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                                                                    EXHIBIT 4(c)

                               VIEWCAST.COM, INC.

                                    * * * * *

                      RESTATED BY-LAWS AS OF MARCH 27, 2000

                                    * * * * *

     The following are the By-laws of ViewCast.com, Inc., restated as of March
27, 2000.

                                    ARTICLE I
                                     OFFICES

     1.1 The registered office of the Company shall be located at 2665 Villa
Creek, Suite 200, Dallas, Texas 75234.

     1.2 The Company may also have offices at such other places both within and
without the State of Texas as the Board of Directors may from time to time
determine or the business of the corporation may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

     2.1 All meetings of the stockholders for the election of Directors shall be
held at the principal offices of the Company, or at such other place either
within or without the State of Texas as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be

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held at such time and place, within or without the State of Texas, as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.

     2.2 Annual meeting of stockholders, for the purpose of electing directors
and of transacting such other business as may come before it, shall be held at
the office of the corporation or at such other place as may be fixed by the
Board of Directors and specified in the notice of the meeting and within four
months after the close of the fiscal year or at such other date and time as may
be fixed by the Board of Directors and specified in the notice of the meeting.

     2.3 Written notice of the annual meeting stating the place, date and hour
of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than 10 nor more than 60 days before the date of the meeting.

     2.4 (a) No notice of the time, place, or purposes of any regular or special
meeting of shareholders need be given to any shareholder who, in person, or by
proxy, either attends the meeting or, in a writing which is filed with the
records of the meeting, waives the notice either before or after the meeting.

         (b) Any shareholder who has signed a waiver of notice of the meeting
shall be bound by the proceedings of that meeting in all respects as if due
notice of that meeting had been given.

     2.5 (a) For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of Directors may provide
that the share transfer books shall be closed for a stated period not to exceed,
in any case, 50 days. If the transfer books

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shall be closed for the purpose of determining shareholders entitled to notice
of or to vote at a meeting of shareholders, such books shall be closed for at
least 10 days immediately preceding such meeting.

         (b) In lieu of closing the share transfer books, the Board of Directors
may fix in advance a date as the record date for any determination of
shareholders, such date in any case to be not more than 50 days and, in case of
a meeting of shareholders, not less than 10 days prior to the date on which the
action requiring that determination of shareholders is to be taken.

         (c) If the share transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of or to vote at
a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring the dividend is adopted, as
the case may be, is the record date for determination of shareholders.

     2.6 The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the

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time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.

     2.7 Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Certificate of Incorporation,
may be called by the President and shall be called by the President or Secretary
at the request in writing of a majority of the Board of Directors, or at the
request in writing of stockholders owning a majority in amount of the entire
capital stock of the corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.

     2.8 Written notice of a special meeting stating the place, date and hour of
the meeting and the purpose or purposes for which the meeting is called, shall
be given not less than 10 nor more than 60 days before the date of the meeting,
to each stockholder entitled to vote at such meeting.

     2.9 The President, or in his absence the Chairman or Vice-Chairman, shall
call to order meetings of shareholders and shall act as Chairman of such
meetings. The Board of Directors or the shareholders may appoint any shareholder
or any director or officer of the corporation to act as Chairman of any meeting
in the absence of the President and the chairman or vice-chairman. The Secretary
of the corporation shall act as Secretary of all meetings of shareholders, but
in the absence of the Secretary the presiding officer may appoint any
shareholder or any director or officer to act as Secretary of any meeting.

     2.10 Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice. The order of business at annual
and special meetings of shareholders shall, to the extent appropriate, be as
follows:

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     (1)  Call to order;

     (2)  Determination of the presence of a quorum;

     (3)  Consideration of minutes not previously approved;

     (4)  Report of the President and other officers;

     (5)  Election of Directors;

     (6)  Consideration of unfinished business;

     (7)  Consideration of new business; and

     (8)  Adjournment.

     2.11 The holders of one-third (1/3) of the voting stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.

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     2.12 When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which by express provision of the statutes or of the Certificate of
Incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question. Elections for Directors
need not be by ballot unless a shareholder demands election by ballot at the
election and before the voting begins.

     2.13 Unless otherwise provided in the Certificate of Incorporation each
stockholder shall at every meeting of the stockholders be entitled to one vote
in person or by proxy for each share of the capital stock having voting power
held by such stockholder, but no proxy shall be voted on after three years from
its date, unless the proxy provides for a longer period.

     2.14 Unless a proxy is irrevocable --

          (a)  The later execution by the shareholder of a different proxy
               revokes the earlier one; and

          (b)  An attempt to vote by the shareholder who is present at the
               meeting revokes all other proxies executed by him.

     2.15 Holders of fractional share or scrip shall have no right to vote at or
participate in any meeting of shareholders.

     2.16 (a) In advance of any meeting of shareholders, the Board of Directors
may appoint any persons, other than nominees for office, as inspectors of
election to act at that meeting or any adjournment thereof. If inspectors of
election are not appointed, the chairman of any meeting may, and on the request
of any shareholder or shareholder's

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proxy shall, appoint inspectors of election at the meeting. The number of
inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed. In case any
person appointed as inspector fails to appear or fails or refuses to act, the
vacancy may be filled by appointment by the Board of Directors in advance of the
meeting, or at the meeting by the person acting as chairman.

         (b) The inspectors of election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, and the authenticity, validity, and effect of
proxies. The inspectors shall also receive votes, ballots, or consents, hear and
determine all challenges and questions in any way arising in connection with the
right to vote, count and tabulate all votes or consents, determine the result,
and do such acts as may be proper to conduct the election or vote with fairness
to all shareholders. The inspectors of election shall perform their duties
impartially, in good faith, to the best of their ability, and as expeditiously
as is practical.

         (c) If there are three inspectors of election the decision, act, or
certificate of a majority is effective in all respects as the decision, act, or
certificate of all.

         (d) On request of the chairman of the meeting or of any shareholder or
his proxy the inspectors shall make a report in writing of any challenge or
question or matter determined by them and execute a certificate of any fact
found by them. Any report or certificate made by them is prima facie evidence of
the facts stated therein.

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                                   ARTICLE III
                                    DIRECTORS

     3.1 The number of Directors which shall constitute the whole board shall be
such number as shall be determined from time to time by resolution of the Board
of Directors. The Directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3.2 of this Article, and each
Director elected shall hold office until his successor is elected and qualified.

     3.2 Vacancies and newly created directorships resulting from any increase
in the authorized number of Directors may be filled by a majority of the
Directors then in office, though less than a quorum, or by a sole remaining
Director, and the Directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the Directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least 10% of the total
number of the shares at the time outstanding having the right to vote for such
Directors, summarily order an election to be held to fill any such vacancies or
newly created directorships, or to replace the Directors chosen by the Directors
then in office.

     3.3 The business and affairs of the corporation shall be managed by or
under the direction of its Board of Directors which may exercise all such powers
of the

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corporation and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-laws directed or required to be
exercised or done by the stockholders.

     3.4 The Board of Directors of the corporation may hold meetings, both
regular and special, either within or without the State of Delaware.

     3.5 Regular meetings of the Board of Directors may be held with or without
notice at such time and at such place as shall from time to time be determined
by the Board.

     3.6 Special meetings of the Board may be called by the President on 5 days
notice to each Director, either personally or by mail or by telegram; special
meetings shall be called by the President or Secretary in like manner and on
like notice on the written request of two Directors, unless the board consists
of only one Director, in which case, I special meetings shall be called by the
President or Secretary in like manner and on like notice on the written request
of the sole Director.

     3.7 At all meetings of the board a majority of the Directors shall
constitute a quorum for the transaction of business and the act of a majority of
the Directors present at any meeting at which there is a quorum present shall be
the act of the Board of Directors, except as may be otherwise specifically
provided by statute or by the Certificate of Incorporation. A Director who
abstains from participation in a particular course of business shall nonetheless
be counted for purposes of determining a quorum. If a quorum shall not be
present at any meeting of the Board of Directors the Directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

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     3.8 Unless otherwise restricted by the Certificate of Incorporation or
these By-laws, any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken without a
meeting, if all members of the board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.

     3.9 Unless otherwise restricted by the Certificate of Incorporation or
these By-laws, members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in a meeting can hear each
other, and such participation in a meeting shall constitute presence in person
at the meeting.

