Document:

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                                                                    Exhibit 4.01

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO SALOMON SMITH BARNEY HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. R-1                                           INITIAL PRINCIPAL AMOUNT
CUSIP 79549C 66 7                                 REPRESENTED $30,000,000
                                                  representing 3,000,000 ELKS
                                                  ($10 per ELKS)

                       SALOMON SMITH BARNEY HOLDINGS INC.
                 Equity Linked Securities (ELKS[sm]) based upon
       the Common Stock of American Express Company due December 22, 2003

      Salomon Smith Barney Holdings Inc., a New York corporation (hereinafter
referred to as the "Company", which term includes any successor corporation
under the Indenture herein referred to), for value received and on condition
that this Note is not redeemed by the Company prior to December 22, 2003 (the
"Stated Maturity Date"), hereby promises to pay to CEDE & CO., or its registered
assigns, the Maturity Payment (as defined below), on the Stated Maturity Date.
This Note will bear semi-annual payments of interest, is not subject to any
sinking fund, is not subject to redemption at the option of the Holder thereof
prior to the Stated Maturity Date, and is not subject to the defeasance
provisions of the Indenture.

      Payment of the Maturity Payment with respect to this Note shall be made
upon presentation and surrender of this Note at the corporate trust office of
the Trustee in the Borough of Manhattan, The City and State of New York, in such
coin or currency of the United States as at the time of payment is legal tender
for payment of public and private debts or, if applicable, in the common stock
of American Express Company ("American Express").

      This Note is one of the series of Equity Linked Securities based upon the
common stock of American Express Company due December 22, 2003 (the "ELKS").
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COUPON

      A coupon of $0.4044 per ELKS will be paid in cash on June 22, 2003 and a
coupon of $0.4000 per ELKS will be paid in cash on December 22, 2003. The June
22, 2003 coupon will be composed of $0.0765 of interest and a partial payment of
an option premium in the amount of $0.3279. The December 22, 2003 coupon will be
composed of $0.0756 of interest and a partial payment of an option premium in
the amount of $0.3244. Coupon payments will be payable to the persons in whose
names the ELKS are registered at the close of business on the Business Day
preceding each Interest Payment Date. If an Interest Payment Date falls on a day
that is not a Business Day, the coupon payment to be made on such Interest
Payment Date will be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date, and no additional
interest will accrue as a result of such delayed payment.

      "Business Day" means any day that is not a Saturday, a Sunday or a day on
which the AMEX or banking institutions or trust companies in the City of New
York are authorized or obligated by law or executive order to close.

      The interest portion of the coupon will represent interest accruing at a
rate of 1.5125% per annum from December 20, 2002 or from the most recent
Interest Payment Date to which the interest portion of the coupon has been paid
or provided for until maturity. The interest portion of the coupon will be
computed on the basis of a 360-day year of twelve 30-day months.

PAYMENT AT MATURITY

      On the Stated Maturity Date, Holders of the ELKS will receive for each
ELKS the Maturity Payment described below.

DETERMINATION OF THE MATURITY PAYMENT

      The Maturity Payment for each ELKS equals either:

      -     a number of shares of American Express common stock equal to the
            Exchange Rate, if the Trading Price of American Express common stock
            on any Trading Day after December 17, 2002 up to and including the
            third Trading Day before the Stated Maturity Date (whether intra-day
            or at the close of trading on any day) is less than or equal to
            $27.59 (approximately 75% of the initial share price), or

      -     $10 in cash.

      In lieu of any fractional share of American Express common stock otherwise
payable in respect of any ELKS, at the Stated Maturity Date, the Holder of this
Note will receive an amount in cash equal to the value of such fractional share.
The number of full shares of American Express common stock, and any cash in lieu
of a fractional share, to be delivered at the Stated Maturity Date to the Holder
of this Note will be calculated based on the aggregate number of ELKS held by
such Holder.

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      The "Initial Share Price" will equal $36.79, the price per share of
American Express common stock at the market close on December 17, 2002.

      The "Exchange Rate" will equal 0.27181.

      A "Market Disruption Event" means the occurrence or existence of any
suspension of or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by any exchange or market or otherwise) of, or the
unavailability, through a recognized system of public dissemination of
transaction information, of accurate price, volume or related information in
respect of, (1) the shares of American Express common stock on any exchange or
market, or (2) any options contracts or futures contracts relating to the shares
of American Express common stock, or any options on such futures contracts, on
any exchange or market if, in each case, in the determination of the calculation
agent, any such suspension, limitation or unavailability is material.

