Document:

Exhibit
4(b)(3)

 

Form
of Subordinated Medium-Term Note, Series C (Fixed Rate)

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE 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. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

 

	
  REGISTERED

  	
  $

  
	
   

  	
   

  
	
  No. FX –

  	
  CUSIP #

  

 

THE BEAR STEARNS COMPANIES INC.

 

SUBORDINATED MEDIUM-TERM NOTE, SERIES C

(FIXED RATE)

 

	
  Interest Rate:

  	
   

  
	
   

  	
   

  
	
  Interest Payment Date(s):

  	
   

  
	
   

  	
   

  
	
  Original Issue Date:

  	
  Redeemable On and After:

  
	
   

  	
   

  
	
  Maturity Date:

  	
  Optional Repayment Date(s):

  
	
   

  	
   

  
	
  Minimum Denominations:

  	
   

  

 

 

THE BEAR STEARNS COMPANIES INC., a Delaware
corporation (the “Company”), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal amount stated above on the
Maturity Date shown above (the “Maturity Date”) and to pay interest thereon at
the rate per annum equal to the Interest Rate shown above until the principal
hereof is fully paid or duly made available for payment. The Company will pay
interest (computed on the basis of a 360-day year of twelve 30-day months) in
arrears on                   
of each year (each an “Interest Payment Date”) commencing with the Interest
Payment Date next following the Original Issue Date specified above (the
“Original Issue Date”) provided that, if the Original Issue Date is later than
the Regular Record Date (as defined below) and prior to the next succeeding
Interest Payment Date, interest shall be so payable commencing with the second
Interest Payment Date following the Original Issue Date, and on the Maturity
Date, the Redemption Date, if any, or the Optional Repayment Date, if any, on
said principal amount at the Interest Rate per annum specified above. Interest
on this Note will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for or, if no interest has been paid,
from the Original Issue Date shown above until the principal hereof has been
paid or made available for payment. The interest so payable, and punctually paid
or duly provided for, on the Interest Payment Date referred to above, will, as
provided in the Subordinated Indenture referred to below, be paid to the Person
in whose name this Note (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the date, whether or not a Business Day (as defined below), 15
calendar days immediately preceding such Interest Payment Date, unless
otherwise specified on the face hereof; provided, however, that
interest payable on the Maturity Date, Redemption Date or Optional Repayment
Date will be payable to the Person to whom the principal hereof shall be
payable; and provided, further, however, that if an Interest Payment Date,
Maturity Date, Redemption Date or Optional Repayment Date would fall on a day
that is not a Business Day, the related payment of principal, premium, if any,
or interest shall be made on the following day that is a Business Day and,
unless otherwise specified on the face hereof, no interest shall accrue for the
period from and after that Interest Payment Date, Maturity Date, Redemption
Date or Optional Repayment Date, as the case may be, to the next Business Day.
“Business Day” means any day that is not a Saturday or Sunday, and that is not
a day on which banking institutions in New York City generally are authorized
or required by law or executive order to close. Any such interest which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Person in whose name this Note (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of this Note not less
than ten days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed and upon such notice as
may be required by such exchange, all as more fully provided in the
Subordinated Indenture.

 

Payment
of the principal of and interest on this Note shall be made at the office or
agency of the Trustee maintained for that purpose in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debt; provided, however, that payment of interest on any Interest
Payment Date (other than the Maturity Date or Redemption Date or Optional
Repayment Date, if any) may be made at the option of the Company by check
mailed to the address

 

2

 

of the Person entitled thereto as such address
shall appear in the Security Register, or by wire transfer of immediately
available funds, if the registered holder of at least $10,000,000 in principal
amount (or such other principal amount specified on the face hereof) of Notes
entitled to such interest has so requested by a notice in writing delivered to
the Trustee not less than 16 days prior to the Interest Payment Date on which
such payment is due, which notice shall provide appropriate instructions for
such transfer.

 

The
principal hereof and interest due at maturity will be paid upon maturity in
immediately available funds against presentation of this Note at the office or
agency of the Trustee maintained for that purpose in the Borough of Manhattan,
The City of New York.

