Document:

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                                                                     Exhibit 4.9

                        Specimen Master Medium-Term Note

                               (Face of Security)

       THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

       UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE GOLDMAN SACHS GROUP, INC., OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS 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.

       THIS SECURITY IS A MASTER NOTE WITHIN THE MEANING SPECIFIED HEREIN.

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                          THE GOLDMAN SACHS GROUP, INC.
                           MEDIUM-TERM NOTES, SERIES B
                                  (Master Note)

     This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and represents one or more obligations of The Goldman
Sachs Group, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter called the "Company", which term includes any
successor Person under the Indenture) (each such obligation, a "Supplemental
Obligation"). The terms of each Supplemental Obligation are and will be
reflected in this Security and in a pricing supplement to the Company's
prospectus, dated February 16, 2000, relating to such Supplemental Obligation,
which supplement and prospectus are on file with the Trustee hereinafter
referred to and which supplement is identified on Schedule A hereto (each such
pricing supplement, together with such prospectus, a "Pricing Supplement"). With
respect to each Supplemental Obligation, the provisions of the applicable
Pricing Supplement are hereby incorporated by reference herein and are deemed to
be a part of this Security as of the Original Issue Date specified on Schedule
A. Each reference to "this Security" or a "Security of this series" includes and
shall be deemed to refer to each Supplemental Obligation.

     With respect to each Supplemental Obligation, every term of this Security
is subject to modification, amendment or elimination through the incorporation
of the applicable Pricing Supplement by reference, whether or not the phrase
"unless otherwise provided in the Pricing Supplement" or language of similar
import precedes the term of this Security so modified, amended or eliminated. It
is the intent of the parties hereto that, in the case of any conflict between
the terms of a Pricing Supplement and the terms herein, the terms of the Pricing
Supplement shall control over the terms herein with respect to the relevant
Supplemental Obligation. Without limiting the foregoing, in the case of each
Supplemental Obligation, the Holder of this Security is directed to the
applicable Pricing Supplement for a description of certain terms of such
Supplemental Obligation, including, in the case of any such obligation that is
designated in the applicable Pricing Supplement as an "indexed note" (an
"Indexed Note"), the manner of determining the principal amount of and interest,
if any, on

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such Supplemental Obligation, the dates, if any, on which the principal amount
of and interest, if any, on such Supplemental Obligation is determined and
payable, the amount payable upon any acceleration of such Supplemental
Obligation and the principle amount of such Supplemental Obligation deemed to be
Outstanding for purposes of determining whether Holders of the requisite
principle amount of Securities have made or given any request, demand,
authorization, direction, notice, consent, waiver or other action under the
Indenture.

     Terms that are used and not defined in this Security but that are defined
in the Indenture are used herein as defined therein.

     This Security is a "Master Note", which term means a Global Security that
provides for incorporation therein of the terms of Supplemental Obligations by
reference to the applicable Pricing Supplements, substantially as contemplated
herein.

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

     The Company, for value received, hereby promises to pay to CEDE & CO., as
nominee for The Depository Trust Company, or registered assigns: (i) on each
principal payment date, including each amortization date, redemption date,
repayment date or maturity date, as applicable, of each Supplemental Obligation,
the principal amount then due and payable for each such Supplemental Obligation,
and (ii) on each interest payment date and at maturity, the interest then due
and payable, if any, with respect to each Supplemental Obligation.

     With respect to each Supplemental Obligation, the Company shall pay the
principal amount specified in the applicable Pricing Supplement on the Stated
Maturity shown therein, and shall pay interest on such principal, from the date
specified therein as the "Original Issue Date" (or in a comparable manner) (the
"Original Issue Date" for such Supplemental Obligation) or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly
provided for, on the Interest Payment Date(s) in each year, commencing on the
first such date that is at least 15 calendar days after the Original Issue Date,
and at the Maturity of such principal, as follows:

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     (i) in the case of a Supplemental Obligation for which the interest rate is
designated as fixed in the applicable Pricing Supplement (a "Fixed Rate Note"),
at a rate per annum equal to the annual rate specified in such Pricing
Supplement until the principal of such Supplemental Obligation is paid or made
available for payment and (to the extent that the payment of such interest shall
be legally enforceable) at the rate per annum equal to the rate at which the
principal then bears interest on any overdue premium or installment of interest
from the date any such overdue amount first becomes due until it is paid or made
available for payment, provided that interest on any principal, premium or
installment of interest that is overdue shall be payable on demand;

     (ii) in the case of a Supplemental Obligation for which the interest rate
is designated as floating in the applicable Pricing Supplement (a "Floating Rate
Note"), at a rate per annum determined in accordance with the applicable
provisions of Section 3A on the reverse hereof, with such rate being dependent
in part upon whether rate specified as the "base rate" (or in a comparable
manner) in the applicable Pricing Supplement (the "Base Rate" for such
Supplemental Obligation) is the commercial paper rate, the prime rate, LIBOR,
EURIBOR, the treasury rate, the CMT rate, the CD rate, the federal funds rate or
the 11th district rate, until the principal of such Supplemental Obligation is
paid or made available for payment and (to the extent that the payment of such
interest shall be legally enforceable) at the rate at which the principal then
bears interest on any overdue premium or installment of interest from the date
any such overdue amount first becomes due until it is paid or made available for
payment, provided that interest on any principal, premium or installment of
interest that is overdue shall be payable on demand; and

     (iii) in the case of a Supplemental Obligation that is an Indexed Note, at
such rate or in such manner, if any, as may be specified in the applicable
Pricing Supplement.

     With respect to each Supplemental Obligation that is a Fixed Rate Note and
unless otherwise specified in the applicable Pricing Supplement, interest (other
than interest on overdue amounts) shall be payable by the Company, semi-annually
on May 15 and November 15 of each year.

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     With respect to each Supplemental Obligation that is a Floating Rate Note
and unless otherwise specified in the applicable Pricing Supplement, interest
(other than interest on overdue amounts) shall be payable:

     -        if the interest reset period specified in the applicable Pricing
              Supplement (the "Interest Reset Period" for such Supplemental
              Obligation) is daily, weekly or monthly, on the third Wednesday of
              each month or on the third Wednesday of March, June, September and
              December of each year, as specified in the applicable Pricing
              Supplement;

     -        if the Interest Reset Period is quarterly, on the third Wednesday
              of March, June, September and December of each year;

     -        if the Interest Reset Period is semi-annually, on the third
              Wednesday of the two months specified in the applicable Pricing
              Supplement;

     -        and if the Interest Reset Period is annually, on the third
              Wednesday of the month specified in the applicable Pricing
              Supplement

provided that, unless otherwise specified in the applicable Pricing Supplement,
the following sentence shall apply with respect to any such day on which
interest would otherwise be payable, other than any such day on which the
Maturity of the principal of such Floating Rate Note falls: If any such day is
not a Business Day (as defined in Section 3C(b) on the reverse hereof) the day
on which interest should be payable shall be deferred to the next succeeding
Business Day, provided that, if the Base Rate is LIBOR or EURIBOR and such next
succeeding Business Day falls in the next calendar month, the day on which
interest should be payable shall be advanced to the next preceding Business Day.

     With respect to each Supplemental Obligation that is an Indexed Note, such
interest, if any, will be payable on the dates specified in the applicable
Pricing Supplement.

     Each date so determined or provided for in the preceding three paragraphs
(or the applicable Pricing

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Supplement) is hereinafter referred to as an "Interest Payment Date".

         Interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture and unless otherwise
provided in the applicable Pricing Supplement, 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 15th day (whether or not a Business Day) next preceding
such Interest Payment Date (the "Regular Record Date"). Any interest so payable,
but not punctually paid or duly provided for, on any Interest Payment Date will
forthwith cease to be payable to the Holder on such Regular Record Date and such
Defaulted Interest either may 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 the Holder of this Security not
less than 10 days prior to such Special Record Date, or may be paid in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. With respect to any
Supplemental Obligation, references herein to the "Holder" mean the Holder of
this Security.

         CURRENCY OF PAYMENT

         Payment of principal of (and premium, if any) and interest on any
Supplemental Obligation will be made in the currency designated as the
"specified currency" for such payment (or in a comparable manner) in the
applicable Pricing Supplement (the "Specified Currency" for any payment on such
Supplemental Obligation), except as provided in this and the next three
paragraphs. For each Supplemental Obligation, any payment shall be made in the
Specified Currency for such payment unless, at the time of such payment, such
currency is not legal tender for the payment of public and private debts in the
country issuing such currency on the Original Issue Date, in which case the
Specified Currency for such payment shall be such coin or currency as at the
time of such payment is legal tender for the payment of public and private debts
in such country, except as provided in the next sentence. If the euro is the

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Specified Currency for any payment, the Specified Currency for such payment
shall be such coin or currency as at the time of payment is legal tender for the
payment of public and private debts in all EMU Countries (as defined in Section
3C(b) on the reverse hereof), provided that, if on any day there are not at
least two EMU Countries, or if on any day there are at least two EMU Countries
but no coin or currency is legal tender for the payment of public and private
debts in all EMU Countries, then the Specified Currency for such payment shall
be deemed not to be available to the Company on such day.

     Except as provided in the next paragraph, any payment to be made on a
Supplemental Obligation in a Specified Currency other than U.S. dollars will be
made in U.S. dollars if the Person entitled to receive such payment transmits a
written request for such payment to be made in U.S. dollars to the Trustee at
its Corporate Trust Office, Attention: Corporation Trust Trustee Administration,
on or before the fifth Business Day before the payment is to be made. Such
written request may be mailed, hand delivered, telecopied or delivered in any
other manner approved by the Trustee. Any such request made with respect to any
payment on a Supplemental Obligation payable to a particular Holder will remain
in effect for all later payments on such Supplemental Obligation payable to such
Holder, unless such request is revoked on or before the fifth Business Day
before a payment is to be made, in which case such revocation shall be effective
for such and all later payments. In the case of any payment of interest payable
on an Interest Payment Date, such written request must be made by the Person who
is the registered Holder of this Security on the relevant Regular Record Date.