      A "Trading Day" means a day, as determined by the calculation agent, on
which trading is generally conducted (or was scheduled to have been generally
conducted, but for the occurrence of a Market Disruption Event) on the New York
Stock Exchange, the AMEX, the Nasdaq National Market, the Chicago Mercantile
Exchange and the Chicago Board Options Exchange, and in the over-the-counter
market for equity securities in the United States.

      The "Trading Price" of American Express common stock (or any other common
stock for which a Trading Price must be determined) on any date of determination
will be (1) if the common stock is listed on a national securities exchange on
that date of determination, any reported sale price, regular way, of the
principal trading session on that date on the principal U.S. exchange on which
the common stock is listed or admitted to trading, (2) if the common stock is
not listed on a national securities exchange on that date of determination, or
if the reported sale price on such exchange is not obtainable (even if the
common stock is listed or admitted to trading on such exchange), and the common
stock is quoted on the Nasdaq National Market, any reported sale price of the
principal trading session on that date as reported on the Nasdaq, and (3) if the
common stock is not quoted on the Nasdaq on that date of determination, or if
the reported sale price on the Nasdaq is not obtainable (even if the common
stock is quoted on the Nasdaq), any reported sale price of the principal trading
session on the over-the-counter market on that date as reported on the OTC
Bulletin Board, the National Quotation Bureau or a similar organization. The
determination of the Trading Price by the calculation agent in the event of a
Market Disruption Event may be deferred by the calculation agent for up to five
consecutive Trading Days on which a Market Disruption Event is occurring. If no
reported sale price of the principal trading session is available pursuant to
clauses (1), (2) or (3) above or if there is a Market Disruption Event, the
Trading Price on any date of determination, unless deferred by the calculation
agent as described in the preceding sentence, will be the arithmetic mean, as
determined by the calculation agent, of the bid prices of the common stock
obtained from as many dealers in such stock (which may include Salomon Smith
Barney Inc. or any of our other subsidiaries or affiliates), but not exceeding
three such dealers, as will make such bid prices available to the calculation
agent. A security "quoted on the Nasdaq National Market" will include a security
included for listing or quotation in any successor to such system and the term
"OTC Bulletin Board" will include any successor to such service.

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DILUTION ADJUSTMENTS

      If American Express, after the closing date of the offering of the ELKS,

      1.    pays a stock dividend or makes a distribution with respect to its
            common stock in shares of the stock,

      2.    subdivides or splits the outstanding shares of its common stock into
            a greater number of shares,

      3.    combines the outstanding shares of the common stock into a smaller
            number of shares, or

      4.    issues by reclassification of shares of its common stock any shares
            of other common stock of American Express,

then, in each of these cases, the Exchange Rate will be multiplied by a dilution
adjustment equal to a fraction, the numerator of which will be the number of
shares of common stock outstanding immediately after the event, plus, in the
case of a reclassification referred to in (4) above, the number of shares of
other common stock of American Express, and the denominator of which will be the
number of shares of common stock outstanding immediately before the event. The
Initial Share Price will also be adjusted in that case in the manner described
below.

      If American Express, after the closing date, issues, or declares a record
date in respect of an issuance of, rights or warrants to all holders of its
common stock entitling them to subscribe for or purchase shares of its common
stock at a price per share less than the Then-Current Market Price of the common
stock, other than rights to purchase common stock pursuant to a plan for the
reinvestment of dividends or interest, then, in each of these cases, the
Exchange Rate will be multiplied by a dilution adjustment equal to a fraction,
the numerator of which will be the number of shares of common stock outstanding
immediately before the adjustment is effected, plus the number of additional
shares of common stock offered for subscription or purchase pursuant to the
rights or warrants, and the denominator of which will be the number of shares of
common stock outstanding immediately before the adjustment is effected by reason
of the issuance of the rights or warrants, plus the number of additional shares
of common stock which the aggregate offering price of the total number of shares
of common stock offered for subscription or purchase pursuant to the rights or
warrants would purchase at the Then-Current Market Price of the common stock,
which will be determined by multiplying the total number of shares so offered
for subscription or purchase by the exercise price of the rights or warrants and
dividing the product obtained by the Then-Current Market Price. To the extent
that, after the expiration of the rights or warrants, the shares of common stock
offered thereby have not been delivered, the Exchange Rate will be further
adjusted to equal the Exchange Rate which would have been in effect had the
adjustment for the issuance of the rights or warrants been made upon the basis
of delivery of only the number of shares of common stock actually delivered. The
Initial Share Price will also be adjusted in that case in the manner described
below.