 

REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
IF SET FORTH ON THE FACE HEREOF INCLUDING, WITHOUT LIMITATION, THE PROVISIONS
RELATED TO THE SUBORDINATION OF THIS NOTE TO THE ISSUERS SENIOR INDEBTEDNESS,
AS DEFINED ON THE REVERSE HEREOF.

 

This
Note shall be governed by and construed in accordance with the laws of the
State of New York.

 

This
Note is one of the series of Subordinated Medium-Term Notes, Series C, of the
Company.

 

Unless the certificate of authentication hereon has
been executed by JPMorgan Chase Bank, N.A. (formerly, The Chase Manhattan
Bank), the Trustee under the Subordinated Indenture, or its successor
thereunder by the manual signature of one of its authorized signatories, this
Note shall not be entitled to any benefit under the Subordinated Indenture or
be valid or obligatory for any purpose.

 

3

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BEAR STEARNS COMPANIES
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  
	
   

  	
   

  
	
  [Corporate Seal]

  	
   

  
					

 

CERTIFICATE OF AUTHENTICATION

 

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

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signature

  

 

4

 

[Reverse of Note]

 

THE BEAR STEARNS COMPANIES
INC.

 

SUBORDINATED MEDIUM-TERM NOTE,
SERIES C

(FIXED RATE)

 

This Note is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness (hereinafter called the
“Securities”) of the Company of the series hereinafter specified, all such
Securities issued and to be issued under the Subordinated Indenture dated as of
[         ], as amended (herein called
the “ Subordinated Indenture”) between the Company and JPMorgan Chase Bank,
N.A. (formerly, The Chase Manhattan Bank), as Trustee (herein called the
“Trustee,” which term includes any successor trustee under the Subordinated
Indenture), to which  Subordinated
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights and limitations of rights thereunder of
the Company, the Trustee and the Holders of the Securities, and the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Subordinated Indenture, Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest, if any, at different
rates, may be subject to different redemption provisions, if any, may be
subject to different repayment provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Subordinated
Indenture provided or permitted. This Note is one of a series of the Securities
designated as Subordinated Medium-Term Notes, Series C (the “Notes”). The Notes
of this series may be issued at various times with different maturity dates, redemption
dates and different principal repayment provisions, may bear interest at
different rates and may otherwise vary, all as provided in the Subordinated
Indenture.

 

This Note and all other obligations of the Company
under the Subordinated Indenture will constitute part of the subordinated debt
of the Company, and will be subordinate and junior in right of payment, to the
extent and in the manner set forth in the Subordinated Indenture, to all Senior
Indebtedness of the Company. The Subordinated Indenture defines Senior
Indebtedness as “Indebtedness for Money Borrowed,” whether outstanding on the
date of the Subordinated Indenture or thereafter created, assumed or incurred,
except “Indebtedness Ranking on a Parity with the Securities” or “Indebtedness
Ranking Junior to the Securities” and any deferrals, renewals or extensions of
the Senior Indebtedness. Each Holder of this Note, by accepting the same (a)
agrees to and shall be bound by such subordination provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any such purposes.

 

If
so specified on the face of this Note, this Note may be redeemed by the Company
on and after the date so indicated on the face hereof. If no such date is set
forth on the face hereof, this Note may not be redeemed prior to maturity. On
and after such date, if any, from which this Note may be redeemed, unless
otherwise specified on the face hereof, this Note may be redeemed in whole or
in part in increments of $1,000 (provided, unless a different minimum
denomination is

 

5

 

set forth on the face hereof, that any remaining
principal amount of this Note shall be at least $25,000) at the option of the
Company, at a redemption price equal to 100% of the principal amount to be
redeemed, together with interest thereon payable to the Redemption Date, on
notice given, unless otherwise specified on the face hereof, not more than 60
nor less than 30 days prior to the Redemption Date. If less than all the
Outstanding Notes having such terms as specified by the Company are to be
redeemed, the particular Notes to be redeemed shall be selected by the Trustee
not more than 60 days prior to the Redemption Date from the Outstanding Notes
having such terms as specified by the Company not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate. The
notice of such redemption shall specify which Notes are to be redeemed. In the
event of redemption of this Note, in part only, a new Note or Notes in
authorized denominations for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.