     The U.S. dollar amount of any payment made pursuant to the preceding
paragraph will be determined by the Exchange Rate Agent (as defined in Section
3C(a) on the reverse hereof) based upon the highest bid quotation received by
the Exchange Rate Agent as of 11:00 A.M., New York City time, on the second
Business Day preceding the applicable payment date, from three (or, if three are
not available, then two) recognized foreign exchange dealers selected by the
Exchange Rate Agent in The City of New York, in each case for the purchase by
the quoting dealer, for U.S. dollars and for settlement on such payment date of
an amount of such Specified Currency for such payment equal to the aggregate
amount of such Specified Currency payable on

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such payment date to all Holders of Securities of this or any other series who
elect to receive U.S. dollar payments on such payment date, and at which the
applicable dealer commits to execute a contract. If the Exchange Rate Agent
determines that two such bid quotations are not available on such second
Business Day, such payment will be made in the Specified Currency for such
payment. All currency exchange costs associated with any payment in U.S. dollars
on this Security will be borne by the Holder entitled to receive such payment,
by deduction from such payment.

         Notwithstanding the foregoing, if any amount payable on a Supplemental
Obligation is payable on any day (including at Maturity) in a Specified Currency
other than U.S. dollars, and if such Specified Currency is not available to the
Company on the two Business Days before such day, due to the imposition of
exchange controls, disruption in a currency market or any other circumstances
beyond the control of the Company, the Company will be entitled to satisfy its
obligation to pay such amount in such Specified Currency by making such payment
in U.S. dollars. The amount of such payment in U.S. dollars shall be determined
by the Exchange Rate Agent on the basis of the noon buying rate for cable
transfers in The City of New York for such Specified Currency (the "Exchange
Rate") as of the latest day before the day on which such payment is to be made.
Any payment made under such circumstances in U.S. dollars where the required
payment is in other than U.S. dollars will not constitute an Event of Default
under the Indenture or this Security.

         MANNER OF PAYMENT - U.S. DOLLARS

         Except as provided in the next paragraph, payment of any amount payable
on any Supplemental Obligation in U.S. dollars will be made at the office or
agency of the Company maintained for that purpose in The City of New York (or at
any other office or agency maintained by the Company for that purpose), against
surrender (in the manner provided below) of this Security in the case of any
payment due at Maturity of the principal of such Supplemental Obligation (other
than any payment of interest that first becomes due on an Interest Payment
Date); provided, however, that, at the option of the Company and subject to the
next paragraph, 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.

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     Payment of any amount payable on any Supplemental Obligation in U.S.
dollars will be made by wire transfer of immediately available funds to an
account maintained by the payee with a bank located in the Borough of Manhattan,
The City of New York, if (i) the principal of such Supplemental Obligation is at
least $1,000,000 and (ii) the Holder entitled to receive such payment transmits
a written request for such payment to be made in such manner to the Trustee at
its Corporate Trust Office, Attention: Corporation Trust Trustee Administration,
on or before the fifth Business Day before the day on which such payment is to
be made; provided that, in the case of any such payment due at the Maturity of
the principal of such Supplemental Obligation (other than any payment of
interest that first becomes due on an Interest Payment Date), this Security must
be surrendered (in the manner provided below) at the office or agency of the
Company maintained for that purpose in The City of New York (or at any other
office or agency maintained by the Company for that purpose) in time for the
Paying Agent to make such payment in such funds in accordance with its normal
procedures. Any such request made with respect to any payment on such
Supplemental Obligation payable to a particular Holder will remain in effect for
all later payments on such Supplemental Obligation payable to such Holder,
unless such request is revoked on or before the fifth Business Day before a
payment is to be made, in which case such revocation shall be effective for such
and all later payments. In the case of any payment of interest payable on a
Supplemental Obligation on an Interest Payment Date, such written request must
be made by the Person who is the registered Holder of this Security on the
relevant Regular Record Date. The Company will pay any administrative costs
imposed by banks in connection with making payments by wire transfer with
respect to this Security, but any tax, assessment or other governmental charge
imposed upon any payment will be borne by the Holder of this Security and may be
deducted from the payment by the Company or the Paying Agent.

         MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES

     Payment of any amount payable on any Supplemental Obligation in a Specified
Currency other than U.S. dollars will be made by wire transfer of immediately
available funds to such account as is maintained in such Specified Currency at a
bank or other financial institution acceptable to the Company and the Trustee
and as shall have been designated at

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least five Business Days prior to the applicable payment date by the Person
entitled to receive such payment, provided that, in the case of any such payment
due at the Maturity of the principal of such Supplemental Obligation (other than
any payment of interest that first becomes due on an Interest Payment Date),
this Security must be surrendered (in the manner provided below) at the office
or agency of the Company maintained for that purpose in The City of New York (or
at any other office or agency maintained by the Company for that purpose) in
time for the Paying Agent to make such payment in such funds in accordance with
its normal procedures. Such account designation shall be made by transmitting
the appropriate information to the Trustee at its Corporate Trust Office in the
Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier
or in any other manner approved by the Trustee. Unless revoked, any such account
designation made with respect to any Supplemental Obligation by the Holder
hereof will remain in effect with respect to any further payments with respect
to such Supplemental Obligation payable to such Holder. If a payment in a
Specified Currency other than U.S. dollars with respect to any Supplemental
Obligation cannot be made by wire transfer because the required account
designation has not been received by the Trustee on or before the requisite date
or for any other reason, the Company will cause a notice to be given to the
Holder of this Security at its registered address requesting an account
designation pursuant to which such wire transfer can be made and such payment
will be made within five Business Days after the Trustee's receipt of such a
designation meeting the requirements specified above, with the same force and
effect as if made on the due date. The Company will pay any administrative costs
imposed by banks in connection with making payments by wire transfer with
respect to this Security, but any tax, assessment or other governmental charge
imposed upon any payment will be borne by the Holder of this Security and may be
deducted from the payment by the Company or the Paying Agent.

         MANNER OF PAYMENT - PAYMENTS PURSUANT TO THE APPLICABLE
         PROCEDURES OF THE DEPOSITARY; SURRENDER OF THIS
         SECURITY

         Notwithstanding any provision of this Security or the Indenture, the
Company may make any and all payments of principal, premium and interest on this
Security pursuant to

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the Applicable Procedures of the Depositary for this Security as permitted
in the Indenture.

         Notwithstanding the foregoing, whenever the provisions hereof require
that this Security be surrendered against payment of the principal of a
Supplemental Obligation, such surrender may be effected by means of an
appropriate adjustment to Schedule A hereto to reflect the discharge of such
Supplemental Obligation, with such adjustment to be made by the Trustee in a
manner not inconsistent with the Applicable Procedures of the Depositary for
this Security, and in such circumstances this Security need not actually be
surrendered. This paragraph shall apply only to a Master Note.

         PAYMENTS DUE ON A BUSINESS DAY

         Unless otherwise specified in the applicable Pricing Supplement for a
Supplemental Obligation, if any amount of principal, premium or interest would
otherwise be due on such Supplemental Obligation on a day (the "Specified Day")
that is not a Business Day for such Supplemental Obligation, such amount may be
paid or made available for payment on the next succeeding Business Day (unless
the Base Rate for such Supplemental Obligation is LIBOR or EURIBOR and such next
succeeding Business Day falls in the next calendar month, in which case such
amount may be paid or made available for payment on the next preceding Business
Day) with the same force and effect as if such amount were paid on the Specified
Day. The provisions of this paragraph shall apply to this Security in lieu of
the provisions of Section 113 of the Indenture.

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

         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 by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

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

Dated:  April 14, 2000

                                                THE GOLDMAN SACHS GROUP, INC.

                                                By  /s/  Dan H. Jester
                                               ---------------------------
                                                Name:  Dan H. Jester
                                                Title: Vice President and
                                                       Treasurer

This is one of the Securities of the series designated herein and referred to in
the Indenture

                                                THE BANK OF NEW YORK, as
                                                Trustee

                                                By  /s/ Carlos J. Capellan
                                                -----------------------------
                                                Authorized Officer

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                              (Reverse of Security)

         1.  SECURITIES AND INDENTURE

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of May 19, 1999 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered.

         In the case of the acquisition of all or a portion of a Supplemental
Obligation by the Company or any Affiliate thereof, the Company or such
Affiliate may submit to the Trustee such evidence of such acquisition as is
reasonably acceptable to the Trustee, whereupon the Trustee, at the Company's
direction, shall reduce the principal amount of such Supplemental Obligation in
Schedule A hereto by such acquired amount, and the principal amount of such
Supplemental Obligation shall be reduced accordingly for all purposes of this
Security.

         2.  SERIES AND DENOMINATIONS

         This Security is one of the series designated on the face hereof,
limited to an aggregate principal amount not to exceed $22,000,000,000 (or the
equivalent thereof in any other currency or currencies or currency units), which
amount may be increased at the option of the Company if in the future it
determines that it may wish to sell additional Securities of this series.
References herein to "this series" mean the series of securities designated on
the face hereof.

         The Securities of this series are issuable only in registered form
without coupons in "Authorized Denominations", which term shall have the
following meaning. For each Supplemental Obligations having a principal amount
payable in U.S. dollars, the Authorized Denominations shall

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<PAGE>   14
be $1,000 and multiples thereof, unless otherwise provided in the applicable
Pricing Supplement. For each Supplemental Obligation having a principal amount
payable in a Specified Currency other than U.S. dollars, the Authorized
Denominations shall be the amount of such Specified Currency equivalent, at the
Exchange Rate on the first Business Day next preceding the date on which the
Company accepts the offer to purchase such Security, to $1,000 and any multiple
thereof, unless otherwise provided in the applicable Pricing Supplement.

         3A.  INTEREST RATE ON FLOATING RATE NOTES

         Unless otherwise provided in the applicable Pricing Supplement, the
provisions of this Section 3A shall apply with respect to each Supplemental
Obligation that is a Floating Rate Note.