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      If American Express, after the closing date, declares or pays a dividend
or makes a distribution to all holders of the common stock of any class of its
capital stock, the capital stock of one or more of its subsidiaries, evidences
of its indebtedness or other non-cash assets, excluding any dividends or
distributions referred to in the above paragraph, or issues to all holders of
its common stock rights or warrants to subscribe for or purchase any of its or
one or more of its subsidiaries' securities, other than rights or warrants
referred to in the above paragraph, then, in each of these cases, the Exchange
Rate will be multiplied by a dilution adjustment equal to a fraction, the
numerator of which will be the Then-Current Market Price of one share of the
common stock, and the denominator of which will be the Then-Current Market Price
of one share of the common stock, less the fair market value (as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) as of the time the
adjustment is effected of the portion of the capital stock, assets, evidences of
indebtedness, rights or warrants so distributed or issued applicable to one
share of common stock. The Initial Share Price will also be adjusted in that
case in the manner described below.

      Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which the above paragraph would otherwise apply, the
denominator in the fraction referred to in the above formula is less than $1.00
or is a negative number, then the Company may, at its option, elect to have the
adjustment provided by the above paragraph not be made and in lieu of that
adjustment, the Trading Price of American Express common stock on any Trading
Day thereafter up to and including the third Trading Day before maturity will be
deemed to be equal to the fair market value of the capital stock, evidences of
indebtedness, assets, rights or warrants (determined, as of the date the
dilution adjustment would otherwise be effected as described below, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) so distributed or
issued applicable to one share of American Express common stock and, if the
Trading Price of American Express common stock on any Trading Day thereafter up
to and including the third Trading Day before maturity is less than or equal to
approximately 75% of the Initial Share Price, each holder of the ELKS will have
the right to receive at maturity cash in an amount per ELKS equal to the
Exchange Rate multiplied by such fair market value.

      If American Express, after the closing date, declares a record date in
respect of a distribution of cash, other than any Permitted Dividends described
below, any cash distributed in consideration of fractional shares of common
stock and any cash distributed in a Reorganization Event referred to below, by
dividend or otherwise, to all holders of its common stock, or makes an Excess
Purchase Payment, then the Exchange Rate will be multiplied by a dilution
adjustment equal to a fraction, the numerator of which will be the Then-Current
Market Price of the common stock, and the denominator of which will be the
Then-Current Market Price of the common stock on the record date less the amount
of the distribution applicable to one share of common stock which would not be a
Permitted Dividend, or, in the case of an Excess Purchase Payment, less the
aggregate amount of the Excess Purchase Payment for which adjustment is being
made at the time divided by the number of shares of American Express common
stock outstanding on the record date. The Initial Share Price will also be
adjusted in that case in the manner described below.

                                       5
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      For the purposes of these adjustments:

      A "Permitted Dividend" is any quarterly cash dividend in respect of
American Express common stock, other than a quarterly cash dividend that exceeds
the immediately preceding quarterly cash dividend, and then only to the extent
that the per share amount of this dividend results in an annualized dividend
yield on the common stock in excess of 10%.

      An "Excess Purchase Payment" is the excess, if any, of (x) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) of all other consideration paid by American Express with respect to
one share of common stock acquired in a tender offer or exchange offer by
American Express, over (y) the Then-Current Market Price of the common stock.

      Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution or Excess Purchase Payment to which the fifth paragraph
in this section would otherwise apply, the denominator in the fraction referred
to in the formula in that paragraph is less than $1.00 or is a negative number,
then the Company may, at its option, elect to have the adjustment provided by
the fifth paragraph in this section not be made and in lieu of that adjustment,
the Trading Price of American Express common stock on any Trading Day thereafter
up to and including the third Trading Day before maturity will be deemed to be
equal to the sum of the amount of cash and the fair market value of other
consideration (determined, as of the date the dilution adjustment would
otherwise be effected as described below, by a nationally recognized independent
investment banking firm retained for this purpose by the Company, whose
determination will be final) so distributed or applied to the acquisition of the
common stock in the tender offer or exchange offer applicable to one share of
American Express common stock and, if the Trading Price of American Express
common stock on any Trading Day thereafter up to and including the third Trading
Day before maturity is less than or equal to approximately 75% of the Initial
Share Price, each holder of the ELKS will have the right to receive at maturity
cash in an amount per ELKS equal to the Exchange Rate multiplied by such sum.