 

If
so specified on the face of this Note, this Note will be subject to repayment
at the option of the Holder hereof on the Optional Repayment Date(s). Except as
set forth in the next paragraph, if no Optional Repayment Date is set forth on
the face hereof, this Note may not be repaid at the option of the Holder prior
to maturity. Unless otherwise specified on the face hereof, on and after the
Optional Repayment Date, if any, from which this Note may be repaid at the
option of the Holder, this Note shall be repayable in whole or in part in
increments of $1,000 (provided, unless a different minimum denomination is set
forth on the face hereof, that any remaining principal amount of this Note
shall be at least $25,000) at a repayment price equal to 100% of the principal
amount to be repaid, together with interest thereon payable to the Optional
Repayment Date. For this Note to be repaid in whole or in part at the option of
the Holder hereof, the Trustee must receive not less than 30 nor more than 60
days prior to the Optional Repayment Date (i) this Note with the form entitled “Option
to Elect Repayment,” which appears below, duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or trust company in the United States of America setting
forth the name of the Holder of this Note, the principal amount of this Note,
the certificate number of this Note or a description of this Note’s tenor or
terms, the principal amount of this Note to be repaid, a statement that the
option to elect repayment is being exercised thereby and a guarantee that this
Note with the form entitled “Option to Elect Repayment,” which appears below,
duly completed, will be received by the Trustee no later than five Business
Days after the date of such telegram, telex, facsimile transmission or letter
and this Note and such form duly completed are received by the Trustee by such
fifth Business Day. Exercise of the repayment option shall be irrevocable.

 

If
an Event of Default with respect to the Notes shall occur and be continuing,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Notes may declare the principal of all the Notes due and payable in
the manner and with the effect provided in the Subordinated Indenture.

 

If a Default with respect
to the Notes shall occur and be continuing, the Trustee may, subject to certain
limitations and conditions, seek to enforce its rights and the rights of the
holders of the Notes for the performance of any covenant or agreement in the
Subordinated Indenture and may demand that the Company pay to it the whole
amount then due and payable on such Notes.

 

6

 

The
Subordinated Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Subordinated Indenture at any time by the Company and the
Trustee with the consent of the Holders of 66-2/3% in aggregate principal
amount of the Securities at the time Outstanding of each series affected
thereby. The Subordinated Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of each 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 future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.

 

Holders
of Securities may not enforce their rights pursuant to the Subordinated Indenture
or the Securities except as provided in the Subordinated Indenture. No
reference herein to the Subordinated Indenture and no provision of this Note or
the Subordinated Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the time, place, and rate, and in the coin or currency, herein
prescribed.

 

As
provided in the Subordinated Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company, and this Note duly executed by, the Holder
hereof or by his attorney duly authorized in writing and thereupon one or more
new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

 

Unless
otherwise specified on the face hereof, the Notes are issuable only in
registered form without coupons in denominations of $25,000 or any amount in
excess thereof which is an integral multiple of $1,000. As provided in the Subordinated
Indenture and subject to certain limitations therein set forth, this Note is
exchangeable for a like aggregate principal amount of Notes of different
authorized denomination as requested by the Holder surrendering the same.

 

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

 

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

 

The
interest rate payable with respect to this Note shall in no event be higher
than the maximum rate, if any, permitted by applicable law.

 

7

 

All
capitalized terms used in this Note and not otherwise defined herein shall have
the meanings assigned to them in the Subordinated Indenture.

 

8

 

ABBREVIATIONS

 

The
following abbreviations, when used in the inscription 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 entireties

  
	
   

  	
   

  	
   

  
	
  JT
  TEN

  	
  -

  	
  as
  joint tenants with right of survivorship and not as tenants in common

  
	
   

  	
   

  	
   

  
	
  UNIF
  GIFT MIN ACT -

  	
   

  	
   

  	
  Custodian

  	
   

  	
   

  	
   

  
	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
  Under Uniform Gifts to Minors
  Act

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (State)

  	
   

  

 

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

 

OPTION
TO ELECT REPAYMENT

 

The
undersigned hereby irrevocably request(s) and instruct(s) the Company to repay
this Note (or portion thereof specified below) pursuant to its terms on                         , 20      
(the “Optional Repayment Date”) at a price equal to the principal amount
thereof, together with interest to the Optional Repayment Date, to the
undersigned at

 

	
   

  
	
   

  
	
   

  

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

 

For
this Note to be repaid the Trustee must receive at 4 New York Plaza, New York,
New York 10004, Attention: Debt Operations — 13th Floor, or at such other place
or places of which the Company shall from time to time notify the Holder of
this Note, not more than 60 days nor less than 30 days prior to the Optional
Repayment Date, this Note with this “Option to Elect Repayment” form duly
completed.