         (a) INTEREST RATE RESET. The interest rate on such Supplemental
Obligation will be reset from time to time, as provided in this Section 3A, and
each date upon which such rate is reset as so provided is hereinafter called an
"Interest Reset Date" for such Supplemental Obligation. Unless otherwise
specified in the applicable Pricing Supplement, the Interest Reset Dates with
respect to such Supplemental Obligation will be as follows:

                  (i)  if the Interest Reset Period is daily, each
         Business Day;

                  (ii) if the Interest Reset Period is weekly and the Base Rate
         is not the treasury rate, the Wednesday of each week;

                  (iii) if the Interest Reset Period is weekly and the Base Rate
         is the treasury rate, except as otherwise provided in the definition of
         "Treasury Interest Determination Date" in Section 3A(m) below, the
         Tuesday of each week;

                  (iv) if the Interest Reset Period is monthly, the third
         Wednesday of each month;

                  (v) if the Interest Reset Period is quarterly, the third
         Wednesday of each March, June, September and December;

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                                      -14-
<PAGE>   15
                  (vi) if the Interest Reset Period is semi-annual, the third
         Wednesday of each of two months in each year specified under "interest
         reset period (or in a comparable manner) in the applicable Pricing
         Supplement; and

                  (vii) if the Interest Reset Period is annual, the third
         Wednesday of the month in each year specified under "interest reset
         period" (or in a comparable manner) in the applicable Pricing
         Supplement;

provided, however, that (x) the Base Rate in effect from the Original Issue Date
to but excluding the first Interest Reset Date will be the rate specified as the
"initial base rate" (or in a comparable manner) in the applicable Pricing
Supplement (the "Initial Base Rate" for such Supplemental Obligation) and (y) if
the Interest Reset Period is daily or weekly, the Base Rate in effect for each
day following the second Business Day immediately prior to an Interest Payment
Date to but excluding such Interest Payment Date, and for each day following the
second Business Day immediately prior to the day of Maturity of the principal of
such Supplemental Obligation to but excluding such day of Maturity, will be the
Base Rate in effect on such applicable second Business Day; and provided,
further, that, if any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be the next succeeding day that is
a Business Day, except that, unless otherwise specified on the face hereof, if
the Base Rate is LIBOR or EURIBOR and such next succeeding Business Day falls in
the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.

                  Subject to applicable provisions of law and except as
otherwise specified herein or in the applicable Pricing Supplement, on each
Interest Reset Date the interest rate on a Supplemental Obligation shall be the
rate determined in accordance with such of the following Sections 3A(b) through
3A(j) as provide for determination of the Base Rate for such Supplemental
Obligation. The Calculation Agent (as defined in Section 3C(a) below)shall
determine the interest rate of such Supplemental Obligation in accordance with
the applicable Section below.

                  Unless the Base Rate is LIBOR or EURIBOR, the Calculation
Agent will determine the interest rate of such Supplemental Obligation that
takes effect on any Interest

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<PAGE>   16
Reset Date on a day no later than the Calculation Date (as defined in Section
3A(m) below) corresponding to such Interest Reset Date. However, the Calculation
Agent need not wait until the Calculation Date to determine such interest rate
if the rate information it needs to make such determination in the manner
specified in the applicable provisions of Sections 3A(b) through 3A(j) hereof is
available from the relevant sources specified in such applicable provisions.

      Upon request of the Holder to the Calculation Agent, the Calculation Agent
will provide the interest rate then in effect on such Supplemental Obligation
and, if determined, the interest rate that will become effective on the next
Interest Reset Date.

      (b) DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate for such
Supplemental Obligation is the commercial paper rate, the Base Rate that takes
effect on any Interest Reset Date shall equal the Money Market Yield (as defined
in Section 3A(m) below) of the rate, for the second Business Day immediately
preceding such Interest Reset Date (the "Commercial Paper Interest Determination
Date"), for commercial paper having the Index Maturity, as published in
H.15(519) (as defined in Section 3A(m) below) under the heading "Commercial
Paper -- Nonfinancial". If the commercial paper rate cannot be determined as
described above, the following procedures will apply in determining the
commercial paper rate:

                  (i) If the rate described above does not appear in H.15(519)
         at 3:00 P.M., New York City time, on the Calculation Date corresponding
         to such Commercial Paper Interest Determination Date (unless the
         calculation is made earlier and the rate is available from that source
         at that time), then the commercial paper rate will be the rate, for
         such Commercial Paper Interest Determination Date, for commercial paper
         having the maturity specified as the "index maturity" (or in a
         comparable manner) in the applicable Pricing Supplement (the "Index
         Maturity" for such Supplemental Obligation), as published in H.15 Daily
         Update (as defined in Section 3A(m) below) or any other recognized
         electronic source used for displaying that rate, under the heading
         "Commercial Paper -- Nonfinancial".

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                                      -16-
<PAGE>   17
                  (ii) If the rate described in clause (i) above does not appear
         in H.15(519), H.15 Daily Update or another recognized electronic source
         at 3:00 P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), the commercial paper rate will be the Money
         Market Yield of the arithmetic mean of the following offered rates for
         U.S. dollar commercial paper that has the Index Maturity and is placed
         for an industrial issuer whose bond rating is "AA", or the equivalent,
         from a nationally recognized rating agency: the rates offered as of
         11:00 A.M., New York City time, on such Commercial Paper Interest
         Determination Date by three leading U.S. dollar commercial paper
         dealers in New York City selected by the Calculation Agent.

                  (iii) If fewer than three dealers selected by the Calculation
         Agent are quoting as described in clause (ii) above, the commercial
         paper rate shall be the commercial paper rate in effect on such
         Commercial Paper Interest Determination Date (or, in the case of the
         first Interest Reset Date, the Initial Base Rate).

     The Base Rate determined in accordance with this Section 3A(b) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any.

     (c) DETERMINATION OF PRIME RATE. If the Base Rate for such Supplemental
Obligation is the prime rate, the Base Rate that takes effect on any Interest
Reset Date shall equal the rate, for the second Business Day immediately
preceding such Interest Reset Date (the "Prime Interest Determination Date"),
published in H.15(519) under the heading "Bank Prime Loan". If the prime rate
cannot be determined as described above, the following procedures will apply in
determining the prime rate:

                  (i) If the rate described above does not appear in H.15(519)
         at 3:00 P.M., New York City time, on the Calculation Date corresponding
         to such Prime Interest Determination Date (unless the calculation is
         made earlier and the rate is available from that source at that time),
         then the prime rate will be the rate, for such Prime Interest
         Determination Date, as published in H.15

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                                      -17-

<PAGE>   18
         Daily Update or another recognized electronic source used for the
         purpose of displaying that rate, under the heading "Bank Prime Loan".

                  (ii) If the rate described in clause (i) above does not appear
         in H.15(519), H.15 Daily Update or another recognized electronic source
         at 3:00 P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), then the prime rate will be the arithmetic mean
         of the following rates as they appear on the Reuters Screen US PRIME 1
         Page (as defined in Section 3A(m) below): the rate of interest publicly
         announced by each bank appearing on that page as that bank's prime rate
         or base lending rate, as of 11:00 A.M., New York City time, on such
         Prime Interest Determination Date.

                  (iii) If fewer than four of the rates referred to in clause
         (ii) above appear on the Reuters Screen US PRIME 1 Page, the prime rate
         will be the arithmetic mean of the prime rates or base lending rates,
         as of the close of business on such Prime Interest Determination Date,
         of three major banks in New York City selected by the Calculation
         Agent. For this purpose, the Calculation Agent will use rates quoted on
         the basis of the actual number of days in the year divided by a 360-day
         year.

                  (iv) If fewer than three banks selected by the Calculation
         Agent are quoting as described in clause (iii) above, the prime rate
         shall be the prime rate in effect on such Prime Interest Determination
         Date (or, in the case of the first Interest Reset Date, the Initial
         Base Rate).

         The Base Rate determined in accordance with this Section 3A(c) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any.

         (d) DETERMINATION OF LIBOR. If the Base Rate for such Supplemental
Obligation is LIBOR, the Base Rate that takes effect on any Interest Reset Date
shall be LIBOR on the corresponding LIBOR Interest Determination Date (as

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                                      -18-
<PAGE>   19
defined in Section 3A(m) below) and shall be determined in
accordance with the following provisions:

         LIBOR will be either of the following rates, whichever appears in the
applicable Pricing Supplement:

                  (x)      the offered rate appearing on the Telerate
         LIBOR Page (as defined in Section 3A(m) below); or

                  (y) the arithmetic mean of the offered rates appearing on the
         Reuters Screen LIBOR Page (as defined in Section 3A(m) below) unless
         that page by its terms cites only one rate, in which case that rate;

in either case, as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date for deposits of the currency specified as the "index
currency" (or in a comparable manner) in the applicable Pricing Supplement (the
"Index Currency" for such Supplemental Obligation) having the Index Maturity
beginning on such Interest Reset Date. If no reference page is specified in the
applicable Pricing Supplement, Telerate LIBOR Page will apply to such
Supplemental Obligation:

                  (i) If Telerate LIBOR Page is specified in the applicable
         Pricing Supplement and the rate referenced in clause (x) above does not
         appear on that page, or if Reuters Screen LIBOR Page is specified in
         the applicable Pricing Supplement and fewer than two of the rates
         referenced in clause (y) above appear on that page or no rate appears
         on any page on which only one rate normally appears, then LIBOR will be
         determined on the basis of the rates, at approximately 11:00 A.M.,
         London time, on such LIBOR Interest Determination Date, at which
         deposits of the following kind are offered to prime banks in the London
         interbank market by four major banks in that market selected by the
         Calculation Agent: deposits of the Index Currency having the Index
         Maturity beginning on such Interest Reset Date and in a Representative
         Amount (as defined in Section 3A(m) below). The Calculation Agent will
         request the principal London office of each such bank to provide a
         quotation of its rate. If at least two quotations are provided, LIBOR
         for such

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                                      -19-
<PAGE>   20
         LIBOR Interest Determination Date will be the arithmetic mean of the
         quotations.

                  (ii) If fewer than two quotations are provided as described in
         clause (i) above, LIBOR for such LIBOR Interest Determination Date will
         be the arithmetic mean of the rates for loans of the following kind to
         leading European banks quoted, at approximately 11:00 A.M. in the
         principal financial center for the country issuing the Index Currency,
         on such LIBOR Interest Determination Date, by three major banks in that
         financial center selected by the Calculation Agent: loans of the Index
         Currency having the Index Maturity beginning on such Interest Reset
         Date and in a Representative Amount.

                  (iii) If fewer than three banks selected by the Calculation
         Agent are quoting as described in clause (ii) above, LIBOR will be the
         LIBOR in effect on such LIBOR Interest Determination Date (or, in the
         case of the first Interest Reset Date, the Initial Base Rate).

         The Base Rate determined in accordance with this Section 3A(d) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any. If the Base Rate is LIBOR and
no currency is specified in the applicable Pricing Supplement as the index
currency, the Index Currency shall be U.S. dollars.