      If any adjustment is made to the Exchange Rate as set forth above, an
adjustment will also be made to the Initial Share Price. The required adjustment
will be made by dividing the Initial Share Price by the relevant dilution
adjustment. If, during any period of ten Trading Days used to calculate the
Then-Current Market Price, there occurs any event requiring an adjustment to be
effected as described herein, then the Closing Price for each Trading Day in
such period of ten Trading Days occurring prior to the day on which such
adjustment is effected will be adjusted by being divided by the relevant
dilution adjustment.

      Each dilution adjustment will be effected as follows:

      -     in the case of any dividend, distribution or issuance, at the
            opening of business on the Business Day next following the record
            date for determination of holders of American Express common stock
            entitled to receive this dividend, distribution or issuance or, if
            the announcement of this dividend, distribution, or issuance is
            after

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            this record date, at the time this dividend, distribution or
            issuance was announced by American Express,

      -     in the case of any subdivision, split, combination or
            reclassification, on the effective date of the transaction,

      -     in the case of any Excess Purchase Payment for which American
            Express announces, at or prior to the time it commences the relevant
            share repurchase, the repurchase price per share for shares proposed
            to be repurchased, on the date of the announcement, and

      -     in the case of any other Excess Purchase Payment, on the date that
            the holders of the repurchased shares become entitled to payment in
            respect thereof.

      All dilution adjustments will be rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th. No adjustment in the Exchange Rate will be required unless the
adjustment would require an increase or decrease of at least one percent
therein, provided, however, that any adjustments which by reason of this
sentence are not required to be made will be carried forward (on a percentage
basis) and taken into account in any subsequent adjustment. If any announcement
or declaration of a record date in respect of a dividend, distribution, issuance
or repurchase requiring an adjustment as described herein is subsequently
canceled by American Express, or this dividend, distribution, issuance or
repurchase fails to receive requisite approvals or fails to occur for any other
reason, then, upon the cancellation, failure of approval or failure to occur,
the Exchange Rate will be further adjusted to the Exchange Rate which would then
have been in effect had adjustment for the event not been made. If a
Reorganization Event described below occurs after the occurrence of one or more
events requiring an adjustment as described herein, the dilution adjustments
previously applied to the Exchange Rate will not be rescinded but will be
applied to the new Exchange Rate provided for below.

      The "Then-Current Market Price" of the common stock, for the purpose of
applying any dilution adjustment, means the average Closing Price per share of
common stock for the 10 Trading Days immediately before this adjustment is
effected or, in the case of an adjustment effected at the opening of business on
the Business Day next following a record date, immediately before the earlier of
the date the adjustment is effected and the related Ex-Date. For purposes of
determining the Then-Current Market Price, the determination of the Closing
Price by the calculation agent in the event of a Market Disruption Event, as
described in the definition of Closing Price, may be deferred by the calculation
agent for up to five consecutive Trading Days on which a Market Disruption Event
is occurring.

      The "Closing Price" of American Express common stock (or any other
security for which a Closing Price must be determined) on any date of
determination will be (1) if the common stock is listed on a national securities
exchange on that date of determination, the closing sale price or, if no closing
sale price is reported, the last reported sale price on that date on the
principal U.S. exchange on which the common stock is listed or admitted to
trading, (2) if the common stock is not listed on a national securities exchange
on that date of determination, or if

                                       7
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the closing sale price or last reported sale price is not obtainable (even if
the common stock is listed or admitted to trading on such exchange), and the
common stock is quoted on the Nasdaq National Market, the closing sale price or,
if no closing sale price is reported, the last reported sale price on that date
as reported on the Nasdaq, and (3) if the common stock is not quoted on the
Nasdaq on that date of determination or, if the closing sale price or last
reported sale price is not obtainable (even if the common stock is quoted on the
Nasdaq), the last quoted bid price for the common stock in the over-the-counter
market on that date as reported by the OTC Bulletin Board, the National
Quotation Bureau or a similar organization. If no closing sale price or last
reported sale price is available pursuant to clauses (1), (2) or (3) of the
preceding sentence or if there is a Market Disruption Event, the Closing Price
on any date of determination will be the arithmetic mean, as determined by the
calculation agent, of the bid prices of the common stock obtained from as many
dealers in such stock (which may include Salomon Smith Barney Inc. or any of our
other subsidiaries or affiliates), but not exceeding three such dealers, as will
make such bid prices available to the calculation agent. A security "quoted on
the Nasdaq National Market" will include a security included for listing or
quotation in any successor to such system and the term "OTC Bulletin Board" will
include any successor to such service.

      The "Ex-Date" with respect to any dividend, distribution or issuance is
the first date on which the shares of the common stock trade in the regular way
on their principal market without the right to receive this dividend,
distribution or issuance.