     3.10 At every meeting of the Board of Directors, the Chairman of the Board
of Directors, if there is such an officer, and if not, the President, or in the
President's absence, a Vice President designated by the President, or in the
absence of such designation, a chairman chosen by a majority of the Directors
present, shall preside. The Secretary of the corporation shall act as Secretary
of the Board of Directors. In case the Secretary shall be absent from any
meeting, the chairman may appoint any person to act as Secretary of the meeting.

     3.11 The Board of Directors, by resolution adopted by a majority of the
entire Board, may designate from among its members one or more committees, each
consisting of two or more Directors, and each of which, to the extent provided
in such resolution, shall have all the authority of the Board (except as
otherwise provided by law, the Articles

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of Incorporation, as amended, or these By-laws). However, no such committee
shall have authority as to any of the following matters:

         (a) the submission to shareholders of any action as to which
shareholders' authorization or approval is required by law, the Articles of
Incorporation, as Amended, or these By-laws;

         (b) the filling of vacancies on the Board of Directors or on any
committee;

         (c) the fixing of compensation of the Directors for serving on
the-Board or on any committee;

         (d) the amendment or repeal of these By-laws, or the adoption of new
By-laws;

         (e) the amendment or repeal of any resolution of the Board of Directors
unless, by its terms, it is expressly made so amendable or repealable;

         (f) the issuance of any shares or evidence of indebtedness of the
corporation or the declaration of any dividend;

         (g) the amendment of the Certificate of Incorporation, (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors
as provided in Section 151(a) fix any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, and distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation) adopting an agreement of
merger or consolidation;

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         (h) recommendation to the stockholders of the sale, lease or exchange
of all or substantially all of the corporations property and assets; and

         (i) recommendation to the stockholders of a dissolution of the
corporation or a revocation of dissolution.

     3.12 Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required.

     3.13 Unless otherwise restricted by the certificate of Incorporation or
these By-laws, the Board of Directors shall have the authority to fix the
compensation of Directors. The Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
Director. No such payment shall preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

     3.14 Unless otherwise restricted by the Certificate of Incorporation or
By-laws, any Director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of shares entitled to vote at an
election of Directors.

     3.15 The Corporation has outstanding certain 8% Senior Convertible Notes
due 2002 and Series A Convertible Preferred Stock (collectively, "Convertible
Securities") each of which is convertible, on certain terms and conditions, into
Common Stock of the Corporation. The Convertible Securities contain certain
anti-dilution provisions which will result in the reduction of the conversion
price if the Corporation issues Common Stock at a price less than the conversion
price then in effect, subject to the conditions

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contained in the Convertible Securities. The directors of this Corporation are
not authorized to, and will not, take any action which would result in the
Convertible Securities being convertible into 20% or more of the then
outstanding Common Stock of the Corporation without obtaining stockholder
consent if NASDAQ Stock Market Rules 4310(c)(25)(H) requires a stockholder
consent to such issuance upon the conversion of the Convertible Securities. This
provision of the bylaws of the Corporation shall remain in full force and effect
so long as the Convertible Securities remain outstanding.

                                   ARTICLE IV
                                     NOTICES

     4.1 Whenever, under the provisions of the statutes or of the Certificate of
Incorporation or of these By-laws, notice is required to be given to any
Director or stockholder, it shall not be construed to mean personal notice, but
such notice may be given in writing, by mail, addressed to such Director or
stockholder, at his address as it appears on the records of the corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
Directors may also be given by telegram or facsimile telephonic transmission.

     4.2 Whenever any notice is required to be given under the provisions of the
statutes or of the Certificate of Incorporation or of these By-laws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.

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                                    ARTICLE V
                                    OFFICERS

     5.1 The officers of the corporation shall be chosen by the Board of
Directors and shall be Chairman and Vice-Chairman of the Board of Directors,
President, Chief Executive. Officer, Chief Financial officer and Secretary. The
Board of Directors may also designate persons for the positions of Vice
Presidents, Treasurer, Chief Operating Officer, and Controller, and one or more
Assistant Secretaries and Assistant Treasurers, as they deem necessary. Any
number of offices I may be held by the same person, unless the Certificate of
Incorporation or these By-laws otherwise provide.

     5.2 The Board of Directors at its first meeting after each annual meeting
of stockholders shall choose the officers of the Company.

     5.3 The Board of Directors may appoint such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.

     5.4 The salaries of all officers and agents of the corporation shall be
fixed by the Board of Directors.

     5.5 The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the Board
of Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the corporation
shall be filled by the Board of Directors.

     5.6 The Chairman of the Board, if there shall be such an officer, shall, if
present, preside at all meetings of the Board of Directors and exercise and
perform such

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other powers and duties as may be from time to time assigned to the Chairman by
the Board of Directors or prescribed by the By-laws.

     5.7 The President shall be the Chief Executive Officer of the corporation,
and subject to the provisions of these By-laws and to the direction of the Board
of Directors, shall be responsible for the general management and control of the
business and affairs of the corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall sign
stock certificates, execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.

     5.8 In the absence of the President or in the event of his inability or
refusal to act, the Executive Vice Presidents, the Vice Presidents and the
Presidents of Divisions, in the order designated by the Directors, or in the
absence of any designation, then in the order of their election, shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. The Presidents of
Divisions, the Executive Vice Presidents and the Vice Presidents shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.

     5.9 The Secretary, or in his absence the person appointed to act as
Secretary of the meeting, shall at all meetings of the Board of Directors and
all meetings of the stockholders record all the proceedings of the meetings of
the corporation and of the Board of Directors in a book to be kept for that
purpose and shall perform like duties for

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the standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or President, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
Assistant Secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.

                                   ARTICLE VI
                            RESIGNATIONS AND REMOVALS

     6.1 Any Director or officer of the corporation, or any member of any
committee, may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time be not specified therein,
then upon receipt thereof. The acceptance of such resignation shall not be
necessary to make it effective.

     6.2 The Board of Directors, at any meeting thereof called for the purpose,
may, at any time, remove with or without cause from office or terminate the
employment of any officer, agent or member of any committee, and may remove with
cause any Director.

     The shareholders entitled to vote for the election of Directors may remove
any Director with or without cause.

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                                   ARTICLE VII
                             CERTIFICATES FOR SHARES

     7.1 The shares of the corporation shall be represented by a certificate or
shall be uncertificated. Certificates shall be signed by, or in the name of the
corporation by, the Chairman or the President, or the Secretary of the
corporation.

     Within a reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a written
notice containing the information required to be set forth or stated on
certificates pursuant to Sections 151, 156, 202(a) or 218(a) or a statement that
the corporation will furnish without charge to each stockholder who so requests
the powers, designations, preferences and relative participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.

     7.2 Any or all of the signatures on a certificate may be facsimile. In case
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.

     7.3 The Board of Directors may direct a new certificate or certificates or
uncertificated shares to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates or uncertificated shares, the Board
of Directors may, in its discretion and as a condition

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precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.

     7.4 Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Upon receipt of proper transfer instructions from the registered owner of
uncertificated shares such uncertificated shares shall be cancelled and issuance
of new equivalent uncertificated shares or certificated shares shall be made to
the person entitled thereto and the transaction shall be recorded upon the books
of the corporation.

     7.5 In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than 60 nor less than 10 days before the date of such meeting, nor
more than 60 days prior to any other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any

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adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.

     7.6 The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends, and
to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

     8.1 Dividends upon the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the Certificate of Incorporation.

     8.2 Before payment of any dividend, there may be set aside out of any funds
of the corporation available for dividends such sum or sums as the Directors
from time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purpose as the
Directors shall think conducive to the

<PAGE>   20

interest of the corporation, and the Directors may modify or abolish any such
reserve in the manner in which it was created.

     8.3 The Board of Directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.

     8.4 All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Director may from time to time designate.

     8.5 The fiscal year of the corporation shall begin on January 1 and end on
December 31.

     8.6 The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. No written act of the Company
shall be declared invalid for lack of a seal if signed by the duly authorized
officer of the Company.

     8.7 All deeds, bonds, mortgages, contracts and other instruments or
documents requiring a seal may be signed in the name of the corporation by the
President or by any other officer authorized to sign such instrument or document
by the Board of Directors, and such authority may be general or confined to
specific instances.

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                                   ARTICLE IX
                                   AMENDMENTS

     9.1 These By-laws may be altered, amended or repealed or new By-laws may be
adopted by the stockholders or by the Board of Directors at any regular meeting
of the stockholders or of the Board of Directors or at any special meeting of
the stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new By-laws be contained in the notice of such
special meeting. If the power to adopt, amend or repeal By-laws is conferred
upon the Board of Directors by the Certificate of Incorporation it shall not
divest or limit the power of the stockholders to adopt, amend or repeal By-laws.