         (e) DETERMINATION OF EURIBOR. If the Base Rate for such Supplemental
Obligation is EURIBOR, the Base Rate that takes effect on any Interest Reset
Date shall equal the interest rate for deposits in euros designated as "EURIBOR"
and sponsored jointly by the European Banking Federation and ACI -- the
Financial Market Association (or any company established by the joint sponsors
for purposes of compiling and publishing that rate) on the second Euro Business
Day (as defined in Section 3C(b) below) before such Interest Reset Date (a
"EURIBOR Interest Determination Date"), and will be determined in accordance
with the following provisions:

                  (i) EURIBOR will be the offered rate for deposits in euros
         having the Index Maturity beginning on

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                                      -20-

<PAGE>   21
         such Interest Reset Date, as that rate appears on Telerate Page 248 (as
         defined in Section 3A(m) below) as of 11:00 A.M., Brussels time, on
         such EURIBOR Interest Determination Date.

                  (ii) If the rate described in clause (i) above does not appear
         on Telerate Page 248, EURIBOR will be determined on the basis of the
         rates, at approximately 11:00 A.M., Brussels time, on such EURIBOR
         Interest Determination Date, at which deposits of the following kind
         are offered to prime banks in the Euro-Zone (as defined in Section
         3C(b) below) interbank market by the principal Euro-Zone office of each
         of four major banks in that market selected by the Calculation Agent:
         euro deposits having the Index Maturity beginning on such Interest
         Reset Date and in a Representative Amount. The Calculation Agent will
         request the principal Euro-Zone office of each of these banks to
         provide a quotation of its rate. If at least two quotations are
         provided, EURIBOR for such EURIBOR Interest Determination Date will be
         the arithmetic mean of such quotations.

                  (iii) If fewer than two quotations are provided as described
         in clause (ii) above, EURIBOR for such EURIBOR Interest Determination
         Date will be the arithmetic mean of the rates for loans of the
         following kind to leading Euro-Zone banks quoted, at approximately
         11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date,
         by three major banks in the Euro-Zone selected by the Calculation
         Agent: loans of euros having the Index Maturity beginning on such
         Interest Reset Date and in a Representative Amount.

                  (iv) If fewer than three banks selected by the Calculation
         Agent are quoting as described in clause (iii) above, EURIBOR shall be
         the EURIBOR in effect on such EURIBOR Interest Determination Date (or,
         in the case of the first Interest Reset Date, the Initial Base Rate).

         The Base Rate determined in accordance with this Section 3A(e) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any.

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                                      -21-

<PAGE>   22
         (f) DETERMINATION OF TREASURY RATE. If the Base Rate for such
Supplemental Obligation is the treasury rate, the Base Rate that takes effect on
any Interest Reset Date shall equal the rate for the auction on the
corresponding Treasury Interest Determination Date (as defined in Section 3A(m)
below) of direct obligations of the United States ("Treasury Bills") having the
Index Maturity, as that rate appears on Telerate Page 56 or 57 under the heading
"Investment Rate". If the treasury rate cannot be determined as described above,
the following procedures will apply in determining the treasury rate:

                  (i) If the rate described above does not appear on either
         Telerate Page 56 or 57 at 3:00 P.M., New York City time, on the
         Calculation Date corresponding to such Treasury Interest Determination
         Date (unless the calculation is made earlier and the rate is available
         from that source at that time), the treasury rate will be the Bond
         Equivalent Yield (as defined in Section 3A(m) below) of the rate, for
         such Treasury Interest Determination Date and for Treasury Bills having
         the Index Maturity, as published in H.15 Daily Update, or another
         recognized electronic source used for displaying that rate, under the
         heading "U.S. Government Securities/Treasury Bills/Auction High".

                  (ii) If the rate described in clause (i) above does not appear
         in H.15 Daily Update or another recognized electronic source at 3:00
         P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), the Treasury Rate will be the Bond Equivalent
         Yield of the auction rate, for such Treasury Interest Determination
         Date and for Treasury Bills having the Index Maturity, as announced by
         the U.S. Department of the Treasury.

                  (iii) If the auction rate described in clause (ii) above is
         not so announced by 3:00 P.M., New York City time, on such Calculation
         Date, or if no such auction is held for the relevant week, then the
         Treasury Rate will be the Bond Equivalent Yield of the rate, for such
         Treasury Interest Determination Date and for Treasury Bills having a
         remaining maturity closest to the Index Maturity, as published in
         H.15(519) under the heading "U.S. Government Securities/Treasury
         Bills/Secondary Market".

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                                      -22-

<PAGE>   23
                  (iv) If the rate described in clause (iii) above does not
         appear in H.15(519) at 3:00 P.M., New York City time, on such
         Calculation Date (unless the calculation is made earlier and the rate
         is available from one of those sources at that time), then the treasury
         rate will be the rate, for such Treasury Interest Determination Date
         and for Treasury Bills having a remaining maturity closest to the Index
         Maturity, as published in H.15 Daily Update, or another recognized
         electronic source used for displaying that rate, under the heading
         "U.S. Government Securities/Treasury Bills/Secondary Market".

                  (v) If the rate described in clause (iv) above does not appear
         in H.15 Daily Update or another recognized electronic source at 3:00
         P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), the treasury rate will be the Bond Equivalent
         Yield of the arithmetic mean of the following secondary market bid
         rates for the issue of Treasury Bills with a remaining maturity closest
         to the Index Maturity: the rates bid as of approximately 3:30 P.M., New
         York City time, on such Treasury Interest Determination Date, by three
         primary U.S. government securities dealers in New York City selected by
         the Calculation Agent.

                  (vi) If fewer than three dealers selected by the Calculation
         Agent are quoting as described in clause (v) above, the Treasury Rate
         shall be the treasury rate in effect on such Treasury Interest
         Determination Date (or, in the case of the first Interest Reset Date,
         the Initial Base Rate).

         The Base Rate determined in accordance with this Section 3A(f) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any, specified.

         (g) DETERMINATION OF CMT RATE. If the Base Rate for such Supplemental
Obligation is the CMT rate, the Base Rate that takes effect on any Interest
Reset Date shall equal the CMT rate on the second Business Day immediately
preceding such Interest Reset Date (the "CMT Interest Determination Date"). "CMT
rate" means the following rate displayed on the Designated CMT Telerate Page (as
defined in

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                                      -23-

<PAGE>   24
Section 3A(m) below) under the heading " . . . Treasury
Constant Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 P.M.", under the
column for the Designated CMT Index Maturity (as defined in
Section 3A(m) below):

                  (x) if the Designated CMT Telerate Page is Telerate Page 7051,
         the rate for such CMT Interest Determination Date; or

                  (y) if the Designated CMT Telerate Page is Telerate Page 7052,
         the weekly or monthly average, as specified on the face hereof, for the
         week that ends immediately before the week in which such CMT Interest
         Determination Date falls, or for the month that ends immediately before
         the month in which such CMT Interest Determination Date falls, as
         applicable.

If the CMT rate cannot be determined as described above, the following
procedures will apply in determining the CMT rate:

                  (i) If the applicable rate described above is not displayed on
         the relevant Designated CMT Telerate Page at 3:00 P.M., New York City
         time, on the Calculation Date corresponding to such CMT Interest
         Determination Date (unless the calculation is made earlier and the rate
         is available from that source at that time), then the CMT rate will be
         the applicable Treasury constant maturity rate described above -- i.e.,
         for the Designated CMT Index Maturity and for either such CMT Interest
         Determination Date or the weekly or monthly average, as applicable --
         as published in H.15(519).

                  (ii) If the applicable rate described in clause (i) above does
         not appear in H.15(519) at 3:00 P.M., New York City time, on such
         Calculation Date (unless the calculation is made earlier and the rate
         is available from that source at that time), then the CMT rate will be
         the Treasury constant maturity rate, or other U.S. Treasury rate, for
         the Designated CMT Index Maturity and with reference to such CMT
         Interest Determination Date, that:

                           (a) is published by the Board of Governors
                  of the Federal Reserve System, or the U.S. Department
                  of the Treasury, and

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                                      -24-

<PAGE>   25
                           (b) is determined by the Calculation Agent to be
                  comparable to the applicable rate formerly displayed on the
                  Designated CMT Telerate Page and published in H.15(519).

                  (iii) If the rate described in clause (ii) above does not
         appear in H.15(519) at 3:00 P.M., New York City time, on such
         Calculation Date (unless the calculation is made earlier and the rate
         is available from that source at that time), then the CMT rate will be
         the yield to maturity of the arithmetic mean of the following secondary
         market offered rates for the most recently issued Treasury Notes (as
         defined in Section 3A(m) below) having an original maturity of
         approximately the Designated CMT Index Maturity, having a remaining
         term to maturity of not less than the Designated CMT Index Maturity
         minus one year and in a Representative Amount: the offered rates, as of
         approximately 3:30 P.M., New York City time, on such CMT Interest
         Determination Date, of three primary U.S. government securities dealers
         in New York City selected by the Calculation Agent. In selecting such
         offered rates, the Calculation Agent will request quotations from five
         such primary dealers and will disregard the highest quotation -- or, if
         there is equality, one of the highest -- and the lowest quotation --
         or, if there is equality, one of the lowest.

                  (iv) If the Calculation Agent is unable to obtain three
         quotations of the kind described in clause (iii) above, the CMT rate
         will be the yield to maturity of the arithmetic mean of the following
         secondary market offered rates for Treasury Notes having an original
         maturity longer than the Designated CMT Index Maturity, having a
         remaining term to maturity closest to the Designated CMT Index Maturity
         and in a Representative Amount: the offered rates, as of approximately
         3:30 P.M., New York City time, on such CMT Interest Determination Date,
         of three primary U.S. government securities dealers in New York City
         selected by the Calculation Agent. In selecting such offered rates, the
         Calculation Agent will request quotations from five such primary
         dealers and will disregard the highest quotation -- or, if there is
         equality, one of the highest -- and the lowest quotation -- or, if
         there is equality, one of the lowest. If two Treasury Notes with an
         original maturity longer than the CMT

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                                      -25-

<PAGE>   26
         Designated Index Maturity have remaining terms to maturity that are
         equally close to the Designated CMT Index Maturity, the Calculation
         Agent will obtain quotations for the Treasury Note with the shorter
         remaining term to maturity.