 

9

 

If
less than the entire principal amount of this Note is to be repaid, specify the
portion thereof (which shall be increments of $1,000) which the Holder elects
to have repaid: $                                  ; and specify the denomination or
denominations (which, unless a different minimum denomination is set forth on
the face hereof, shall be $25,000 or an integral multiple of $1,000 in excess
of $25,000) of the Notes to be issued to the Holder for the portion of this
Note not being repaid (in the absence of any such specification, one such Note
will be issued for the portion not being repaid):  $                          .

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Note: The signature to this
  Option to Elect

  Repayment must correspond with the same

  as written upon the face of this Note in

  every particular without alteration or

  enlargement.

  

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the
undersigned 

hereby sell(s), assign(s) and transfer(s) unto

 

 

	
   

  
	
  PLEASE INSERT SOCIAL
  SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  PLEASE
  PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

  
	
   

  
	
   

  
	
  the
  within Note and all rights thereunder, hereby irrevocably constituting and
  appointing

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  (Signature Guarantee)

  	
   

  
					

 

10Exhibit
4(b)(4)

 

Form of Subordinated
Medium-Term Note, Series C (Floating Rate)

 

UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE 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. UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE
& CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

 

	
  REGISTERED

  	
  $

  
	
   

  	
   

  
	
  No. FL-

  	
  CUSIP #

  

 

THE BEAR STEARNS COMPANIES INC.

 

SUBORDINATED MEDIUM-TERM NOTE, SERIES C

(FLOATING RATE)

 

	
  Original
  Issue Date:

   

  Maturity
  Date:

   

  Interest
  Rate Basis:

   

  Initial
  Interest Rate:

   

  Index
  Maturity:

   

  Spread
  (plus or minus):

   

  Maximum
  Interest Rate:

   

  Minimum
  Interest Rate:

   

  Minimum
  Denominations:

  	
  Interest Reset Date(s):

   

  Interest Reset Period:

   

  Interest Payment Date(s):

   

  Interest
  Payment Period:

   

  Redeemable
  On and After:

   

  Optional
  Repayment Date(s): 

  

 

 

THE BEAR STEARNS
COMPANIES INC., a Delaware corporation (the “Company”), for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the principal
amount stated above on the Maturity Date shown above (the “Maturity Date”) and
to pay interest thereon at the rate per annum equal to the Initial Interest
Rate shown above until the first Interest Reset Date shown above following the
Original Issue Date shown above and thereafter at a rate determined in
accordance with the provisions on the reverse hereof under the heading “Determination
of Commercial Paper Rate,” “Determination of LIBOR,” “Determination of Federal
Funds Rate,” “Determination of Treasury Rate,” “Determination of Prime Rate” or
“Determination of CMT Rate” depending upon whether the Interest Rate Basis is
Commercial Paper Rate, LIBOR, Federal Funds Rate, Treasury Rate, Prime Rate or
CMT Rate, as indicated above, until the principal hereof is fully paid or duly
made available for payment. The Company will pay interest monthly, quarterly,
semiannually or annually as indicated above on each Interest Payment Date shown
above commencing with the first Interest Payment Date shown above immediately
following the Original Issue Date shown above, and on the Maturity Date or, if
applicable, the Redemption Date or Optional Repayment Date; provided, however,
that if the Original Issue Date shown above is between a Regular Record Date
(as defined below) and an Interest Payment Date, interest payments will
commence on the Interest Payment Date following the next succeeding Regular
Record Date; and provided, further, however, that if an
Interest Payment Date, Maturity Date, Redemption Date or Optional Repayment
Date would fall on a day that is not a Business Day (as defined on the reverse
hereof), unless otherwise specified on the face hereof, the related payment of
principal, premium, if any, or interest shall be made on the following day that
is a Business Day, and no interest shall
accrue for the period from and after that Interest Payment Date,
Maturity Date, Redemption Date or Optional Repayment Date, as the case may be, to the next Business Day. In the event the
Interest Rate Basis is LIBOR, as indicated above, if such next Business Day
falls in the next calendar month, principal, premium, if any, or interest will
be paid on the preceding day that is a Business Day, provided that any such
Business Day is also a London Banking Day (as defined on the reverse hereof),
with respect to such LIBOR Note. Except as provided above and in the Subordinated
Indenture referred to on the reverse hereof, interest payments will be made on
the Interest Payment Dates shown above. The “Regular Record Date” shall be the
date whether or not a Business Day 15 calendar days immediately preceding such
Interest Payment Date, unless otherwise specified on the face hereof.