                                    ARTICLE X
                                 INDEMNIFICATION

     10.1 The corporation shall indemnify its officers, Directors, employees and
agents to the full extent permitted by the General Corporation Law of Delaware,
as amended from time to time.

     Any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (whether or not by or in the right of
the Corporation) by reason of the fact that he is or was a Director, officer,
incorporator, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a Director, officer, incorporator, employee,
partner, trustee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise (including an employee benefit plan),

<PAGE>   22

shall be entitled to be indemnified by the corporation to the full extent then
permitted by law against expenses (including attorney's fees), judgments, fines
(including excise taxes assessed on a person with respect to an employee benefit
plan), and amounts paid in settlement incurred by him in connection with such
action, suit, or proceeding. Such right of indemnification shall inure whether
or not the claim asserted is based on matters which antedate the adoption of
this Section 10.1. Such right of indemnification shall continue as to a person
who has ceased to be a Director, officer, incorporator, employee, partner,
trustee, or agent and shall inure to the benefit of the heirs and personal
representatives of such a person. The indemnification provided by this Section
10.1 shall not be deemed exclusive of any other rights which may be provided now
or in the future under any provision currently in effect or hereafter adopted by
the Bylaws, by any agreement, by vote of stockholders, by resolution of
disinterested Directors, by provision of law, or otherwise.<PAGE>   1
                                                                     EXHIBIT 4.1
                          TEXTRON FINANCIAL CORPORATION

                           MEDIUM-TERM NOTE, SERIES E

Cusip No.: __________   Registered No.: R-_________  Principal Amount: $________

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY 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 NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.

Issue Price:                     Maturity Date:

Original Issue Date:             Index Maturity:

                                 [ ] Original Issue Discount Note

                                          Total Amount of OID:

                                          Yield to Maturity:               %

                                          Initial Accrual Period OID:
[ ] Fixed Rate

         Interest Rate:                     %

[ ] Floating Rate

         Initial Interest Rate:             %
<PAGE>   2
Interest Rate Basis or Bases:

____ CD Rate                            Specified Currency (if other than U.S.
                                        dollars):
____ CMT Rate
         [ ] Telerate Page 7051

         [ ] Telerate Page 7052         Option To Receive Payments In Specified
               [ ] Weekly Average       Currency (if non-U.S. dollar denominated
               [ ] Monthly Average      Note):

____ Commercial Paper Rate              Exchange Rate Agent:

____ Federal Funds Rate                 Authorized Denomination:
                                                [ ]$1,000 and integral multiples
____ LIBOR                                         thereof
         [ ] LIBOR Reuters                      [ ] Other:
         [ ] LIBOR Telerate
         [ ] LIBOR Currency:            Initial Redemption Date:

____ Prime Rate

                                        Annual Redemption Percentage Reduction:
____ Treasury Rate

____ Other:                             Initial Redemption Percentage:

                                        Repayment Dates:

Spread (Plus Or Minus):                 Repayment Prices:
Spread Multiplier:              %       Maximum Interest Rate:             %

Interest Category:                      Minimum Interest Rate:             %
[ ] Regular Floating Rate Note
[ ] Floating Rate/Fixed Rate Note       Other Provisions:
       Fixed Rate Commencement Date:
       Fixed Interest Rate:     %
[ ] Inverse Floating Rate Note
       Fixed Interest Rate:     %
Initial Interest Reset Date:

Interest Reset Dates:

                                       2
<PAGE>   3
Interest Payment Dates (in the case of a Floating Rate Note and, in the case of
a Fixed Rate Note, if other than as set forth below):

Regular Record Dates (if other than as set forth below):

Interest Determination Dates:

Addendum Attached
[ ] Yes
[ ] No

Calculation Agent (if other than the Trustee):

         Textron Financial Corporation, a Delaware corporation (herein called
the "Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the Principal Amount specified above on the Maturity
Date specified above and to pay to the registered holder of this Note (the
"Holder") interest on said Principal Amount at a rate per annum specified above
and upon the terms provided below under either the heading "Provisions
Applicable to Fixed Rate Notes Only" or "Provisions Applicable to Floating Rate
Notes Only."

         This Note is one of a duly authorized issue of notes of the Company
(herein referred to as the "Notes"), all issued or to be issued in one or more
series under an Indenture, dated as of December 9, 1999 (as amended or
supplemented, the "Indenture"), between the Company and SunTrust Bank (formerly
known as SunTrust Bank, Atlanta), as trustee (the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture reference is
hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Notes of this series are limited (except as
otherwise provided in the Indenture) to the aggregate principal amount
established from time to time by the Board of Directors of the Company. The
Notes of this series may be issued at various times with different maturity
dates and different principal repayment provisions, may bear interest at
different rates and may otherwise vary, all as provided in the Indenture. The
Notes of this series may be subject to redemption or entitled to repayment at
the option of the Holder thereof, in both cases upon notice and in accordance
with the provisions of this Note and the Indenture. The Company may defease the
Notes of this series in accordance with the provisions of the Indenture.

         As used herein, the term "Business Day" means any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which
commercial banks are authorized or required by law, regulation or executive
order to close in The City of New York; provided, however, that if a Specified
Currency is specified above, the day is also not a day on which commercial banks
are authorized or required by law, regulation or executive order to close in the

                                       3
<PAGE>   4
Principal Financial Center (as defined below) of the country issuing such
Specified Currency or, if such Specified Currency is the Euro, the day is also a
day on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open; and provided further that if LIBOR is
indicated above to be an applicable Interest Rate Basis, the day is also a
London Banking Day (as defined below).

         "Principal Financial Center" means:

         (1)      the capital city of the country issuing the Specified
                  Currency; or

         (2)      the capital city of the country to which the LIBOR Currency
                  relates,

except, in each case, that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire,
Portuguese escudos, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Sydney and (solely in the case
of the Specified Currency) Melbourne, Toronto, Frankfurt, Amsterdam, Milan,
London (solely in the case of the LIBOR Currency), Johannesburg and Zurich,
respectively.

         "London Banking Day" means a day which commercial banks are open for
business, including dealings in the LIBOR Currency specified above, in London.

PROVISIONS APPLICABLE TO FIXED RATE NOTES ONLY:

         If the "Fixed Rate" line above is checked, unless otherwise specified
above, the Company will pay interest semiannually on March 15 and September 15
of each year (each such date fixed for the payment of interest, an "Interest
Payment Date") and on the Maturity Date or upon earlier redemption or repayment
to the person to whom principal is payable. Interest shall accrue from the
Original Issue Date, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for on this Note to, but excluding, the
next following Interest Payment Date, Maturity Date, or earlier date of
redemption or repayment, as the case may be. Interest on Fixed Rate Notes will
be computed on the basis of a 360-day year consisting of twelve 30-day months.

         If any Interest Payment Date or the Maturity Date (or the date of
earlier redemption or repayment) of this Note falls on a day that is not a
Business Day, the payment will be made on the next Business Day as if it were
made on the date such payment was due, and no interest will accrue on the amount
so payable for the period from and after such Interest Payment Date or the
Maturity Date (or the date of earlier redemption or repayment), as the case may
be.

PROVISIONS APPLICABLE TO FLOATING RATE NOTES ONLY:

         If the "Floating Rate" line above is checked, the Company will pay
interest on the Interest Payment Dates specified above at the Initial Interest
Rate specified above until the first Interest Reset Date specified above
following the Original Issue Date specified above and thereafter at a rate
determined in accordance with the provisions hereinafter set forth under the
headings

                                       4
<PAGE>   5
"Determination of CD Rate," "Determination of CMT Rate," "Determination of
Commercial Paper Rate," "Determination of Federal Funds Rate," "Determination of
LIBOR," "Determination of Prime Rate" or "Determination of Treasury Rate,"
depending on whether the Interest Rate Basis specified above is the CD Rate, the
CMT Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR, the Prime
Rate, the Treasury Rate or other Interest Rate Basis.

         An interest payment shall be the amount of interest accrued from and
including the Original Issue Date, or from and including the last Interest
Payment Date to which interest has been paid, to, but excluding, the next
following Interest Payment Date, Maturity Date, or date of earlier redemption or
repayment, as the case may be (an "Interest Period"). Notwithstanding any
provision herein to the contrary, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified above.