                  (v) If fewer than five but more than two such primary dealers
         are quoting as described in clause (iv) above, then the CMT rate for
         such CMT Interest Determination Date will be based on the arithmetic
         mean of the offered rates so obtained, and neither the highest nor the
         lowest of such quotations will be disregarded.

                  (vi) If two or fewer primary dealers selected by the
         Calculation Agent are quoting as described in clause (v) above, the CMT
         rate shall be the CMT rate in effect on such CMT Interest Determination
         Date (or, in the case of the first Interest Reset Date, the Initial
         Base Rate).

         The Base Rate determined in accordance with this Section 3A(g) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any.

         (h) DETERMINATION OF CD RATE. If the Base Rate for such Supplemental
Obligation is the CD rate, the Base Rate that takes effect on any Interest Reset
Date shall equal the rate, on the second Business Day immediately preceding such
Interest Reset Date (the "CD Interest Determination Date"), for negotiable U.S.
dollar certificates of deposit having the Index Maturity as published in
H.15(519) under the heading "CDs (Secondary Market)". If the CD rate cannot be
determined as described above, the following procedures will apply in
determining the CD rate:

                  (i) If the rate described above does not appear in H.15(519)
         at 3:00 P.M., New York City time, on the Calculation Date corresponding
         to such CD Interest Determination Date (unless the calculation is made
         earlier and the rate is available from that source at that time), then
         the CD rate shall be the rate described above as published in H.15
         Daily Update, or another recognized electronic source used for

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                                      -26-
<PAGE>   27
         displaying that rate, under the heading "CDs (Secondary Market)".

                  (ii) If the rate described in clause (i) above does not appear
         in H.15(519), H.15 Daily Update or another recognized electronic source
         at 3:00 P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), then the CD rate shall be the arithmetic mean of
         the following secondary market offered rates for negotiable U.S. dollar
         certificates of deposit of major U.S. money center banks having a
         remaining maturity closest to the Index Maturity and in a
         Representative Amount: the rates offered as of 10:00 A.M., New York
         City time, on such CD Interest Determination Date, by three leading
         nonbank dealers in negotiable U.S. dollar certificates of deposit in
         New York City, as selected by the Calculation Agent.

                  (iii) If fewer than three dealers selected by the Calculation
         Agent are quoting as described in clause (ii) above, the CD rate will
         be the CD rate in effect on such CD Interest Determination Date (or, in
         the case of the first Base Reset Date, the Initial Base Rate).

     The Base Rate determined in accordance with this Section 3A(h) will be
adjusted by the addition or subtraction of the Spread, if any, or by multiplying
such Base Rate by the Spread Multiplier, if any.

                  (i) DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate for
such Supplemental Obligation is the federal funds rate, the Base Rate that takes
effect on any Interest Reset Date shall equal the rate, on the second Business
Day immediately preceding such Interest Reset Date (the "Federal Funds Interest
Determination Date"), for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)", as that rate is displayed on Telerate Page
120. If the federal funds rate cannot be determined as described above, the
following procedures will apply in determining the federal funds rate:

                  (i) If the rate described above is not displayed on Telerate
         Page 120 at 3:00 P.M., New York City time, on the Calculation Date
         corresponding to such Federal Funds Interest Determination Date (unless
         the

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                                      -27-
<PAGE>   28
         calculation is made earlier and the rate is available from that source
         at that time), then the federal funds rate will be the rate described
         above as published in H.15 Daily Update, or another recognized
         electronic source used for displaying that rate, under the heading
         "Federal Funds (Effective)".

                  (ii) If the rate described in clause (i) above is not
         displayed on Telerate Page 120 and does not appear in H.15 (519), H.15
         Daily Update or another recognized electronic source at 3:00 P.M., New
         York City time, on such Calculation Date (unless the calculation is
         made earlier and the rate is available from one of those sources at
         that time), the federal funds rate will be the arithmetic mean of the
         rates for the last transaction in overnight, U.S. dollar federal funds
         arranged, before 9:00 A.M., New York City time, on such Federal Funds
         Interest Determination Date, by three leading brokers of U.S. dollar
         federal funds transactions in New York City selected by the Calculation
         Agent.

                  (iii) If fewer than three brokers selected by the Calculation
         Agent are quoting as described in clause (ii) above, the federal funds
         rate will be the federal funds rate in effect on such Federal Funds
         Interest Determination Date (or, in the case of the first Interest
         Reset Date, the Initial Base Rate).

         The interest rate determined in accordance with this Section 3A(i) will
be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any.

         (j) DETERMINATION OF 11TH DISTRICT RATE. If the Base Rate for such
Supplemental Obligation is the 11th district rate (which term refers to the
Eleventh Federal Home Loan District Cost of Funds Rate), the Base Rate that
takes effect on any Interest Reset Date shall equal the 11th district rate on
the 11th District Interest Determination Date (as defined in Section 3A(m)
below) corresponding to such Interest Reset Date. The 11th district rate on any
11th District Interest Determination Date shall be the rate equal to the monthly
weighted average cost of funds for the calendar month immediately before such
date, as displayed on Telerate Page 7058 under the heading "11th District" as of
11:00 A.M., San Francisco time, on such date. If the 11th

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                                      -28-
<PAGE>   29
district rate cannot be determined as described above, the following procedures
will apply in determining the 11th district rate:

                  (i) If the rate described above does not appear on Telerate
         Page 7058 on such 11th District Interest Determination Date, then the
         11th district rate on such date will be the monthly weighted average
         cost of funds paid by institutions that are members of the Eleventh
         Federal Home Loan District for the calendar month immediately preceding
         such date, as most recently announced by the Federal Home Loan Bank of
         San Francisco as such monthly weighted average cost of funds.

                  (ii) If the Federal Home Loan Bank of San Francisco fails to
         announce the cost of funds described in clause (i) above on or before
         such 11th District Interest Determination Date, the 11th district rate
         that takes effect on such Interest Reset Date will be the 11th district
         rate in effect on such 11th District Interest Determination Date (or,
         in the case of the first Interest Reset Date, the Initial Base Rate).

          The interest rate determined in accordance with this Section 3A(j)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any.

          (k) MINIMUM AND MAXIMUM LIMITS. Notwithstanding the foregoing, the
rate at which interest accrues on such Supplemental Obligation (i) shall not at
any time be higher than the maximum rate, if any, or less than the minimum rate,
if any, specified in the applicable Pricing Supplement, in each case on an
accrual basis, and (ii) shall not at any time be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.

          (l) CALCULATION OF INTEREST. Payments of interest on such Supplemental
Obligation with respect to any Interest Payment Date or at the Maturity of the
principal thereof will include interest accrued to but excluding such Interest
Payment Date or the date of such Maturity, as the case may be. Accrued interest
from the date of issue or from the last date to which interest has been paid or
duly provided for shall be calculated by the Calculation Agent by

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                                      -29-
<PAGE>   30
multiplying the principal amount for such Supplemental Obligation by an accrued
interest factor. Such accrued interest factor shall be computed by adding the
interest factors calculated for each day from and including the Original Issue
Date or from and including the last date to which interest has been paid or duly
provided for, to but excluding the date for which accrued interest is being
calculated. The interest factor for each such day shall be expressed as a
decimal and computed by dividing the interest rate (also expressed as a decimal)
in effect on such day by 360, if the Base Rate is the commercial paper rate,
prime rate, LIBOR, EURIBOR, CD rate, federal funds rate or 11th district rate,
or by the actual number of days in the year, if the Base Rate is the treasury
rate or CMT rate.

          All percentages resulting from any calculation with respect to such
Supplemental Obligation will be rounded upward or downward, as appropriate, to
the next higher or lower one hundred-thousandth of a percentage point (e.g.,
9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and
9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655)). All
amounts used in or resulting from any calculation with respect to such
Supplemental Obligation will be rounded upward or downward, as appropriate, to
the nearest cent, in the case of U.S. dollars, or to the nearest corresponding
hundredth of a unit, in the case of a currency other than U.S. dollars, with
one-half cent or one-half of a corresponding hundredth of a unit or more being
rounded upward.

          (m) DEFINITIONS OF CALCULATION TERMS. As used with respect to such
Supplemental Obligation, the following terms have the meanings set forth below:

          "Bond Equivalent Yield" means a yield expressed as a percentage and
calculated in accordance with the following formula:

         Bond Equivalent Yield =   D x N
                                 ----------    x 100,
                                360 - (D x M)

         where

         -        "D" equals the annual rate for Treasury Bills
                  quoted on a bank discount basis and expressed as a
                  decimal;

                  (Reverse of Security continued on next page)

                                      -30-
<PAGE>   31
         -        "N" equals 365 or 366, as the case may be; and

         -        "M" equals the actual number of days in the period from and
                  including the relevant Interest Reset Date to but excluding
                  the next succeeding Interest Reset Date.

         The "Calculation Date" corresponding to any Commercial Paper Interest
Determination Date, Prime Interest Determination Date, LIBOR Interest
Determination Date, EURIBOR Interest Determination Date, Treasury Interest
Determination Date, CMT Interest Determination Date, CD Interest Determination
Date, Federal Funds Interest Determination Date or 11th District Interest
Determination Date, as the case may be, means the earlier of:

                  (i) the tenth day after such interest determination date or,
         if any such day is not a Business Day, the next succeeding Business
         Day; and

                  (ii) the Business Day immediately preceding the Interest
         Payment Date or the date of Maturity of the principal hereof, whichever
         is the day on which the next payment of interest will be due.

The Calculation Date corresponding to any Interest Reset Date means the
Calculation Date corresponding to the relevant interest determination date
immediately preceding such Interest Reset Date.

                  "Designated CMT Index Maturity" means, if the Base Rate is the
CMT Rate, the Index Maturity for such Security and will be the original period
to maturity of a U.S. Treasury security -- either 1, 2, 3, 5, 7, 10, 20 or 30
years -- specified on the face hereof, provided that, if no such original
maturity period is so specified, the Designated CMT Index Maturity will be 2
years.

                  "Designated CMT Telerate Page" means, if the Base Rate is the
CMT Rate, the Telerate Page specified in the applicable Pricing Supplement that
displays Treasury constant maturities as reported in H.15(519), provided that,
if no Telerate Page is so specified, then the applicable page will be Telerate
Page 7052 and provided, further, that if Telerate Page 7052 applies but it is
not specified in the applicable Pricing Supplement whether the weekly or monthly
average applies, the weekly average will apply.