 

The interest so payable,
and punctually paid or duly provided for, on the Interest Payment Dates
referred to above, will, as provided in the Subordinated Indenture, be paid to
the Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, provided, however, that interest payable on the
Maturity Date, or if applicable, the Redemption Date or Optional Repayment
Date, will be paid to the Person to whom the principal of this Note is payable.
Any such interest which is payable, but is not punctually paid or duly provided
for, on any Interest Payment Date shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to the Holder of this
Note not less than ten days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Notes may be listed and upon such
notice as may be required by such exchange, all as more fully provided in the Subordinated
Indenture.

 

2

 

Payment of the principal
of and interest on this Note shall be made at the office or agency of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debt; provided,
however, that payment of interest on any Interest Payment Date (other
than the Maturity Date or Redemption Date or Optional Repayment Date, if any)
may be made at the option of the Company by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register,
or by wire transfer of immediately available funds, if the registered holder of
at least $10,000,000 in principal amount (or such other principal amount
specified on the face hereof) of Notes entitled to such interest has so
requested by a notice in writing delivered to the Trustee not less than 16 days
prior to the Interest Payment Date on which such payment is due, which notice
shall provide appropriate instructions for such transfer.

 

The principal hereof and
interest due at maturity will be paid upon maturity in immediately available
funds against presentation of this Note at the office or agency of the Trustee
maintained for that purpose in the Borough of Manhattan, The City of New York.

 

REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
IF SET FORTH ON THE FACE HEREOF INCLUDING, WITHOUT LIMITATION, THE PROVISIONS
RELATED TO THE SUBORDINATION OF THIS NOTE TO THE ISSUERS SENIOR INDEBTEDNESS,
AS DEFINED ON THE REVERSE HEREOF.

 

This Note shall be
governed by and construed in accordance with the laws of the State of New York.

 

This Note is one of the
series of Subordinated Medium-Term Notes, Series C, of the Company.

 

Unless the certificate of
authentication hereon has been executed by JPMorgan Chase Bank (formerly, The
Chase Manhattan Bank), the Trustee under the Subordinated Indenture, or its
successor thereunder by the manual signature of one of its authorized
signatories, this Note shall not be entitled to any benefit under the Subordinated
Indenture or be valid or obligatory for any purpose.

 

3

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BEAR STEARNS COMPANIES
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  
	
   

  	
   

  
	
  [Corporate Seal]

  	
   

  
					

 

 

CERTIFICATE OF AUTHENTICATION

 

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

 

	
   

  	
  JPMORGAN
  CHASE BANK, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signature

  

 

4

 

[Reverse of Note]

 

THE BEAR STEARNS COMPANIES INC.

 

SUBORDINATED MEDIUM-TERM NOTE, SERIES B

(FLOATING RATE)

 