         If any Interest Payment Date, other than an interest payment due on the
Maturity Date or date of earlier redemption or repayment, falls on a day that is
not a Business Day, such Interest Payment Date will be the following day that is
a Business Day and interest will continue to accrue to such following Business
Day, except that if LIBOR is an Interest Rate Basis, if such Business Day is in
the next succeeding calendar month, such Interest Payment Date will be the
immediately preceding day that is a Business Day. If the Maturity Date (or date
of earlier redemption or repayment) falls on a day that is not a Business Day,
the payment of interest and principal (and premium, if any) may be made on the
next succeeding Business Day, and no interest on such payment will accrue for
the period from and after the Maturity Date (or the date of earlier redemption
or repayment).

         Commencing with the first Interest Reset Date specified above following
the Original Issue Date, the rate at which interest on this Note is payable
shall be adjusted daily, weekly, monthly, quarterly, semi-annually or annually
as specified above under "Interest Reset Dates."

           The interest rate borne by this Note will be determined as follows:

         (i) Unless the Interest Category of this Note is specified above as a
"Floating Rate/Fixed Rate Note" or an "Inverse Floating Rate Note" or in the
event that either "Other Provisions" or an Addendum hereto applies, in each
case, relating to a different interest rate formula, this Note shall be
designated as a "Regular Floating Rate Note" and, except as set forth below or
specified above under "Other Provisions" or in an Addendum hereto, shall bear
interest at the rate determined by reference to the applicable Interest Rate
Basis or Bases (a) plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any, in each case as
specified above. Commencing on the Initial Interest Reset Date, the rate at
which interest on this Note shall be payable shall be reset as of each Interest
Reset Date specified above; provided, however, that the interest rate in effect
for the period, if any, from the Original Issue Date to the Initial Interest
Reset Date shall be the Initial Interest Rate.

         (ii) If the Interest Category of this Note is specified above as a
"Floating Rate/Fixed Rate Note" then, except as set forth below or specified
above under "Other Provisions" or in an Addendum hereto, this Note shall bear
interest at the rate determined by reference to the applicable Interest Rate
Basis or Bases (a) plus or minus the applicable Spread, if any, and/or (b)

                                       5
<PAGE>   6
multiplied by the Spread Multiplier, if any, in each case as specified above.
Commencing on the Initial Interest Reset Date, the rate at which interest on
this Note shall be payable shall be reset as of each Interest Reset Date;
provided, however, that (y) the interest rate in effect for the period, if any,
from the Original Issue Date to the Initial Interest Reset Date shall be the
Initial Interest Rate and (z) the interest rate in effect for the period
commencing on, and including, the Fixed Rate Commencement Date specified above
to the Maturity Date (or date of earlier redemption or repayment) shall be the
Fixed Interest Rate specified above or, if no Fixed Interest Rate is so
specified, the interest rate in effect on the day immediately preceding the
Fixed Rate Commencement Date.

         (iii) If the Interest Category of this Note is specified above as an
"Inverse Floating Rate Note" then, except as set forth below or specified above
under "Other Provisions" or in an Addendum hereto, this Note shall bear interest
at (a) the Fixed Interest Rate specified above minus (b) the rate determined by
reference to the applicable Interest Rate Basis or Bases (x) plus or minus the
applicable Spread, if any, and/or (y) multiplied by the applicable Spread
Multiplier, if any, in each case as specified above; provided, however, that,
unless otherwise specified above under "Other Provisions" or in an Addendum
hereto, the interest rate hereon shall not be less than zero. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note shall be
payable shall be reset on each Interest Reset Date; provided, however, that the
interest rate in effect for the period, if any, from the Original Issue Date to
the Initial Interest Reset Date shall be the Initial Interest Rate set forth
above.

         The "Spread" is the number of basis points (one basis point equals
one-hundredth of a percentage point) specified above to be added to or
subtracted from the Interest Rate Basis for a Floating Rate Note, and the
"Spread Multiplier" is the percentage specified above by which the Interest Rate
Basis for such Floating Rate Note will be multiplied. Both a Spread and/or a
Spread Multiplier may be applicable to this Note, as set forth above.

         Each such adjusted rate shall be applicable on and after the Interest
Reset Date to which it relates but not including the next succeeding Interest
Reset Date. If any Interest Reset Date is a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next day that is a Business Day,
except that if the rate of interest on this Note shall be determined by
reference to LIBOR and such Business Day is in the next succeeding calendar
month, such Interest Reset Date shall be the immediately preceding Business Day.
In addition, if the Treasury Rate is the applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
the Interest Reset Date will be postponed to the next succeeding Business Day.
Subject to applicable provisions of law (including usury laws) and except as
specified in this Note, on each Interest Reset Date, the rate of interest on
this Note shall be the rate determined in accordance with the provisions of the
applicable heading below.

         Accrued interest shall be calculated by multiplying the principal
amount thereof by an accrued interest factor. Such accrued interest factor will
be computed by adding the interest factors calculated for each day in the
Interest Period or from the last date from which accrued interest is being
calculated. The interest factor for each such day is computed by dividing the
interest rate applicable to such day by 360, in the cases of CD Rate Notes,
Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime
Rate Notes or by the number of

                                       6
<PAGE>   7
days in the year, in the cases of CMT Rate Notes and Treasury Rate Notes. The
interest rate applicable to any day that is an Interest Reset Date will be the
interest rate effective on such Interest Reset Date. The interest rate
applicable to any other day will be the interest rate for the immediately
preceding Interest Reset Date (or, if none, the Initial Interest Rate, as
specified above).

         The "Calculation Date," where applicable, pertaining to an Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if any such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or the Maturity Date (or the date of earlier redemption or
repayment), as the case may be.

         SunTrust Bank shall be the calculation agent unless another calculation
agent is specified above (the "Calculation Agent"). The interest rate applicable
to each interest period will be determined by the Calculation Agent on or prior
to the applicable Calculation Date. At the request of the Holder, the
Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate which will become effective on the next Interest
Reset Date.

         All percentages resulting from any calculation of the rate of interest
on a Floating Rate Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percent (.0000001), with five one-millionths of a
percentage point rounded upward, and all dollar amounts used in or resulting
from such calculation on Floating Rate Notes will be rounded to the nearest cent
(with one-half cent being rounded upward).

       DETERMINATION OF CD RATE. If the Interest Rate Basis, as specified above,
is, or is calculated by reference to, the CD Rate, unless otherwise specified
above, the "CD Rate" for each Interest Reset Date will be determined by the
Calculation Agent as of the second Business Day prior to such Interest Reset
Date (a "CD Interest Determination Date") and shall be the rate on the
applicable CD Interest Determination Date for negotiable United States dollar
certificates of deposit having the Index Maturity specified above as published
in H.15(519) (as defined below) on such CD Interest Determination Date under the
heading "CDs (secondary market)." If the rate referred to in the preceding
sentence is not so published by 3:00 p.m., New York City time, on the applicable
Calculation Date, the CD Rate shall be the rate on the applicable CD Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity specified above as published in H.15 Daily Update (as
defined below), or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "CDs (secondary market)." If
the rate referred to in the preceding sentence is not so published by 3:00 p.m.,
New York City time, on the applicable Calculation Date, the CD Rate shall be the
rate on the applicable CD Interest Determination Date calculated by the
Calculation Agent on the Notes as the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on the applicable CD
Interest Determination Date, of three leading non-bank dealers in negotiable
United States dollar certificates of deposit in The City of New York selected by
the Calculation Agent for negotiable United States dollar certificates of
deposit of major United States money market banks with a remaining maturity
closest to the Index Maturity specified above in an amount that is
representative for a single transaction in that market at that time. If the
dealers selected by the Calculation Agent as provided in the preceding

                                       7
<PAGE>   8
sentence are not quoting as mentioned in such sentence, the CD Rate shall be the
CD Rate in effect on the applicable CD Interest Determination Date.

         "H.15(519)" means the weekly statistical release designated as
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 world-wide-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.