                  (Reverse of Security continued on next page)

                                      -31-
<PAGE>   32
     The "11th District Interest Determination Date" corresponding to a
particular Interest Reset Date will be the last working day, in the first
calendar month immediately preceding such Interest Reset Date, on which the
Federal Home Loan Bank of San Francisco publishes the monthly average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District for the second calendar month immediately preceding such Interest Reset
Date.

     "H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15 (519)", or any successor publication, published by the Board of
Governors of the Federal Reserve System.

     "H.15 Daily Update" means the daily update of H.15 (519) available through
the worldwide web site of the Board of Governors of the Federal Reserve System,
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.

     The "LIBOR Interest Determination Date" corresponding to any Interest Reset
Date means the second London Business Day preceding such Interest Reset Date,
unless the Index Currency is pounds sterling, in which case the LIBOR Interest
Determination Date will be the Interest Reset Date.

     "London Business Day" means any day on which dealings in the Index Currency
are transacted in the London interbank market.

     "Money Market Yield" means a yield expressed as a percentage and calculated
in accordance with the following formula:

                  Money Market Yield =           D x 360      x 100,
                                             -------------
                                             360 - (D x M)

         where

         -        "D" equals the per annum rate for commercial paper
                  quoted on a bank discount basis and expressed as a
                  decimal; and

         -        "M" equals the actual number of days in the period
                  from and including the relevant Interest Reset

                  (Reverse of Security continued on next page)

                                      -32-
<PAGE>   33
     Date to but excluding the next succeeding Interest Reset Date.

     "Representative Amount" means an amount that, in the Calculation Agent's
judgment, is representative of a single transaction in the relevant market at
the relevant time.

     "Reuters Screen LIBOR Page" means the display on the Reuters Monitor Money
Rates Service, or any successor service, on the page designated as "LIBOR" or
any replacement page or pages on which London interbank rates of major banks for
the Index Currency are displayed.

     "Reuters Screen US PRIME 1 Page" means the display on the "US PRIME 1" page
on the Reuters Monitor Money Rates Service, or any successor service, or any
replacement page or pages on that service, for the purpose of displaying prime
rates or base lending rates of major U.S. banks.

     "Telerate LIBOR Page" means Telerate Page 3750 or any replacement page or
pages on which London interbank rates of major banks for the Index Currency are
displayed.

     "Telerate Page" means the display on Bridge Telerate, Inc., or any
successor service, on the page or pages specified on the face hereof, or any
replacement page or pages on that service.

     The "Treasury Interest Determination Date" corresponding to any Interest
Reset Date means the day of the week in which such Interest Reset Date falls on
which Treasury bills would normally be auctioned. If, as the result of a legal
holiday, an auction is so held on the Friday in the week immediately preceding
the week in which such Interest Reset Day falls, such Friday will be the
corresponding Treasury Interest Determination Date. If an auction date shall
fall on a day that would otherwise be an Interest Reset Date, then such Interest
Reset Date shall instead be the first Business Day immediately following such
auction date.

     "Treasury Notes" means direct, noncallable, fixed rate obligations of the
U.S. government.

     References in this Security to a particular heading or headings on any of
Designated CMT Telerate Page,

                  (Reverse of Security continued on next page)

                                      -33-
<PAGE>   34
H.15(519), H.15 Daily Update, Reuters Screen LIBOR Page, Reuters Screen US Prime
1 Page, Telerate LIBOR Page or Telerate Page include any successor or
replacement heading or headings as determined by the Calculation Agent.

         3B. INTEREST RATE ON INDEXED NOTES

         In the case of any Supplemental Obligation that is an Indexed Note, the
manner of calculating interest payable thereon shall be determined as provided
in the applicable Pricing Supplement.

         3C. PAYMENTS - OTHER TERMS

         The provisions of this Section 3C apply to all Supplemental
Obligations.

         (a) CALCULATION AGENT AND EXCHANGE RATE AGENT. With respect to any
Supplemental Obligation, the "Calculation Agent" or the "Exchange Ratio Agent"
shall initially mean the Person (if any) named as such agent in the applicable
Pricing Supplement, provided that the Company may, in its sole discretion,
appoint any other institution (including any Affiliate of the Company) to serve
as any such agent for such Supplemental Obligation from time to time. The
Company will give the Trustee prompt written notice of any change in any such
appointment. Insofar as this Security or the applicable Pricing Supplement
provides for any such agent to obtain rates, quotes or other data from a bank,
dealer or other institution for use in making any determination hereunder, such
agent may do so from any institution or institutions of the kind contemplated
hereby notwithstanding that any one or more of such institutions are any such
agent, Affiliates of any such agent or Affiliates of the Company.

         All determinations made by the Calculation Agent or the Exchange Rate
Agent with regard to a Supplemental Obligation may be made by such agent in its
sole discretion and, absent manifest error, shall be conclusive for all purposes
and binding on the Holder of this Security and the Company. Neither the
Calculation Agent nor the Exchange Rate Agent shall have any liability therefor.

         (b) OTHER DEFINITIONS. "Business Day" means, for any Supplemental
Obligation, a day that meets the requirements set forth in each of clauses (i)
through (iv)

                  (Reverse of Security continued on next page)

                                      -34-
<PAGE>   35
below, in each case to the extent such requirements apply to such Supplemental
Obligation as specified below:

                  (i)          is a Monday, Tuesday, Wednesday, Thursday or
                               Friday that is not a day on which banking
                               institutions in The City of New York generally
                               are authorized or obligated by law, regulation or
                               executive order to close;

                  (ii)         if the Base Rate is LIBOR, is also a London
                               Business Day;

                  (iii)        if the Specified Currency for payment of
                               principal of or interest on such Security is
                               other than U.S. dollars or euros, is also a day
                               on which banking institutions in the principal
                               financial center of the country issuing such
                               Specified Currency generally are not authorized
                               or obligated by law, regulation or executive
                               order to close;

                  (iv)         if the Base Rate is EURIBOR or if the Specified
                               Currency for payment of principal of or interest
                               on such Security is euros, or the Base Rate is
                               LIBOR for which the Index Currency is euros, is
                               also a Euro Business Day; and

                  (v)          solely with respect to any payment or other
                               action to be made or taken at any Place of
                               Payment outside The City of New York, is a
                               Monday, Tuesday, Wednesday, Thursday or Friday
                               that is not a day on which banking institutions
                               in such Place of Payment generally are authorized
                               or obligated by law, regulation or executive
                               order to close.

Solely when used in the third paragraph under the heading "Currency of Payment"
on the face of this Security, the meaning of the term "Business Day" shall be
determined as if the Base Rate for the relevant Supplemental Obligation is
neither LIBOR nor EURIBOR. With respect to any particular location, the close of
business on any day on which business

                  (Reverse of Security continued on next page)

                                      -35-
<PAGE>   36
is not being conducted at that location shall be deemed to mean 5:00 P.M., New
York City time, on that day.

         "EMU Countries" means, at any time, the countries (if any) then
participating in the European Economic and Monetary Union (or any successor
union) pursuant to the Treaty on European Union of February 1992 (or any
successor treaty), as it may be amended from time to time.

         "Euro Business Day" means any day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System, or any successor
system, is open for business.

         "Euro-Zone" means, at any time, the region comprised of the EMU
Countries.

         References in this Security to U.S. dollars shall mean, as of any time,
the coin or currency that is then legal tender for the payment of public and
private debts in the United States of America.

         References in this Security to the euro shall mean, as of any time, the
coin or currency (if any) that is then legal tender for the payment of public
and private debts in all EMU Countries.

         With respect to any Supplemental Obligation, references in this
Security to a particular currency other than U.S. dollars and euros shall mean,
as of any time, the coin or currency that is then legal tender for the payment
of public and private debts in the country issuing such currency on the Original
Issue Date for such Supplemental Obligation.

         4. REDEMPTION AT THE COMPANY'S OPTION

         Unless a redemption commencement date is specified in the applicable
Pricing Supplement, a Supplemental Obligation shall not be redeemable at the
option of the Company before the Stated Maturity of the principal thereof. If a
redemption commencement date is so specified, and unless otherwise specified in
the applicable Pricing Supplement, such Supplemental Obligation is subject to
redemption upon not less than 30 days' nor more than 60 days' notice at any time
and from time to time on or after the redemption commencement date, in each case
as a whole or

                  (Reverse of Security continued on next page)

                                      -36-
<PAGE>   37
in part, at the election of the Company and at the redemption price specified in
the applicable Pricing Supplement (expressed as a percentage of the principal
amount of such Supplemental Obligation to be redeemed), together with accrued
interest to the Redemption Date, but interest installments due on or prior to
such Redemption Date will be payable to the Holder of this Security, or one or
more Predecessor Securities, of record at the close of business on the relevant
record date, all as provided in the Indenture.

          5. REPAYMENT AT THE HOLDER'S OPTION

          Except as otherwise may be provided in the applicable Pricing
Supplement, if one or more repayment dates are specified in the applicable
Pricing Supplement, the principal of a Supplemental Obligation will be repayable
in whole or in part in an amount equal to any Authorized Denomination (provided
that the remaining principal amount of any Supplemental Obligation surrendered
for partial repayment shall at least equal an Authorized Denomination), on any
such repayment date, in each case at the option of the Holder and at the
applicable repayment price specified in the applicable Pricing Supplement
(expressed as a percentage of the principal amount to be repaid), together with
accrued interest to the applicable repayment date (but interest installments due
on or prior to such repayment date will be payable to the Holder of this
Security, or one or more predecessor securities, of record at the close of
business on the relevant Regular Record Date as provided in the Indenture). With
respect to any Supplemental Obligation, if the applicable Pricing Supplement
provides for more than one repayment date and the Holder exercises its option to
elect repayment, the Holder shall be deemed to have elected repayment on the
earliest repayment date after all conditions to such exercise have been
satisfied, and references herein to the applicable repayment date shall mean
such earliest repayment date.