      In the event of any of the following "Reorganization Events":

      -     any consolidation or merger of American Express, or any surviving
            entity or subsequent surviving entity of American Express, with or
            into another entity, other than a merger or consolidation in which
            American Express is the continuing corporation and in which the
            common stock outstanding immediately before the merger or
            consolidation is not exchanged for cash, securities or other
            property of American Express or another issuer,

      -     any sale, transfer, lease or conveyance to another corporation of
            the property of American Express or any successor as an entirety or
            substantially as an entirety,

      -     any statutory exchange of securities of American Express or any
            successor of American Express with another issuer, other than in
            connection with a merger or acquisition, or

      -     any liquidation, dissolution or winding up of American Express or
            any successor of American Express,

the Trading Price of American Express common stock on any Trading Day thereafter
up to and including the third Trading Day before maturity will be deemed to be
equal to the Transaction Value.

      The "Transaction Value" will be the sum of:

                                       8
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      1.    for any cash received in a Reorganization Event, the amount of cash
            received per share of common stock,

      2.    for any property other than cash or Marketable Securities received
            in a Reorganization Event, an amount equal to the market value on
            the date the Reorganization Event is consummated of that property
            received per share of common stock, as determined by a nationally
            recognized independent investment banking firm retained for this
            purpose by the Company, whose determination will be final, and

      3.    for any Marketable Securities received in a Reorganization Event, an
            amount equal to the Closing Price per share of these Marketable
            Securities on the applicable Trading Day multiplied by the number of
            these Marketable Securities received for each share of common stock.

      "Marketable Securities" are any perpetual equity securities or debt
securities with a stated maturity after the maturity date, in each case that are
listed on a U.S. national securities exchange or reported by the Nasdaq Stock
Market. The number of shares of any equity securities constituting Marketable
Securities included in the calculation of Transaction Value pursuant to clause
(3) above will be adjusted if any event occurs with respect to the Marketable
Securities or the issuer of the Marketable Securities between the time of the
Reorganization Event and maturity that would have required an adjustment as
described above, had it occurred with respect to the American Express common
stock or American Express. Adjustment for these subsequent events will be as
nearly equivalent as practicable to the adjustments described above.

      If American Express common stock has been subject to a Reorganization
Event and the Trading Price of American Express common stock on any Trading Day
up to and including the third Trading Day before maturity is less than or equal
to approximately 75% of the Initial Share Price, then each holder of the ELKS
will have the right to receive per $10 principal amount of ELKS (i) cash in an
amount equal to the Exchange Rate multiplied by the sum of clauses (1) and (2)
in the definition of "Transaction Value" above and (ii) the number of Marketable
Securities received for each share of stock in the Reorganization Event
multiplied by the Exchange Rate.

GENERAL

      This Note is one of a duly authorized issue of Debt Securities of the
Company, issued and to be issued in one or more series under a Senior Debt
Indenture, dated as of October 27, 1993, as supplemented by a First Supplemental
Indenture, dated as of November 28, 1997, a Second Supplemental Indenture, dated
as of July 1, 1999, and as further supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the ELKS, and the terms upon which the ELKS are,
and are to be, authenticated and delivered.

                                       9
<PAGE>
      If an Event of Default with respect to the ELKS shall have occurred and be
continuing, the principal of the ELKS may be declared due and payable in the
manner and with the effect provided in the Indenture. In such case, the amount
declared due and payable upon any acceleration permitted by the Indenture will
be determined by the calculation agent and will be equal to, with respect to
this Note, the Maturity Payment calculated as though the Stated Maturity Date of
this Note were the date of early repayment. In case of default at Maturity of
this Note, this Note shall bear interest, payable upon demand of the beneficial
owners of this Note in accordance with the terms of the ELKS, from and after
Maturity through the date when payment of such amount has been made or duly
provided for, at the rate of 2.75% per annum on the unpaid amount (or the cash
equivalent of such unpaid amount) due.

      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 rights of the Holders of the Debt Securities of each series to
be affected under the Indenture at any time by the Company and a majority in
aggregate principal amount of the Debt Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of
all Debt Securities of such series, to waive compliance by the Company 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 Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note 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 Note.

      The Holder of this Note may not enforce such Holder's rights pursuant to
the Indenture or the Notes except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company to pay the Maturity Payment with
respect to this Note, and to pay any interest on any overdue amount thereof at
the time, place and rate, and in the coin or currency, herein prescribed.

      All terms used in this Note which are defined in the Indenture but not in
this Note shall have the meanings assigned to them in the Indenture.

      Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purposes.