This Note is one of a
duly authorized issue of debentures, notes or other evidences of indebtedness
(hereinafter called the “Securities”) of the Company of the series hereinafter
specified, all such Securities issued and to be issued under the Subordinated Indenture
dated as of [            ], as
amended (herein called the “Subordinated Indenture”), between the Company and
JPMorgan Chase Bank (formerly, The Chase Manhattan Bank), as Trustee (herein
called the “Trustee,” which term includes any successor trustee under the Subordinated
Indenture), to which Subordinated Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
limitations of rights thereunder of the Company, the Trustee and the Holders of
the Securities, and the terms upon which the Securities are, and are to be,
authenticated and delivered. As provided in the Subordinated Indenture,
Securities may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest, if any, at different rates, may be subject to different
redemption provisions, if any, may be subject to different repayment
provisions, if any, may be subject to different sinking, purchase or analogous
funds, if any, may be subject to different covenants and Events of Default and
may otherwise vary as in the Subordinated Indenture provided or permitted. This
Note is one of a series of the Securities designated as Subordinated Medium-Term
Notes, Series B (the “Notes”). The Notes of this series may be issued at
various times with different maturity dates, redemption dates and different
principal repayment provisions, may bear interest at different rates and may
otherwise vary, all as provided in the Subordinated Indenture.

 

This note and all other obligations of the Company
hereunder will constitute party of the subordinated debt of the Company, and
will be subordinate and junior in right of payment, to the extent and in the
manner set forth in the Subordinated Indenture, to all Senior Indebtedness of
the Issuer. The Subordinated Indenture defines Senior Indebtedness as
“Indebtedness for Money Borrowed,” whether outstanding on the date of the
Subordinated Indenture or thereafter created, assumed or incurred, except
“Indebtedness Ranking on a Parity with the Securities” or “Indebtedness Ranking
Junior to the Securities” and any deferrals, renewals or extensions of the
Senior Indebtedness.

 

The interest payable on
this Note on each Interest Payment Date will include accrued interest from and
including the Original Issue Date or from and including the last date in
respect of which interest has been paid, as the case may be, to, but excluding,
such Interest Payment Date, except that the interest payment at the Maturity
Date, Redemption Date or Optional Repayment Date will include interest accrued
to but excluding such date. Accrued interest from the Original Issue Date or
from the last date to which interest has been paid is calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factors calculated for each
day from the Original Issue Date, or from the last date to which interest has
been paid, to the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal calculated to seven decimal places
without

 

5

 

rounding) for each such day is computed by dividing the interest rate
applicable to such day by 360, in the case of Commercial Paper Rate Notes,
Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes, or by the actual
number of days in the year, in the case of Treasury Rate Notes. With respect to
CMT Rate Notes, interest is calculated on the basis of twelve 30-day months and
a 360-day year. The interest rate in effect on each day will be (a) if such day
is an Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to such Interest Reset Date or (b) if such day is
not an Interest Reset Date, the interest rate with respect to the Interest
Determination Date pertaining to the next preceding Interest Reset Date; provided,
however, that (i) the interest rate in effect from the Original Issue
Date to the first Interest Reset Date will be the Initial Interest Rate as
specified on the face hereof and (ii) the interest rate in effect for the ten
calendar days immediately prior to maturity will be that in effect on the tenth
calendar day preceding maturity. Notwithstanding the foregoing, if the rate at
which interest is payable is adjusted daily or weekly, such rate of interest
shall be adjusted until the Interest Reset Date immediately preceding the
Maturity Date. Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. All percentages resulting from
any calculations will be rounded, if necessary, to the nearest one
hundred-thousandth of a percent, with five one-millionths of a percent being
rounded upwards. In addition, the interest rate hereon shall in no event be
higher than the maximum rate, if any, permitted by applicable law.

 

Commencing with the first
Interest Reset Date shown on the face hereof following the Original Issue Date,
and thereafter on each succeeding Interest Reset Date specified on the face
hereof, the rate at which interest on this Note is payable shall be adjusted
daily, weekly, monthly, quarterly, semiannually or annually as specified on the
face hereof under “Interest Reset Date(s).” Each such adjusted rate shall be
applicable on and after the Interest Reset Date to which it relates to but not
including the next succeeding Interest Reset Date or until the Maturity Date
or, if applicable, the Redemption Date or Optional Repayment Date, as the case
may be. The Interest Reset Date will be, if this Note resets daily, each
Business Day; if this Note resets weekly, the Wednesday of each week (with the
exception of weekly reset Treasury Rate Notes which will reset the Tuesday of
each week, except as specified below); if this Note resets monthly, the third
Wednesday of each month; if this Note resets quarterly, the third Wednesday of
March, June, September and December; if this Note resets semiannually, the
third Wednesday of the two months specified on the face hereof; and if this
Note resets annually, the third Wednesday of the month specified on the face
hereof. Subject to applicable law and except as specified herein, on each
Interest Reset Date, the rate of interest on this Note shall be the rate
determined in accordance with the provisions applicable below, plus or minus
the Spread (as specified on the face hereof), if any. If any Interest Reset
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding day that is a Business Day,
except that in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the next preceding
Business Day. “Business Day” means (i) with respect to any Note, any day that
is not a Saturday or Sunday, and that is neither a legal holiday nor a day on
which banking institutions or trust companies in New York City are authorized
or obligated by law to close, and (ii) with respect to LIBOR Notes only, a
London Banking Day. A “London Banking Day” means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.