          In order for the exercise of such option to be effective and the
principal amount of a Supplemental Obligation to be repaid, the Company must
receive at the applicable address of the Trustee set forth below (or at such
other place or places of which the Company shall from time to time notify the
Holder of this Security), on any Business Day not later than the 15th, and not
earlier than the 25th, calendar day prior to the applicable repayment

                  (Reverse of Security continued on next page)

                                      -37-
<PAGE>   38
date (or, if either such calendar day is not a Business Day, the next succeeding
Business Day), either (i) the form below entitled "Option to Elect Repayment"
duly completed and signed, or (ii) a facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc., a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the Holder of this Security, (b) the principal amount of such Supplemental
Obligation and the portion thereof to be repaid, (c) a statement that the option
to elect repayment is being exercised thereby and (d) a guarantee stating that
the Company will receive the form below entitled "Option to Elect Repayment"
duly completed and signed, not later than five Business Days after the date of
such facsimile transmission or letter (provided that such form duly completed
and signed is received by the Company by such fifth Business Day). Any such
election shall be irrevocable. The address to which such deliveries are to be
made is The Bank of New York, Attention: Corporation Trust Trustee
Administration, 101 Barclay Street, New York, New York 10286 (or at such other
places as the Company or the Trustee shall notify the Holder of this Security).
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Supplemental Obligation for repayment will be determined by
the Company, whose determination will be final and binding. Notwithstanding the
foregoing, the option of the Holder to elect repayment may be exercised in
accordance with the Applicable Procedures of the Depositary for this Security at
least 15 calendar days prior to the applicable repayment date and the option of
the Holder to elect repayment may be exercised in any such manner as the Company
may approve.

          6. TRANSFER AND EXCHANGE

          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
office or agency of the Company in any place where the principal of and any
premium and interest on 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 or
her attorney duly authorized in writing, and thereupon one or more new
Securities of this series and

                  (Reverse of Security continued on next page)

                                      -38-
<PAGE>   39
of like tenor, of Authorized Denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

         As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
Authorized Denomination, as requested by the Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the 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 Trustee and any agent of the Company 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 nor
the Trustee nor any such agent shall be affected by notice to the contrary.

         This Security shall be subject to the provisions of the Indenture
relating to Global Securities, including the limitations in Section 305 thereof
on transfers and exchanges of Global Securities.

         This Security is a Master Note and may be exchanged at any time, solely
upon the request of the Company to the Trustee, for one or more Global
Securities in the same aggregate principal amount, each of which may or may not
be a Master Note, as requested by the Company. Each such replacement Global
Security that is a Master Note shall reflect such of the Supplemental
Obligations as the Company shall request. Each such replacement Global Security
that is not a Master Note shall represent one (and only one) Supplemental
Obligation as requested by the Company, and such Global Security shall be
appropriately modified so as to reflect the terms of such Supplemental
Obligation.

         7. DEFEASANCE

         The Indenture contains provisions for defeasance at any time of the
entire indebtedness of a Security of this series or certain restrictive
covenants and Events of

                  (Reverse of Security continued on next page)

                                      -39-
<PAGE>   40
Default with respect to a Security of this series, in each case upon compliance
with certain conditions set forth in the Indenture. If so specified in the
applicable Pricing Supplement, either or both of such provisions are applicable
to a Supplemental Obligation, as so specified.

         8. REMEDIES

         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.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity reasonably satisfactory to
it, and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.

         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, place and rate, and in the coin or
currency, herein prescribed.

                  (Reverse of Security continued on next page)

                                      -40-
<PAGE>   41
     9. MODIFICATION AND WAIVER

     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 Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected (considered together as one
class for this purpose). The Indenture also contains provisions (i) permitting
the Holders of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected under the Indenture (considered
together as one class for this purpose), on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and (ii) permitting the Holders of a majority in
principal amount of the Securities at the time Outstanding of any series to be
affected under the Indenture (with each such series considered separately for
this purpose), on behalf of the Holders of all Securities of such series, to
waive 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.

     10. GOVERNING LAW

     THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  (Reverse of Security continued on next page)

                                      -41-
<PAGE>   42
                                                MASTER NOTE CUSIP NO. __________
                                             SUPPLEMENTAL OBLIGATION: __________
                               Pricing Supplement No. and Date: ________________
                                           Original Issue Date: ________________

                          THE GOLDMAN SACHS GROUP, INC.
                           MEDIUM-TERM NOTE, SERIES B
                                  (Master Note)

                            OPTION TO ELECT REPAYMENT

               TO BE COMPLETED ONLY IF THE SUPPLEMENTAL OBLIGATION
                            REFERENCED IN THIS NOTICE
                  IS REPAYABLE AT THE OPTION OF THE HOLDER AND
                    THE HOLDER ELECTS TO EXERCISE SUCH RIGHT

     The undersigned hereby irrevocably requests and instructs the Company to
repay the Supplemental Obligation referred to in this notice (or the portion
thereof specified below) at the applicable repayment price, together with
interest to the repayment date, all as provided for in such Supplemental
Obligation, to the undersigned, whose name, address and telephone number are as
follows:

-------------------------------------------------------------------------------
                     (please print name of the undersigned)

-------------------------------------------------------------------------------
                    (please print address of the undersigned)

-------------------------------------------------------------------------------
               (please print telephone number of the undersigned)

     If such Supplemental Obligation provides for more than one repayment date,
the undersigned requests repayment on the earliest repayment date after the
requirements for exercising this option have been satisfied, and references in
this notice to the repayment date mean such earliest repayment date. Terms used
in this notice that are defined in the Security specified above are used herein
as defined therein.

     For such Supplemental Obligation to be repaid the Company must receive at
the applicable address of the Trustee set forth below or at such other place or
places of which the Company or the Trustee shall from time to time notify the
Holder of such Security, any Business Day not

                  (Reverse of Security continued on next page)

                                      -42-
<PAGE>   43
later than the 15th or earlier than the 25th calendar day prior to the Repayment
Date (or, if either such calendar day is not a Business Day, the next succeeding
Business Day), (i) this "Option to Elect Repayment" form duly completed and
signed, or (ii) a facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc., a
commercial bank or a trust company in the United States of America setting forth
(a) the name, address and telephone number of the Holder of such Security, (b)
the principal amount of such Supplemental Obligation and the amount of such
Supplemental Obligation to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby and (d) a guarantee stating that the form
entitled "Option to Elect Repayment" on the addendum to such Security duly
completed and signed will be received by the Company not later than five
Business Days after the date of such facsimile transmission or letter (provided
that such form duly completed and signed are received by the Company by such
fifth Business Day). The address to which such deliveries are to be made is:

                  The Bank of New York
                  Attention: Corporation Trust Trustee Administration
                  101 Barclay Street
                  New York, New York 10286

or at such other places as the Company or the Trustee shall notify the holder of
such Security.

                  (Reverse of Security continued on next page)

                                      -43-
<PAGE>   44
                  If less than the entire principal amount of such Supplemental
Obligation is to be repaid, specify the portion thereof (which shall equal any
Authorized Denomination) that the Holder elects to have repaid:

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

Date:
     -----------------------------               ------------------------------
                                                 Notice: The signature to this
                                                 Option to Elect Repayment must
                                                 correspond with the name of
                                                 the Holder as written on the
                                                 face of such Security in every
                                                 particular without alteration
                                                 or enlargement or any other
                                                 change whatsoever.

                  (Reverse of Security continued on next page)

                                      -44-
<PAGE>   45
                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations.

                  TEN COM - as tenants in common

                  TEN ENT - as tenants by the entireties

                  JT TEN - as joint tenants with the right of
                               survivorship and not as tenants
                               in common

                  UNIF GIFT MIN ACT - __________ Custodian _________
                                        (Cust)              (Minor)

                        under Uniform Gifts to Minors Act

                         ------------------------------
                                     (State)

                    Additional abbreviations may also be used
                          though not in the above list.

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

                  (Reverse of Security continued on next page)

                                      -45-
<PAGE>   46
                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
                 ------------

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

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

[GRAPHIC OMITTED]

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

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

                   (Please Print or Typewrite Name and Address
                     Including Postal Zip Code of Assignee)

--------------------------------------------------------------------------------
the attached Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
                        --------------------------------------------------------

--------------------------------------------------------------------------------
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

Dated:
      -----------------------

Signature Guaranteed

-----------------------------                    ------------------------------
NOTICE: Signature must be                        NOTICE:  The signature to this
guaranteed.                                      assignment must correspond with
                                                 the name of the Holder as
                                                 written upon the face of the
                                                 attached Security in every
                                                 particular, without alteration
                                                 or enlargement or any change
                                                 whatever.

                  (Reverse of Security continued on next page)

                                      -46-
<PAGE>   47
                                   SCHEDULE A

<TABLE>
<CAPTION>
                                                                                                    Effective
                      Principal Amount                          Decrease         Increase           Date of
Pricing               of Supplemental         Original          in Principal     in Principal       Increase or       Fiscal Agent
Supplement No.        Obligation              Issue Date        Amount           Amount             Decrease          Notation
<S>                   <C>                     <C>               <C>              <C>                <C>               <C>
</TABLE>

                                     - 47 -<PAGE>   1

                                                                   EXHIBIT 10.01
                              CONSULTING AGREEMENT

         THIS CONSULTING AGREEMENT is made and entered into as of this 20th day
of December, 1999, by and between OLD NATIONAL BANCORP (the "Company"), an
Indiana corporation, and DONALD P. WEINZAPFEL (the "Executive"), an Indiana
resident.

                                   WITNESSETH:

         WHEREAS, the Company, Old National Bank, Permanent Bancorp, Inc.
("Permanent"), Permanent Bank (the "Bank") and Merger Corporation I ("Merger
Corporation") have entered into that certain Agreement of Affiliation and Merger
dated December 20, 1999 (the "Merger Agreement"); and

         WHEREAS, the Company wishes to engage the Executive as a consultant,
and the Executive desires to provide certain consulting services, in accordance
with this Agreement.

         NOW THEREFORE, in consideration of the foregoing premises, the mutual
promises, obligations and undertakings contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

Section 1. Term; Consulting Services.

         The Executive shall provide the consulting services described herein
for a term of eighteen (18) months immediately following the Effective Time (as
defined in the Merger Agreement), unless earlier terminated as provided herein
(the "Term"). During the Term, the Executive shall provide, upon the request of
the Company or Old National Bank, certain consulting services to Old National
Bank. Such consulting services shall (a) be reasonably determined by the Company
or Old National Bank, (b) be performed by the Executive during normal business
hours at any office of the Company or Old National Bank now or hereafter located
in Vanderburgh, Warrick or Posey Counties in Indiana, and (c) not exceed twenty
(20) hours per month. The Executive shall perform the consulting services
pursuant to this Agreement to the best of his ability and in a faithful and
diligent manner.