         DETERMINATION OF CMT RATE. If the Interest Rate Basis, as specified
above, is, or is calculated by reference to, the CMT Rate, unless otherwise
specified above, the "CMT Rate" for each Interest Reset Date will be determined
by the Calculation Agent as of the second Business Day prior to such Interest
Reset Date (a "CMT Interest Determination Date") and shall be (i) if the
Telerate Page is specified above as 7051, the CMT Rate for such CMT Interest
Determination Date will be a percentage equal to the yield for United States
Treasury securities at "constant maturity" having the Index Maturity specified
above, as published in H.15(519) under the caption "Treasury Constant
Maturities," as the yield is displayed on Bridge Telerate, Inc. (or any
successor service), on page 7051 (or any other page as may replace page 7051 on
that service) ("Telerate Page 7051"), for the applicable CMT Interest
Determination Date. If the rate referred to in the preceding sentence does not
appear on Telerate Page 7051, the CMT Rate for such CMT Interest Determination
Date will be a percentage equal to the yield for United States Treasury
securities at "constant maturity" having the Index Maturity specified above, and
for the applicable CMT Interest Determination Date as published in H.15(519)
under the caption "Treasury Constant Maturities." In the event the rate referred
to in the preceding sentence does not appear in H.15(519), then the CMT Rate for
such CMT Interest Determination Date will be the rate on the applicable CMT
Interest Determination Date for the period of the Index Maturity specified
above, as may then be published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury that the
Calculation Agent determines to be comparable to the rate which would otherwise
have been published in H.15(519). In the event the rate referred to in the
preceding sentence is not published, the CMT Rate on the applicable CMT Interest
Determination Date will be calculated by the Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid prices at
approximately 3:30 p.m., New York City time, on the applicable CMT Interest
Determination Date of three leading primary United States government securities
dealers in The City of New York, which may include an agent of the Company or
such agent's affiliates (each a "Reference Dealer"), selected by the Calculation
Agent (from five Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest), and the lowest quotation (or, in the event of equality, one of the
lowest)), for United States Treasury securities with an original maturity equal
to the Index Maturity specified above, a remaining term to maturity no more than
one year shorter than the Index Maturity specified above and in a principal
amount that is representative for a single transaction in the securities in the
market at that time. If fewer than five but more than two of the prices referred
to in the above sentence are provided as requested, the CMT Rate on the
applicable CMT Interest Determination Date will be calculated by the Calculation
Agent based on the arithmetic mean of the bid prices obtained, and neither the
highest nor the lowest of the quotations shall be

                                       8
<PAGE>   9
eliminated; provided, however, that if fewer than three prices referred to above
are provided as requested, the CMT Rate on the applicable CMT Interest
Determination Date will be calculated by the Calculation Agent as a yield to
maturity based on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 p.m., New York City time, on the applicable CMT Interest
Determination Date of three Reference Dealers selected by the Calculation Agent
from five Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation or, in the event of equality, one of the highest and the
lowest quotation or, in the event of equality, one of the lowest, for United
States Treasury securities with an original maturity greater than the Index
Maturity specified above, and a remaining term to maturity closest to the Index
Maturity specified above, and in a principal amount that is representative for a
single transaction in the securities in the market at that time. However, if
fewer than five but more than two prices referred to above are provided as
requested, the CMT Rate on the applicable CMT Interest Determination Date will
be calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained, and neither the highest nor the lowest of the quotations will
be eliminated. If fewer than three prices referred to above are provided as
requested, the CMT Rate on the applicable CMT Interest Determination Date will
be the CMT Rate in effect on the applicable CMT Interest Determination Date.

         (ii) If the Telerate Page is specified above as 7052, the CMT Rate for
such CMT Interest Determination Date will be a percentage equal to the one-week
or one-month, as specified above, average yield for United States Treasury
securities at "constant maturity" having the Index Maturity specified above, as
published in H.15(519) opposite the caption "Treasury Constant Maturities," as
the yield is displayed on Bridge Telerate, Inc. (or any successor service) on
page 7052 (or any other page as may replace page 7052 on that service)
("Telerate Page 7052"), for the week or month, as applicable, ended immediately
preceding the week or month, as applicable, in which the related CMT Interest
Determination Date falls. If the rate referred to in the preceding sentence does
not appear on Telerate Page 7052, then the CMT Rate for such CMT Interest
Determination Date will be a percentage equal to the one-week or one-month, as
specified above, average yield for United States Treasury securities at
"constant maturity" having the Index Maturity specified above, and for the week
or month, as applicable, preceding the applicable CMT Interest Determination
Date as published in H.15(519) opposite the caption "Treasury Constant
Maturities." If the rate referred to in the preceding sentence does not appear
in H.15(519), then the CMT Rate for such CMT Interest Determination Date will be
the one-week or one-month, as specified above, average yield for United States
Treasury securities at "constant maturity" having the Index Maturity specified
above, as otherwise announced by the Federal Reserve Bank of New York for the
week or month, as applicable, ended immediately preceding the week or month, as
applicable, in which the related CMT Interest Determination Date falls. If the
Federal Reserve Bank of New York does not publish the rate referred to above,
the rate on the applicable CMT Interest Determination Date will be calculated by
the Calculation Agent as a yield to maturity based on the arithmetic mean of the
secondary market bid prices at approximately 3:30 p.m., New York City time, on
the applicable CMT Interest Determination Date of three Reference Dealers
selected by the Calculation Agent (from five Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest), and the lowest quotation (or, in the event of
equality, one of the lowest)), for United States Treasury securities with an
original maturity equal to the Index Maturity specified above, and a remaining
term to maturity no more than one year shorter than

                                       9
<PAGE>   10
the Index Maturity specified above, and in a principal amount that is
representative for a single transaction in the securities in the market at that
time. If fewer than five but more than two of the prices referred to above are
provided as requested, the rate on the applicable CMT Interest Determination
Date will be calculated by the Calculation Agent based on the arithmetic mean of
the bid prices obtained, and neither the highest nor the lowest of the
quotations shall be eliminated. If fewer than three prices referred to above are
provided as requested, the rate on the applicable CMT Interest Determination
Date will be calculated by the Calculation Agent as a yield to maturity based on
the arithmetic mean of the secondary market bid prices as of approximately 3:30
p.m., New York City time, on the applicable CMT Interest Determination Date of
three Reference Dealers selected by the Calculation Agent (from five Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
or (in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for United States Treasury
securities with an original maturity greater than the Index Maturity specified
above, and a remaining term to maturity closest to the Index Maturity specified
above and will be in a principal amount that is representative for a single
transaction in the securities in the market at that time. If fewer than five but
more than two prices referred to above are provided as requested, the rate will
be calculated by the Calculation Agent based on the arithmetic mean of the bid
prices obtained, and neither the highest nor the lowest of the quotations will
be eliminated, or if fewer than three prices referred to above are provided as
requested, the CMT Rate will be the CMT Rate in effect on the applicable CMT
Interest Determination Date. If two United States Treasury securities with an
original maturity greater than the Index Maturity as specified above have
remaining terms to maturity equally close to the Index Maturity specified above,
the quotes for the United States Treasury security with the shorter original
remaining term to maturity will be used.

         DETERMINATION OF COMMERCIAL PAPER RATE. If the Interest Rate Basis, as
specified above, is, or is calculated by reference to, the Commercial Paper
Rate, unless otherwise specified above, the "Commercial Paper Rate" for each
Interest Reset Date will be determined by the Calculation Agent as of the second
Business Day prior to such Interest Reset Date (a "Commercial Paper Interest
Determination Date") and shall be the Money Market Yield (as defined below) on
such date of the rate for commercial paper having the Index Maturity as
indicated above, as such rate shall be published in H.15(519) under the caption
"Commercial Paper-Nonfinancial." In the event that such rate is not published
prior to 3:00 p.m., New York City time, on the applicable Calculation Date, then
the Commercial Paper Rate shall be calculated by the Calculation Agent as the
Money Market Yield of the Commercial Paper Rate on the applicable Commercial
Paper Interest Determination Date for commercial paper having the Index Maturity
specified above, published in H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, under the caption
"Commercial Paper-Nonfinancial." If by 3:00 p.m., New York City time, on the
applicable Calculation Date, such rate is not yet published as provided in the
preceding sentence, then the Commercial Paper Rate on the applicable Commercial
Paper Interest Determination Date shall be calculated by the Calculation Agent
as the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 a.m., New York City time, on the applicable Commercial Paper
Interest Determination Date of three leading dealers of United States dollar
commercial paper in The City of New York, which may include an agent of the
Company or such agent's affiliates, selected by the Calculation Agent for
commercial paper having the Index Maturity

                                       10
<PAGE>   11
specified above, placed for industrial issuers whose bond rating is "Aa," or
the equivalent, from a nationally recognized statistical rating organization;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting offered rates as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on the
applicable Commercial Paper Interest Determination Date.

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

                                         D X 360
          Money market yield =        -------------    X 100
                                      360 - (D X M)

where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.

