule RC-F)........................................... 2160 141,759 11. 12. Total assets (sum of items 1 through 11).................................... 2170 761,519 12.
(1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 24 Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/99 State #: 391581 FFIEC 032 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-2 City, State Zip: Columbus, OH 43271 Transit #: 04400003
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS LIABILITIES 13. Deposits: RCON a. In domestic offices (sum of totals of columns A and C ---- from Schedule RC-E, part 1).............................................. 2200 589,846 13.a (1) Noninterest-bearing(1)............................................... 6631 517,140 13.a1 (2) Interest-bearing..................................................... 6636 72,706 13.a2 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, part II)............................................ (1) Noninterest bearing.................................................. (2) Interest-bearing..................................................... 14. Federal funds purchased and securities sold under agreements to repurchase: ............................................................. RCFD 2800 0 14 15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 0 15.a b. Trading Liabilities(from Sechedule RC-D)................................. RCFD 3548 0 15.b RCON 16. Other borrowed money: ---- a. With original maturity of one year or less............................... 2332 0 16.a b. With original maturity of more than one year............................ A547 0 16.b c. With original maturity of more than three years.......................... A548 0 16.c 17. Not applicable 18. Bank's liability on acceptance executed and outstanding..................... 2920 0 18. 19. Subordinated notes and debentures........................................... 3200 0 19. 20. Other liabilities (from Schedule RC-G)...................................... 2930 63,244 20. 21. Total liabilities (sum of items 13 through 20).............................. 2948 653,090 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus............................... 3838 0 23. 24. Common stock................................................................ 3230 800 24. 25. Surplus (exclude all surplus related to preferred stock) ................... 3839 45,157 25. 26. a. Undivided profits and capital reserves... ............................... 3632 62,458 26.a b. Net unrealized holding gains (losses) on available-for-sale securities................................... ........................... 8434 14 26.b c. Accumulated net gains (losses) on cash flow hedges....................... 4336 0 26.c 27. Cumulative foreign currency translation adjustments 28. Total equity capital (sum of items 23 through 27)........................... 3210 108,429 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28)....................................... 3300 761,519 29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for ---------- Number the bank by independent external auditors as of any date during 1996............RCFD 6724...... |N/A | M.1. ----------
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. -----END PRIVACY-ENHANCED MESSAGE-----