Section 2. Executive's Employment.

         In accordance with Section 6(b) of the Employment Agreement, the
Executive hereby voluntarily terminates his employment by, and hereby
voluntarily resigns from all officer and other positions held by him at,
Permanent and the Bank, effective as of the Effective Time, and the parties
hereto hereby waive the ninety (90) day notice requirement of Section 6(b) of
the Employment Agreement and the requirement to obtain an assumption agreement
pursuant to Section 12 of the Employment Agreement. Accordingly, at and
following

<PAGE>   2

the Effective Time, no party to that certain Employment Agreement (the
"Employment Agreement") dated October 6, 1998 by and among Permanent, the Bank
and the Executive shall have any liability or obligation to any other party
thereto under the Employment Agreement, except that the Executive's covenants
and obligations pursuant to Section 10 of the Employment Agreement shall remain
in full force and effect and continue to be binding upon the Executive in
accordance with the provisions thereof and except with respect to any
compensation properly due and payable to the Executive under the Employment
Agreement at the Effective Time which remains unpaid at the Effective Time. The
Executive hereby understands, acknowledges and agrees that, from and following
the Effective Time, (a) he shall not be entitled to receive or participate in
any salary, bonus, compensation or other payments or any employee benefits
(including, without limitation, any retirement, pension, profit-sharing and
insurance) of or from the Company, Old National Bank, Permanent, the Bank or
Merger Corporation, whether pursuant to the Employment Agreement or otherwise,
except for (i) the Consulting Fee provided herein, (ii) all fully vested
retirement, pension and profit-sharing benefits properly payable to the
Executive, and (iii) any insurance coverage under applicable law or under the
retiree welfare benefits, if any, made available by the Company to its retirees
or former directors, it being understood and agreed that all premiums and costs
for such insurance coverage shall be the sole responsibility of the Executive;
and (b) he hereby waives and releases any and all rights and claims to the items
referenced in Section 2(a) hereof.

         The Executive hereby expressly understands, acknowledges and agrees
that, on and after the Effective Time, he shall not be entitled to, and the
Executive hereby expressly waives and releases all rights and claims to, any
salary, compensation, payment and/or other amount from the Company, Old National
Bank, Permanent, the Bank and Merger Corporation under Sections 6, 7 and 8 of
the Employment Agreement (whether based upon any termination, change in control
or otherwise).

Section 3. Compensation.

         During the Term, the Company shall pay to the Executive, and the
Executive shall accept from the Company, as full payment for his consulting
services provided hereunder, an amount equal to Fourteen Thousand Five Hundred
Dollars ($14,500) per month (the "Consulting Fee"), payable in equal monthly
installments on the first day of each month during the Term. The Executive shall
be responsible for and pay all taxes relating to the Consulting Fee paid to the
Executive.

Section 4. Termination.

         During the Term, this Agreement may be terminated by the Company or the
Executive at any time with or without cause upon ten (10) days prior written
notice to the other. In addition, this Agreement shall automatically terminate
upon the death or disability of the Executive. Upon any termination of this
Agreement, the Company shall pay to the Executive (or, in the event of the
Executive's death, to the Executive's estate) the Consulting Fee from the date
of termination through the end of the Term. Any

<PAGE>   3

termination of this Agreement shall not affect the Executive's covenants and
obligations under Section 10 of the Employment Agreement, all of which shall
remain in full force and effect and continue to be binding upon the Executive in
accordance with the provisions thereof

Section 5. Relationship of the Parties.

         The Executive shall be an independent contractor responsible for his
own actions, and nothing contained in this Agreement shall be construed to
constitute or make the Executive an employee, representative or agent of the
Company. Nothing in this Agreement creates a relationship of agency, employment,
partnership, co-venture or joint venture between the parties, and neither party
hereto shall have any authority to bind the other in any respect. This Agreement
does not and shall not be construed so as to entitle Executive to any of the
benefits, privileges or amenities of employment by the Company or any of its
subsidiaries, other than the insurance coverage described in Section 2 hereof.

Section 6. Certain Other Matters.

         6.01. Country Club Membership. The Company shall, within thirty (30)
days following the Effective Time, cause Permanent or Old National Bank, as the
case may be, to transfer and assign to the Executive the membership at Rolling
Hills Country Club owned by Permanent for the benefit of the Executive.
Following such transfer and assignment, the Executive shall be responsible for
and pay all dues, assessments, fees, costs and other amounts relating to such
membership.

         6.02. Other Agreements. The Executive hereby acknowledges and agrees
that the Employment Agreement (including the agreements, arrangements and
perquisites referred to therein) constitutes the only agreement, commitment and
understanding between or among Permanent, the Bank and the Executive relating to
Permanent's and the Bank's employment of the Executive. The Executive further
acknowledges and agrees that the Employment Agreement has never been amended,
modified or extended in any respect, except for the amendment thereto that
extended the term of the Employment Agreement through the Effective Time.

         6.03. No Breaches or Claims. The Executive hereby acknowledges and
agrees that neither the Executive nor Permanent or the Bank has breached or
defaulted under, or is presently in breach of or default under, the Employment
Agreement. The Executive hereby further acknowledges and agrees that the
Executive has not waived compliance of any term, condition or provision of the
Employment Agreement. The Executive represents and agrees that, as of the date
hereof, he has no claims, demands, causes of action, suits or proceedings
pending or threatened against Permanent, the Bank or any of their stockholders,
directors, officers or employees, whether arising under the Employment Agreement
or otherwise.

         6.04. Payments under the Employment Agreement. The Executive hereby
acknowledges and agrees that he has received in full all salary, compensation,
employee benefits, payments and other amounts to which

<PAGE>   4

he is entitled under the Employment Agreement or otherwise from Permanent and
the Bank through and including the date hereof (except for any fully vested
benefits under any employee benefit plan of Permanent or the Bank that are being
paid or will be paid in accordance with a written plan document or agreement).

         6.05. Certain Representations, Warranties and Covenants. The Executive
represents, warrants, covenants and agrees that (a) he has the legal capacity to
enter into this Agreement and that by doing so, the Executive is not in breach
or contravention of any other agreements to which he is a party, (b) this
Agreement is binding upon and enforceable against the Executive, (c) all
information and materials which the Executive may submit to the Company or Old
National Bank in providing the consulting services hereunder will not infringe
upon or violate the rights of any third party, (d) Section 10 of the Employment
Agreement shall survive the Merger and shall continue in full force and effect
and be binding upon him following the Effective Time in accordance with the
provisions thereof, (e) neither this Agreement (including the Executive's
resignation contemplated hereby) nor any action on the part of the Company, Old
National Bank, Permanent or the Bank constitutes a "termination" (as defined in
the Employment Agreement) by Permanent or the Bank of the Executive's employment
(whether with or without "cause", as defined in the Employment Agreement) and
does not constitute Permanent or the Bank having "involuntarily terminated", as
defined in the Employment Agreement, the Executive's employment, and (f) neither
this Agreement (including the Executive's resignation contemplated hereby) nor
any action on the part of the Company, Old National Bank, Permanent or the Bank
will result in the Executive being entitled to any payment under the Employment
Agreement (whether in connection with a "change in control", as defined in the
Employment Agreement, or otherwise).

         6.06. Confirmation. Immediately prior to the Effective Time, the
Executive shall confirm in writing that his representations, warranties,
agreements, waivers and releases contained in this Agreement continue are true,
accurate and complete and binding upon him as of the Effective Time.

Section 7. Effectiveness of this Agreement.

         This Agreement shall be in full force and effect and binding upon the
parties hereto on and after the date hereof, notwithstanding that the Term shall
begin following the date hereof. In the event that the Merger Agreement is
terminated as provide therein, then this Agreement shall automatically terminate
(without the need for any further action, writing or notice by either party
hereto).

Section 8. Miscellaneous.

         (a) Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, trustees, representatives, successors and assigns.
Neither party may assign this Agreement without the prior written consent of
each other party

<PAGE>   5

hereto; provided, however, that the Executive shall not unreasonably withhold
his consent to any such assignment by the Company.

         (b) Waiver. The parties hereto may, by an instrument in writing signed
by the waiving party, waive the performance or breach by the other party of any
of the covenants or agreements to be performed by such other party under this
Agreement. The waiver by any party hereto of a breach of or noncompliance with
any provision of this Agreement shall not operate or be construed as a
continuing waiver or a waiver of any other or subsequent breach or noncompliance
hereunder.

         (c) Amendment. Except as expressly provided otherwise herein, this
Agreement may be terminated, amended, modified or supplemented only by a written
agreement executed by all of the parties hereto.

         (d) Severability. In case any one or more of the provisions (or any
portion thereof) contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision or provisions (or portion thereof) had never been contained herein.

         (e) Entire Agreement. This Agreement supersedes all other prior
understandings, commitments, representations, negotiations, contracts and
agreements, whether oral or written, between the parties hereto relating to the
matters contemplated hereby and constitutes the entire agreement between the
parties hereto relating to the subject matter hereof.

         (f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without reference to any
choice of law provisions, principles or rules thereof (whether of the State of
Indiana or any other jurisdiction) that would cause the application of any laws
of any jurisdiction other than the State of Indiana.

         (g) Headings. The section headings contained in this Agreement have
been inserted solely for convenience and ease of reference and shall not be
considered in the interpretation, construction or enforcement of this Agreement.

         (h) Capitalized Terms. All capitalized terms used but not otherwise
defined in this Agreement shall have the same meanings ascribed to them in the
Merger Agreement.

                                      * * *

<PAGE>   6

         IN WITNESS WHEREOF, the parties hereto have entered into, executed and
delivered this Agreement as of the day and year first above written.

                                            OLD NATIONAL BANCORP

                                            By: /s/ JAMES A. RISINGER
                                                --------------------------------
                                                James A. Risinger, Chairman and
                                                Chief Executive Officer

                                            EXECUTIVE

                                            /s/ DONALD P. WEINZAPFEL
                                            ------------------------------------
                                            Donald P. Weinzapfel

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