                                       10
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      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

                                          SALOMON SMITH BARNEY HOLDINGS INC.

                                          By: /s/ Mark I. Kleinman
                                              ----------------------------------
                                              Name:  Mark I. Kleinman
                                              Title: Executive Vice President
                                                     and Treasurer

Corporate Seal
Attest:

By: /s/ Douglas C. Turnbull
    --------------------------
    Name:  Douglas C. Turnbull
    Title: Assistant Secretary

Dated: December 20, 2002

CERTIFICATE OF AUTHENTICATION
    This is one of the Notes referred to in the
    within-mentioned Indenture.

The Bank of New York,
as Trustee

By: /s/ Geovanni Barris
    --------------------
    Authorized Signatory

                                       11<PAGE>
                                  Exhibit 10.1

        Form of Escrow Agreement between CNL Hospitality Properties, Inc.
                               and SouthTrust Bank

<PAGE>

                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT (the "Agreement") is dated this ____ day of
___________, 2003, by and among CNL HOSPITALITY PROPERTIES, INC., a Maryland
corporation (the "Company"), CNL SECURITIES CORP., a Florida corporation (the
"Managing Dealer"), and SOUTHTRUST BANK (the "Escrow Agent"). This Agreement
shall be effective as of the effective date of the Company's Registration
Statement filed with the Securities and Exchange Commission (the "Effective
Date").

         WHEREAS, the Company proposes to offer and sell, on a best-efforts
basis through the Managing Dealer and selected broker-dealers registered with
the National Association of Securities Dealers, Inc. (the Managing Dealer and
such selected broker-dealers are hereinafter referred to collectively as the
"Soliciting Dealers") up to 175,000,000 shares of common stock of the Company
(the "Shares") to investors at $10.00 per Share pursuant to a registration
statement (the "Registration Statement") filed with the Securities and Exchange
Commission; and

         WHEREAS, the Company and the Managing Dealer desire to establish an
escrow in which funds received from subscribers will be deposited and the Escrow
Agent is willing to serve as Escrow Agent upon the terms and conditions herein
set forth;

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the parties covenant and agree as follows.

         1.    Establishment  of Escrow  Accounts.  On or prior to the Effective
Date, the Company and the Managing  Dealer shall  establish an  interest-bearing
escrow  account with the Escrow  Agent,  which escrow  account shall be entitled
"ESCROW  ACCOUNT  FOR  THE  BENEFIT  OF  SUBSCRIBERS  FOR  COMMON  STOCK  OF CNL
HOSPITALITY  PROPERTIES,  INC." (the "Escrow Account").  All monies deposited in
the Escrow  Account are  hereinafter  referred to as the  "Escrowed  Funds." The
Managing  Dealer  will,  and  will  cause  selected   broker-dealers  acting  as
Soliciting  Dealers to,  instruct  subscribers to make checks for  subscriptions
payable to either the  Escrow  Agent or the  Company.  The  Managing  Dealer may
authorize  certain  Soliciting  Dealers which are "$250,000  broker-dealers"  to
instruct their customers to make their checks for Shares  subscribed for payable
directly to the Soliciting  Dealer.  In such case,  the  Soliciting  Dealer will
collect the proceeds of the  subscribers'  checks and issue a check made payable
to the order of the Escrow Agent for the  aggregate  amount of the  subscription
proceeds.

         2.    Deposits  into the  Escrow  Account.  The  Managing  Dealer  will
promptly  deliver all monies received from subscribers for the payment of Shares
to the Escrow Agent for deposit in the Escrow Account.

         3.    Collection Procedure.

               (a) The Escrow Agent is hereby  authorized  to forward each check
         for collection  and, upon  collection of the proceeds of each check, to
         deposit the collected proceeds in the Escrow Account or, alternatively,
         the Escrow Agent may  telephone the bank on which the check is drawn to
         confirm that the check has been paid.

               (b) Any  check  returned  unpaid  to the  Escrow  Agent  shall be
         returned to the  Soliciting  Dealer that  submitted the check.  In such
         cases the Escrow Agent will promptly notify the Company of such return.