         DETERMINATION OF FEDERAL FUNDS RATE. If the Interest Rate Basis, as
specified above, is, or is calculated by reference to the Federal Funds Rate,
unless otherwise specified above, the "Federal Funds Rate" with respect to each
Interest Reset Date will be determined by the Calculation Agent as of the first
Business Day prior to such Interest Reset Date (a "Federal Funds Interest
Determination Date") and shall be the rate on that date for United States dollar
Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)," as displayed on Bridge Telerate, Inc. or any successor service on
page 120 or any other page as may replace the applicable page on that service
("Telerate Page 120") or, if such rate does not appear on Telerate Page 120, or
is not so published by 3:00 p.m., New York City time, on the applicable
Calculation Date, the rate on the applicable Federal Funds Interest
Determination Date for United States dollar Federal Funds will be the rate on
such Federal Funds Interest Determination Date as published in H.15 Daily
Update, or other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption "Federal Funds/Effective Rate." If such
rate is not so published by 3:00 p.m., New York City time, on the applicable
Calculation Date, the Federal Funds Rate will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction in
overnight United States dollar Federal Funds arranged by three leading brokers
of United States dollar Federal Funds transactions in The City of New York,
which may include an agent of the Company or such agent's affiliates, selected
by the Calculation Agent before 9:00 a.m., New York City time, on the applicable
Federal Funds Interest Determination Date; provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate will be the Federal Funds
Rate in effect on the applicable Federal Funds Interest Determination Date.

         DETERMINATION OF LIBOR. If the Interest Rate Basis, as specified above,
is, or is calculated by reference to, LIBOR, unless otherwise specified above,
"LIBOR" for each Interest Reset Date will be determined by the Calculation Agent
as of the second London Banking Day

                                       11
<PAGE>   12
prior to such Interest Reset Date (a "LIBOR Interest Determination Date") and in
accordance with the following provisions:

           (i) LIBOR will be either: (a) if "LIBOR Reuters" is specified above,
           LIBOR will be the arithmetic mean of the offered rates (unless the
           specified Designated LIBOR Page (as defined below) by its terms
           provides only for a single rate, in which case such single rate shall
           be used) for deposits in the LIBOR Currency having the Index Maturity
           specified above, commencing on the second London Banking Day
           immediately following such LIBOR Interest Determination Date, that
           appear on the Designated LIBOR Page, as of 11:00 a.m. London time, on
           the applicable LIBOR Interest Determination Date, if at least two
           such offered rates appear (unless, as aforesaid, only a single rate
           is required) on such Designated LIBOR Page, or (b) if "LIBOR
           Telerate" is specified above or if neither "LIBOR Reuters" nor "LIBOR
           Telerate" is specified above as the method for calculating LIBOR,
           LIBOR will be the rate for deposits in the LIBOR Currency (as defined
           below) having the Index Maturity specified above, commencing on the
           second London Banking Day immediately following such LIBOR Interest
           Determination Date that appears on the Designated LIBOR Page as of
           11:00 a.m., London time, on the applicable LIBOR Interest
           Determination Date. If fewer than two such offered rates appear, or
           if no such rate appears, as the case may be, LIBOR in respect of the
           related LIBOR Interest Determination Date will be determined in
           accordance with provisions described in clause (ii) below.

           (ii) With respect to a LIBOR Interest Determination Date on which
           fewer than two offered rates appear, or no rate appears, as the case
           may be, on the applicable Designated LIBOR Page as specified in
           clause (i) above, the rate calculated by the Calculation Agent will
           be the arithmetic mean of at least two quotations obtained by the
           Calculation Agent after requesting the principal London offices of
           each of four major reference banks, which may include an agent of the
           Company or such agent's affiliates, in the London interbank market,
           to provide the Calculation Agent with its offered quotation for
           deposits in the LIBOR Currency for the period of the Index Maturity
           specified above, commencing on the second London Banking Day
           immediately following the applicable LIBOR Interest Determination
           Date, to prime banks in the London interbank market at approximately
           11:00 a.m., London time, on the applicable LIBOR Interest
           Determination Date and in a principal amount that is representative
           for a single transaction in the applicable LIBOR Currency in that
           market at that time. If fewer than two quotations are provided, LIBOR
           determined on the applicable LIBOR Interest Determination Date
           calculated by the Calculation Agent will be the arithmetic mean of
           the rates quoted at approximately 11:00 a.m., in the applicable
           Principal Financial Center, on the LIBOR Interest Determination Date
           by three major banks, which may include an agent of the Company or
           such agent's affiliates, in the applicable Principal Financial
           Center(s) selected by the Calculation Agent for loans in the LIBOR
           Currency to leading European banks, having the Index Maturity
           specified above and in a principal amount that is representative for
           a single transaction in the applicable LIBOR Currency in that market
           at that time; provided, however, that if the banks so selected by the
           Calculation Agent are not quoting as mentioned in this sentence,

                                       12
<PAGE>   13
           LIBOR determined as of such LIBOR Interest Determination Date will be
           LIBOR in effect on the applicable LIBOR Interest Determination Date.

         "LIBOR Currency" means the currency (including composite currencies)
specified above as the currency for which LIBOR shall be calculated. If no such
currency is specified above, the LIBOR Currency shall be United States dollars.

         "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
specified above, the display on the Reuters Monitor Money Rates Service or any
successor service specified above for the purpose of displaying the London
interbank rates of major banks for the applicable LIBOR Currency, or (b) if
"LIBOR Telerate" is specified above or neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified as the method for calculating LIBOR, the display on
Bridge Telerate, Inc. or any successor service specified above, for the purpose
of displaying the London interbank rates of major banks for the applicable LIBOR
Currency.

         DETERMINATION OF PRIME RATE. If the Interest Rate Basis, as specified
above, is, or is calculated by reference to, the Prime Rate, unless otherwise
specified above, the "Prime Rate" with respect to each Interest Reset Date will
be determined by the Calculation Agent as of the first Business Day prior to
such Interest Reset Date (a "Prime Interest Determination Date") and shall be
the rate set forth on such date as published in H.15(519) under the caption
"Bank Prime Loan," or if not so published prior to 3:00 p.m., New York City
time, on the applicable Calculation Date pertaining to such Prime Interest
Determination Date, then the Prime Rate will be as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying the applicable rate under the caption "Bank Prime Loan," or if not so
published prior to 3:00 p.m., New York City time, on the applicable Calculation
Date pertaining to such Prime Interest Determination Date, then the Prime Rate
will be determined by the Calculation Agent as the arithmetic mean of the rates
of interest publicly announced by each bank that appears on the Reuters Screen
US PRIME 1 Page (as defined below) as the particular bank's prime rate or base
lending rate as of 11:00 a.m., New York City time, on the applicable Prime
Interest Determination Date. If fewer than four such rates are so published by
3:00 p.m., New York City time, on the applicable Calculation Date as shown on
the Reuters Screen US PRIME 1 Page for the Prime Interest Determination Date,
the Prime Rate will be determined by the Calculation Agent as the arithmetic
mean of the prime rates or base lending rates quoted on the basis of the actual
number of days in the year divided by a 360-day year as of the close of business
on the applicable Prime Interest Determination Date by three major banks, which
may include an agent of the Company or such agent's affiliates, in The City of
New York selected by the Calculation Agent. However, if the banks selected by
the Calculation Agent are not quoting as mentioned in the preceding sentence,
the Prime Rate will be the Prime Rate in effect on the applicable Prime Interest
Determination Date.

         "Reuters Screen US PRIME 1 Page" means the display designated as "US
PRIME 1 Page" on the Reuters Monitor Money Rates Service (or any successor
service on the "US PRIME 1 Page" or other page as may replace the US PRIME 1
Page on such service for the purpose of displaying prime rates or base lending
rates of major United States banks).