 

6

 

The Interest
Determination Date pertaining to an Interest Reset Date will be, if the
Interest Rate Basis is Commercial Paper Rate or Federal Funds (Effective) Rate,
the Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date will be, if the
Interest Rate Basis is LIBOR, the second London Banking Day preceding such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date will be, if the Interest Rate Basis is Treasury Rate, the day of the
week in which such Interest Reset Date falls on which Treasury bills (as
defined below) of the Index Maturity specified on the face hereof are
auctioned. Treasury bills normally are auctioned 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 that such auction may be held on the preceding
Friday. If, as a result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week.
Interest payable hereon will be payable monthly, quarterly, semiannually or
annually (the “Interest Payment Period”) as specified on the face hereof. The
Interest Determination Date pertaining to an Interest Reset Date will be, if
the Interest Rate Basis is Prime Rate or Federal Funds (Open) Rate, the same
day as such Interest Reset Date. The Interest Determination Date pertaining to
an Interest Reset Date will be, if the Interest Rate Basis is CMT Rate, the
tenth Business Day prior to each Interest Reset Date. Unless otherwise shown on
the face hereof, interest will be payable, if this Note resets daily, weekly or
monthly, on the third Wednesday of each month or on the third Wednesday of
March, June, September and December, of each year; if this Note resets
quarterly, on the third Wednesday of March, June, September and December, of
each year; if this Note resets semiannually, on the third Wednesday of the two
months of each year specified on the face hereof; and if this Note resets
annually, on the third Wednesday of the month specified on the face hereof
(each such date being an “Interest Payment Date”) and in each case, at maturity
or, if applicable, upon redemption or optional repayment.

 

Determination of
Commercial Paper Rate. If the Interest Rate Basis specified
on the face hereof is “Commercial Paper Rate,” the interest rate shall equal
(a) the Money Market Yield (as defined below) on the applicable Interest
Determination Date of the rate for commercial paper having the Index Maturity
specified on the face hereof (i) as published by the Board of Governors of the
Federal Reserve System in “Statistical Release H.15(519), Selected Interest
Rates,” or any successor publication (“H.l5(519)”), under the heading “Commercial
Paper—Nonfinancial” or (ii) in the event that such rate is not published on the
Calculation Date (as defined below) pertaining to such Interest Determination
Date, then as published in H.15 Daily Update or any other recognized electronic
source used for displaying that rate under the heading “Commercial Paper—Nonfinancial”
or (b) if neither of such yields is published by 3:00 P.M., New York City time,
on such Calculation Date, the Money Market Yield of the arithmetic mean of the
offered rates as of 11:00 A.M., New York City time, of three leading dealers of
commercial paper in The City of New York selected by JPMorgan Chase Bank
(formerly, The Chase Manhattan Bank), as Calculation Agent (or any successor
calculation agent, or any other Calculation Agent named on the face hereof, the
“Calculation Agent”), on that Interest Determination Date, for commercial paper
of the Index Maturity specified on the face hereof placed for an industrial
issuer whose bond rating is “AA,” or the equivalent, from a nationally
recognized rating agency, in each of the above cases, adjusted by the addition
or subtraction of the Spread, if any, specified on the face hereof; provided,
however, that if such dealers are not quoting as mentioned above, the
interest rate in effect hereon until the Interest Reset Date next succeeding
the Interest Reset Date to which such Interest

 

7

 

Determination Date relates shall be the rate in effect on the Interest
Determination Date next preceding such Interest Reset Date.