               (c) In the event that (i) the Company  rejects  any  subscription
         for  Shares  or  (ii) an  investor  who has  telephonically  or  orally
         subscribed  for Shares  properly  withdraws  such  subscription  within
         fifteen (15) days from the date written confirmation has been mailed to
         the subscriber, and, in either such event, the Escrow Agent has already
         collected funds for such subscription,  the Escrow Agent shall promptly
         issue a refund  check to the  drawer  of the check  submitted  by or on
         behalf of the  rejected  or  withdrawing  subscriber.  If either of the
         events  specified in the clauses (i) or (ii) of the preceding  sentence
         occur and, in either such event, the Escrow Agent has not yet collected
         funds for such  subscription  but has submitted  the check  relating to
         such subscription for collection, the Escrow Agent shall promptly issue
         a check in the  amount of such  check to the  rejected  or  withdrawing
         subscriber after the Escrow Agent has cleared such funds. If the Escrow
         Agent has not yet submitted the check relating to the  subscription  of
         the rejected or withdrawing subscriber, the Escrow Agent shall promptly
         remit such check directly to the drawer of the check submitted by or on
         behalf of the subscriber.

         4.    Investment of Escrowed Funds. The Escrow Agent,  immediately upon
receipt of each check remitted to it, shall deposit such check in a bank account
(including, but not limited to, interest-bearing savings accounts and bank money
market  accounts),  in short-term  certificates  of deposit issued by a bank, in
short-term  securities directly or indirectly issued or guaranteed by the United
States  Government,  or in  other  short-term  highly  liquid  investments  with
appropriate  safety of principal,  all as directed by the Company.  Interest and
dividends earned on such investments shall be similarly reinvested.

         5.    Distribution  of Escrowed  Funds.  The Escrow Agent shall release
from the Escrow  Account to the  Company  any and all  Escrowed  Funds  therein,
together with all interest earned thereon, upon written request of an officer of
the Company.

         6.    Liability of Escrow Agent.

               (a) In performing any of its duties under this Agreement, or upon
         the claimed failure to perform its duties  hereunder,  the Escrow Agent
         shall not be liable to anyone  for any  damages,  losses,  or  expenses
         which it may  incur as a  result  of the  Escrow  Agent so  acting,  or
         failing to act; provided, however, the Escrow Agent shall be liable for
         damages  arising out of its willful  default or misconduct or its gross
         negligence  under this Agreement.  Accordingly,  the Escrow Agent shall
         not incur any such  liability  with  respect to (i) any action taken or
         omitted to be taken in good faith upon advice of its counsel or counsel
         for the Company which is given with respect to any  questions  relating
         to the duties and  responsibilities  of the Escrow Agent hereunder,  or
         (ii) any  action  taken or  omitted  to be taken in  reliance  upon any
         document,  including any written notice or instructions provided for in
         this  Escrow  Agreement,  not only as to its due  execution  and to the
         validity and  effectiveness  of its provisions but also as to the truth
         and accuracy of any information  contained therein, if the Escrow Agent
         shall in good faith believe such  document to be genuine,  to have been
         signed or presented by a proper person or persons,  and to conform with
         the provisions of this Agreement.

               (b) The Company  hereby agrees to indemnify and hold harmless the
         Escrow Agent against any and all losses, claims,  damages,  liabilities
         and  expenses,  including,  without  limitation,  reasonable  costs  of
         investigation and counsel fees and disbursements  which may be incurred
         by it  resulting  from any act or  omission of the  Company;  provided,
         however,  that the Company shall not indemnify the Escrow Agent for any
         losses, claims,  damages, or expenses arising out of the Escrow Agent's
         willful default, misconduct, or gross negligence under this Agreement.

               (c) If a dispute  ensues between any of the parties hereto which,
         in the opinion of the Escrow Agent,  is sufficient to justify its doing
         so, the Escrow  Agent shall be entitled to tender into the  registry or
         custody of any court of competent  jurisdiction,  including the Circuit
         Court of Orange  County,  Florida,  all money or  property in its hands
         under the terms of this Agreement,  and to file such legal  proceedings
         as it deems  appropriate,  and shall  thereupon be discharged  from all
         further  duties  under this  Agreement.  Any such  legal  action may be
         brought in any such court as the Escrow  Agent shall  determine to have
         jurisdiction  thereof.  The Company  shall  indemnify  the Escrow Agent
         against its court  costs and  attorneys'  fees  incurred in filing such
         legal proceedings.

         7.    Inability to Deliver.  In the event that checks for subscriptions
delivered to the Escrow Agent by the Company  pursuant to this Agreement are not
cleared through normal banking channels within 120 days after such delivery, the
Escrow Agent shall deliver such uncleared checks to the Company.

         8.    Notice. All notices,  requests,  demands and other communications
or deliveries  required or permitted to be given  hereunder  shall be in writing
and shall be deemed to have been duly given if  delivered  personally,  given by
prepaid  telegram or  deposited  for  mailing,  first  class,  postage  prepaid,
registered or certified mail, as follows:

<PAGE>

   If to the subscribers for Shares: To their respective
                                     addresses as specified in
                                     their Subscription
                                     Agreements.