                                       13
<PAGE>   14
         DETERMINATION OF TREASURY RATE. If the Interest Rate Basis, as
specified above, is, or is calculated by reference to the Treasury Rate, unless
otherwise specified above, the "Treasury Rate" for each Interest Reset Date will
be the rate from the auction held on the applicable Interest Determination Date
(the "Auction") of direct obligations of the United States ("Treasury Bills")
having the Index Maturity, as specified above, as published under the caption
"Investment Rate" on the display on Bridge Telerate, Inc. or any successor
service on page 56 or any other page as may replace page 56 on that service or
page 57 or any other page as may replace page 57 on that service, or, if the
rate is not so published by 3:00 p.m., New York City time, on the applicable
Calculation Date pertaining to such Treasury Rate Determination Date (as defined
below), the Bond Equivalent Yield of the rate for the applicable Treasury Bills
as published in H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Auction High," or, if the rate is not so
published by 3:00 p.m., New York City time, on the applicable Calculation Date
pertaining to such Treasury Rate Determination Date, the Bond Equivalent Yield
of the auction rate of the applicable Treasury Bills announced by the United
States Department of the Treasury, or, if the rate is not announced by the
United States Department of the Treasury, or if the Auction is not held, the
Bond Equivalent Yield of the rate on the applicable Treasury Rate Determination
Date of Treasury Bills having the Index Maturity specified above, published in
H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market," or, if the rate is not so published by 3:00 p.m., New York City time,
on the applicable Calculation Date pertaining to such Treasury Rate
Determination Date, the rate on the applicable Treasury Rate Determination Date
of the applicable Treasury Bills as published in H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market." In the event that the results of the auction of Treasury Bills having
the applicable Index Maturity specified above are not published or reported, as
provided above, by 3:00 p.m., New York City time, on the applicable Calculation
Date or if no such auction is held on such Treasury Rate Determination Date,
then the Treasury Rate on the applicable Treasury Rate Determination Date shall
be calculated by the Calculation Agent and shall be the Bond Equivalent Yield of
the arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on the applicable Treasury Rate Determination Date, of
three primary United States government securities dealers, which may include the
agent or its affiliates, selected by the Calculation Agent, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity specified
above; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate will be the Treasury Rate in effect on the applicable Treasury Rate
Determination Date.

         The "Treasury Rate Determination Date" for any Interest Reset Date will
be the day of the week in which such Interest Reset Date falls on which Treasury
Bills would normally be auctioned. Treasury Bills are normally sold at auction
on Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except such auction may be
held on the preceding Friday. If, as the result of a legal holiday, an auction
is so held on the preceding Friday, such Friday will be the Treasury Rate
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction falls on a day that is an Interest Reset Date,
the Interest Reset Date shall be the following Business Day.

                                       14
<PAGE>   15
         "Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:

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

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis and expressed as a decimal; "N" refers to 365 or 366; as the
case may be, and "M" refers to the actual number of days in the interest period
for which interest is being calculated.

PROVISIONS APPLICABLE TO BOTH FIXED RATE NOTES AND FLOATING RATE NOTES:

         The interest so payable on any Interest Payment Date will, subject to
certain exceptions in the Indenture hereinafter referred to, be paid to the
person in whose name this Note is registered at the close of business on the
Regular Record Date (as defined below) immediately preceding such Interest
Payment Date or, if the Interest Payment Date is the Maturity Date or the date
of earlier redemption or repayment, to the person in whose name this Note is
registered at the close of business on the Maturity Date or such earlier date of
redemption or repayment; provided, however, that if the Original Issue Date is
between a Regular Record Date and an Interest Payment Date or on an Interest
Payment Date, interest for the period from and including the Original Issue Date
to, but excluding, the Interest Payment Date relating to such Regular Record
Date shall be paid on the next succeeding Interest Payment Date to the person in
whose name this Note is registered on the close of business on the Regular
Record Date preceding such Interest Payment Date. If this Note bears interest at
a Fixed Rate, as specified above, unless otherwise specified above, the "Regular
Record Date" with respect to any Interest Payment Date shall be the last day of
February and August next preceding such Interest Payment Date, whether or not
such date shall be a Business Day. If this Note bears interest at a Floating
Rate, as specified above, unless otherwise specified above, the "Regular Record
Date" with respect to any Interest Payment Date shall be the fifteenth calendar
day next preceding such Interest Payment Date, whether or not such date shall be
a Business Day.

         Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date or any earlier redemption or repayment date will
be made in immediately available funds upon presentation and surrender of this
Note and, in the event of any repayment on a Repayment Date, as specified above,
upon submission of the form "Option to Elect Repayment" on the reverse of this
Note duly completed, at the office or agency maintained by the Company for that
purpose in the Borough of Manhattan, The City of New York, currently the office
of the Trustee located at c/o Banc One Trust Company, N.A., 14 Wall Street, 8th
Floor, New York, New York 10005-2101, or at such other paying agency in the
Borough of Manhattan, The City of New York, as the Company may determine;
provided, however, that if a Specified Currency is specified above and such
payment is to be made in such Specified Currency in accordance with the
provisions set forth below, such payment will be made by wire transfer of
immediately available funds to an account with a bank designated by the Holder
hereof at least 15 calendar days prior to the Maturity Date or such earlier
redemption or repayment date, as the

                                       15
<PAGE>   16
case may be, provided that such bank has appropriate facilities therefor and
that this Note is presented and surrendered at the aforementioned office or
agency maintained by the Company in time for the Trustee to make such payment in
such funds in accordance with its normal procedures. Payment of interest due on
any Interest Payment Date, other than the Maturity Date or any earlier
redemption or repayment date, will be made by the Company at the aforementioned
office or agency maintained by the Company or, at the option of the Company, by
check mailed to the Holder hereof as of the Regular Record Date immediately
preceding such Interest Payment Date at such Holder's address as such address
shall appear in the Register (as defined in the Indenture) maintained by the
Trustee; provided, however, that if such Holder is a Holder of U.S.$10,000,000
or more in aggregate principal amount of Notes (whether having identical or
different terms and provisions) such Holder will be entitled to receive interest
payments in United States dollars on such Interest Payment Date by wire transfer
of immediately available funds if appropriate wire transfer instructions have
been received in writing by the Trustee not less than 15 calendar days prior to
such Interest Payment Date; and provided further that if a Specified Currency is
specified above and such payment is to be made in such Specified Currency in
accordance with the provisions set forth below, such payment will be made by the
Company by check mailed to such Holder at such address. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder.

         The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in United States dollars or, if a Specified
Currency is indicated above, unless otherwise specified above, in such Specified
Currency (or, if such Specified Currency is not at the time of such payment
legal tender for the payment of public and private debts of the country issuing
such currency or, in the case of the Euro, in the member states of the European
Union that have adopted the single currency in accordance with the Treaty
Establishing the European Community, as amended by the Treaty on European Union,
such other currency which is then such legal tender in such country or in the
adopting member states of the European Union, as the case may be). If a
Specified Currency is specified above, except as otherwise provided below, any
such amounts so payable by the Company will be converted by the New York
clearing house bank designated by the Company above as the Exchange Rate Agent
into United States dollars for payment to the Holder of this Note.

         If a Specified Currency is specified above, unless otherwise provided
above, the Holder of this Note may elect to receive any amount payable hereunder
in such Specified Currency. If the Holder of this Note shall not have duly made
an election to receive all or a specified portion of any payment of principal,
premium, if any, and/or interest in respect of this Note in such Specified
Currency, any United States dollar amount to be received by the Holder of this
Note will be based on the highest bid quotation in The City of New York received
by the Exchange Rate Agent specified above at approximately 11:00 a.m., New York
City time, on the second Business Day preceding the applicable payment date from
three recognized foreign exchange dealers (one of whom may be such Exchange Rate
Agent) selected by such Exchange Rate Agent and approved by the Company for the
purchase by the quoting dealer of the Specified Currency for United States
dollars for settlement on such payment date in the aggregate amount of the
Specified Currency payable to all Holders of Notes scheduled to receive United
States dollar payments and at which the applicable dealer commits to execute a
contract. All currency exchange costs will be borne by the Holder of this Note
by deductions from such payments. If

                                       16
<PAGE>   17
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.

         If a Specified Currency is specified above, unless otherwise provided
above, the Holder of this Note may elect to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in such Specified Currency by submitting a written request for such payment
to the Trustee at the office or agency maintained by the Company in the Borough
of Manhattan, The City of New York, currently the office of the Trustee located
at c/o Banc One Trust Company, N.A., 14 Wall Street, 8th Floor, New York, New
York 10005-2101, or at such other office in the Borough of Manhattan, The City
of New York, as the Company may determine, at least 15 calendar days prior to
the applicable Interest Payment Date or Maturity Date (or any earlier redemption
or repayment date), as the case may be. Such written request may be mailed or
hand delivered or sent by facsimile transmission. The Holder of this Note may
elect to receive all or a specified portion of all future payments in the
Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee at least
15 calendar days prior to the applicable Interest Payment Date or Maturity Date
(or any earlier redemption or repayment date), as the case may be.

         If a Specified Currency is specified above and the Holder of this Note
shall have duly made an election to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in such Specified Currency, but such Specified Currency is not available for
such payment due to the imposition of exchange controls or other circumstances
beyond the control of the Company, the Company will be entitled to satisfy its
obligations to the Holder of this Note by making such payment in United States
dollars on the basis of the Market Exchange Rate (as defined below) determined
by the Exchange Rate Agent specified above on the second Business Day prior to
such payment date or, if such Market Exchange Rate is not then available, on the
basis of the most recently available Market Exchange Rate on or before the date
on which such payment is due. The "Market Exchange Rate" for the Specified
Currency means the noon dollar buying rate in The City of New York for cable
transfers of the Specified Currency as certified for customs purposes (or, if
not so certified, as otherwise determined) by the Federal Reserve Bank of New
York. Any payment made in United States dollars under such circumstances shall
not constitute an Event of Default (as defined in the Indenture).

         All determinations referred to above made by the Exchange Rate Agent
specified above shall be at its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and binding on the Holder of this
Note.

         In case an Event of Default (as defined in the Indenture) with respect
to Notes of this series shall occur and be continuing, the principal amount (or,
if the Note is an Original Issue Discount Note, such lesser portion of the
principal amount as may be applicable) of the Notes of this series may be
declared due and payable, and, with respect to certain Events of Default, shall
automatically become due and payable, in each case in the manner and with the
effect provided in the Indenture. If this Note is an Original Issue Discount
Note, in the event of an acceleration of the Maturity Date hereof, the amount
payable to the Holder of this Note upon such

                                       17
<PAGE>   18
acceleration will be determined by this Note but will be an amount less than the
amount payable at the Maturity Date of this Note.

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

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (premium, if any) and
interest on this Note at the times, places and rate and in the coin or currency
herein prescribed.

         This Note is issuable only in registered form without coupons in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof or other Authorized Denomination specified above.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered in the Register of this
series upon surrender of this Note for registration of transfer at the office or
agency maintained by the Company for that purpose in the Borough of Manhattan,
The City of New York, currently the office of the Trustee located at c/o Banc
One Trust Company, N.A., 14 Wall Street, 8th Floor, New York, New York
10005-2101, or at such other office in the Borough of Manhattan, The City of New
York, as the Company may determine, duly endorsed by or accompanied by, a
written instrument of transfer in form satisfactory to the Company and the
Trustee, duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon a new Note or Notes of this series of Authorized
Denomination, as specified above, and for the same aggregate principal amount
will be issued to the designated transferee or transferees.

         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.

         The Company, the Trustee, and any agent of the Company or the Trustee
may treat the person in whose name this Note is registered in the Register as
the owner of this Note for all purposes, whether or not this Note be overdue,
and neither the Company nor the Trustee nor any such agent shall be affected by
any notice to the contrary.

                                       18
<PAGE>   19
         This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified above, in
whole or from time to time in part in increments of $1,000 or other Authorized
Denomination specified above (provided that any remaining principal amount
hereof shall be at least $1,000 or other minimum Authorized Denomination
specified above), at the Redemption Price (as defined below), together with
unpaid interest accrued thereon to the date fixed for redemption (the
"Redemption Date"), on written notice given to the Holder hereof (in accordance
with the provisions of the Indenture) not more than 60 calendar days nor less
than 30 calendar days prior to the Redemption Date. The "Redemption Price" shall
be the Initial Redemption Percentage specified above multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage
shall decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified above, until the Redemption
Price is 100% of unpaid principal amount to be redeemed. In the event of
redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms and provisions as
this Note shall be issued by the Company in the name of the Holder hereof upon
the presentation and surrender hereof.

         This Note will not be subject to any sinking fund.

         The Company may specify that this Note will be repayable at the option
of the Holder on a date or dates specified prior to the Maturity Date at the
Repayment Prices specified above, together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Paying Agent (as defined in
the Indenture) must receive at least 30, but not more than 60, calendar days
prior to the Repayment Date (i) this Note with the form entitled "Option to
Elect Repayment" at the end of this Note duly completed or (ii) a facsimile
transmission or a letter from a member of a national securities exchange of the
National Association of Securities Dealers, Inc. ("NASD") or a commercial bank
or trust company in the United States of America setting forth the name of the
Holder of this Note, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note to be repaid with the form
entitled "Option to Elect Repayment" at the end of this Note duly completed will
be received by the Paying Agent not less than five Business Days after the date
of such facsimile transmission or letter and such Note and form duly completed
are received by the Paying Agent by such fifth Business Day. Exercise of the
repayment option by the Holder of this Note shall be irrevocable. The repayment
option may be exercised by the Holder of this Note for less then the entire
principal amount of this Note provided that the principal amount of this Note
remaining outstanding after repayment is an Authorized Denomination specified
above. In the event of repayment of this Note in part only, a new Note of like
tenor for the portion hereof remaining unpaid and otherwise having the same
terms and provisions as this Note shall be issued by the Company in the name of
the Holder hereof upon the presentation and surrender hereof.

         The Company can "reopen" a previously issued tranche of Notes and issue
additional Notes of such tranche or establish additional terms of such tranche
or issue notes with the same terms as previously issued Notes.

                                       19
<PAGE>   20
         The Company may at any time purchase this Note at any price in the open
market or otherwise. Notes so purchased by the Company may be held or resold or,
at the discretion of the Company, may be surrendered to the Trustee for
cancellation.

         By acceptance of this Note, the Holder hereof agrees to be bound by the
provisions of the Indenture. Terms used herein which are defined in the
Indenture shall have the respective meanings assigned thereto in the Indenture.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by or on behalf of
the Trustee under the Indenture.

                                       20
<PAGE>   21
         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and delivered as of the date set forth below.

                                      TEXTRON FINANCIAL CORPORATION

                                      BY: ______________________________________
                                          NAME:     THOMAS J. CULLEN
                                          TITLE:    EXECUTIVE VICE PRESIDENT AND
                                                    CHIEF FINANCIAL OFFICER

                                      BY: ______________________________________
                                          NAME:     BRIAN F. LYNN
                                          TITLE:    VICE PRESIDENT AND TREASURER

Dated: ____________________________

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

SUNTRUST BANK,

as Trustee

BY: _____________________________
         Authorized Signatory

                                       21
<PAGE>   22
            [TO BE DELETED IF NOTE ISSUED AS GLOBAL BOOK-ENTRY NOTE]

                                  ABBREVIATIONS

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

TEN COM -  as tenants in common               UNIF GIFT MIN ACT -  Custodian
                                                                 ---------------
                                                                 (Cust)  (Minor)
TEN ENT -  as tenants by the entireties        under Uniform Gifts to Minors Act

                                                     --------------------
JT TEN as joint tenants with right of                      (State)
           survivorship and not as tenant
           in common

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

                         ------------------------------
<PAGE>   23
            [TO BE DELETED IF NOTE ISSUED AS GLOBAL BOOK-ENTRY NOTE]

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:

(Please insert social security or other identifying number of assignee)

               (Name and address of assignee, including zip code,
                         must be printed or typewritten)

the within Note, and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________ attorney to transfer
said Note on the books of the within Company, with full power of substitution in
the premises.

Dated:                     _____________________________________________________

                           NOTICE: The signature to this assignment must
                           correspond with the name as it appears upon page
                           three of the within Note in every particular, without
                           alteration or enlargement or any change whatever and
                           must be guaranteed.

SIGNATURE(S) GUARANTEED:

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM) PURSUANT TO SEC
RULE 17Ad-15.
<PAGE>   24
           [TO BE DELETED UNLESS HOLDER HAS OPTION TO ELECT REPAYMENT]

                   REGISTRAR, PAYING AGENTS AND TRANSFER AGENT

                           REGISTRAR AND PAYING AGENT
                               (subject to change)

                                  SunTrust Bank

                           Corporate Trust Department

                                  Mail Code 008

                            25 Park Place, 24th Floor

                             Atlanta, Georgia 30303

                            OPTION TO ELECT REPAYMENT

         The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion hereof specified below) pursuant to its
terms at a price equal to the applicable repayment price thereof together with
interest to the repayment date, to the undersigned:

          ______________________________________________________________________
           (Please print or typewrite name and address of the undersigned)

         If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid:
________________

and specify the denomination or denominations (which shall be in Authorized
Denominations) of the Notes to be issued to the Holder for the portion of the
within Note not being repaid (in the absence of any such specification, one such
Note will be issued for the portion not being repaid):

_____________________________________________

Date:__________________________      Signature: ________________________________

                                  ABBREVIATIONS

The following abbreviations, when used in the instruction on the face of this
instrument, 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 entirety
   JT TEN-     as joint tenants with right of survivorship and not as tenants in
               common

   UNIF GIFT MIN ACT - ____________________ Custodian for_________________
                             (Cust)                          (Minor)

                  Under Uniform Gifts to Minors Act

                           (State)

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

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