   If to the Company:                CNL Hospitality Properties, Inc.
                                     CNL Center at City Commons
                                     450 South Orange Avenue
                                     Orlando, Florida  32801
                                     Attention:  Mr. James M. Seneff, Jr.,
                                     Chairman of the Board

   If to the Managing Dealer:        CNL Securities Corp.
                                     CNL Center at City Commons
                                     450 South Orange Avenue
                                     Orlando, Florida  32801
                                     Attention:  Mr. Robert A. Bourne, President

   If to the Escrow Agent:           SOUTHTRUST BANK
                                     135 West Central Boulevard, Suite 1200
                                     Orlando, Florida  32801
                                     Attention:  Ms. Rebecca Brayman

         9.    Fees to Escrow  Agent.  In  consideration  of the  services to be
provided by the Escrow Agent hereunder,  the Company will pay the Escrow Agent a
fee for its services  hereunder (the "Escrow Fee"). The Escrow Fee shall be $350
for each month or any portion thereof that the Escrow Account  continues for the
Company.  Payments  by the  Company,  if any,  shall be due and  payable no less
frequently than six-month  intervals while the escrow continues for the Company.
In no event shall the total Escrow Fees payable by the Company  pursuant to this
Agreement be less than $2,100,  nor more than $4,200,  for any 12-month  period.
Notwithstanding  anything  contained in this  Agreement to the  contrary,  in no
event shall any fee,  reimbursement for costs and expenses,  indemnification for
any damages incurred by the Escrow Agent, or monies whatsoever be paid out of or
chargeable to the Escrowed Funds in the Escrow Account.

         10.   General.

               (a)  This  Agreement  shall  be  governed  by and  construed  and
         enforced in accordance with the laws of the State of Florida.

               (b) The  section  headings  contained  herein  are for  reference
         purposes  only  and  shall  not  in  any  way  affect  the  meaning  or
         interpretation of this Agreement.

               (c)  This   Agreement   sets  forth  the  entire   agreement  and
         understanding of the parties with regard to this escrow transaction and
         supersedes  all  prior  agreements,   arrangements  and  understandings
         relating to the subject matter hereof.

               (d)  This  Agreement  may be  amended,  modified,  superseded  or
         cancelled,  and any of the terms or  conditions  hereof  may be waived,
         only by a written  instrument  executed by each party hereto or, in the
         case of a waiver, by the party waiving  compliance.  The failure of any
         party  at any time or times to  require  performance  of any  provision
         hereof  shall in no manner  affect the right at a later time to enforce
         the same.  No waiver in any one or more  instances  by any party of any
         condition,  or of the breach of any term  contained in this  Agreement,
         whether by conduct or  otherwise,  shall be deemed to be, or  construed
         as, a further or continuing  waiver of any such condition or breach, or
         a waiver of any other  condition or of the breach of any other terms of
         this Agreement.

               (e) This Agreement may be executed  simultaneously in two or more
         counterparts,  each of which  shall be deemed an  original,  but all of
         which together shall constitute one and the same instrument.

               (f) This  Agreement  shall  inure to the  benefit of the  parties
         hereto and their respective administrators, successors, and assigns.

         11.   Representation  of the Company.  The Company hereby  acknowledges
that the status of the Escrow  Agent with  respect to the offering of the Shares
is that of agent only for the  limited  purposes  herein  set forth,  and hereby
agrees it will not represent or imply that the Escrow  Agent,  by serving as the
Escrow Agent  hereunder or  otherwise,  has  investigated  the  desirability  or
advisability of an investment in the Shares, or has approved, endorsed or passed
upon the merits of the Shares,  nor shall the Company use the name of the Escrow
Agent in any  manner  whatsoever  in  connection  with the  offer or sale of the
Shares,  other  than by  acknowledgement  that it has  agreed to serve as Escrow
Agent for the limited purposes herein set forth.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.

                                    "Company"

                                    CNL HOSPITALITY PROPERTIES, INC.

                                    By:      __________________________________
                                             JAMES M. SENEFF, JR.,
                                             Chairman of the Board

                                    "MANAGING DEALER"

                                    CNL SECURITIES CORP.

Attest:                             By:      ___________________________________
        --------------                       ROBERT A. BOURNE, President

                                    "ESCROW AGENT"

                                    SOUTHTRUST BANK

Attest:                             By:      ___________________________________
        --------------              Name:    ___________________________________
                                    Title:   ___________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00046-of-00352.parquet"}]]