 

“Money Market Yield”
shall be a yield calculated in accordance with the following formula:

 

	
  Money Market Yield

  	
  =

  	
  D x 360

  	
   

  	
  x 100

  
	
   

  	
   

  	
  360 – (D x M)

  	
   

  	
   

  

 

where “D” refers to the
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 LIBOR.
If the Interest Rate Basis specified on the face hereof is “LIBOR,” the
interest rate shall equal, as specified on the face hereof, either (a) the
offered rates for deposits in U.S. dollars having the Index Maturity specified
on the face hereof, commencing on the second London Banking Day immediately
following the applicable Interest Determination Date which appears on Telerate
Page 3750 (or such other page as may replace Telerate Page 3750 for the purpose
of displaying London interbank rates of major banks), as of 11:00 A.M., London
time, on such Interest Determination Date adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof (“LIBOR
Telerate”) or (b) the arithmetic mean, as determined by the Calculation Agent,
of the offered rates for deposits in U.S. dollars having the Index Maturity
specified on the face hereof, commencing on the second London Banking Day
immediately following the applicable Interest Determination Date which appears
on the Reuters Screen LIBO Page (or such other page as may replace such Reuters
Screen LIBO Page for the purpose of displaying London interbank rates of major
banks), as of 11:00 A.M., London time, on such Interest Determination Date, if
at least two such offered rates appear on the Reuters Screen LIBO Page (or such
other page as may replace such page) (“LIBOR Reuters”); provided, however,
that if no such rate appears on Telerate Page 3750 (or such other page as may
replace such page) or if fewer than two offered rates appear on the Reuters
Screen LIBO Page (or such other page as may replace such page), the Calculation
Agent shall request the principal London office of each of four major banks in
the London interbank market selected by the Calculation Agent to provide a
quotation of the rate at which such bank offered to prime banks in the London
interbank market at approximately 11:00 A.M., London time, on such Interest
Determination Date, deposits in U.S. dollars having the Index Maturity
specified on the face hereof commencing on the second London Banking Day
immediately following such Interest Determination Date and in a principal
amount equal to an amount not less than U.S. $1,000,000 that is representative
of a single transaction in such market at such time, and such rate of interest
hereon shall equal the arithmetic mean of (a) such quotations, if at least two
quotations are provided, or (b) if less than two quotations are provided, the
rates quoted at approximately 11:00 A.M., New York City time, on such Interest
Determination Date by three major banks in The City of New York, selected by
the Calculation Agent for loans in U.S. dollars to leading European banks,
having the Index Maturity specified on the face hereof commencing on the second
London Banking Day immediately following such Interest Determination Date and
in a principal amount as aforesaid, in either case, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof; provided,
however, that if the three banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned above, the interest rate in
effect hereon until the Interest Reset Date next succeeding the Interest Reset

 

8

 

Date to which such Interest Determination Date relates shall be the
rate in effect on the Interest Determination Date next preceding such Interest
Reset Date.

 

Determination of Federal
Funds Rate. If the Interest Rate Basis specified on the face
hereof is “Federal Funds Rate,” the interest rate shall equal either the
Federal Funds (Effective) Rate or the Federal Funds (Open) Rate.

 

Unless otherwise
specified on the face hereof, the Federal Funds (Effective) Rate shall equal
(a) the rate on the applicable Interest Determination Date specified on the
face hereof for Federal Funds as published in H.15(519) under the heading “Federal
funds (effective)” on Telerate page 120 or any successor service or page, or
(b) if such rate is not so published on the Calculation Date pertaining to such
Interest Determination Date, then the rate on the applicable Interest
Determination Date as published in H.15 Daily Update or any other recognized
electronic source used for displaying that rate under the heading “Federal
Funds/Effective Rate.”

 

Unless otherwise
specified on the face hereof, the Federal Funds (Open) Rate shall equal the
rate on the applicable Interest Determination Date specified on the face hereof
for Federal Funds as reported on Telerate Page 5 under the heading “Federal
Funds/Open.”

 

If (a) the applicable
Federal Funds (Effective) Rate described above or (b) the Federal Funds (Open)
Rate described above is not published by 3:00 P.M., New York City time, on the
relevant Calculation Date, then the Federal Funds (Effective) Rate and the
Federal Funds (Open) Rate, as applicable, will be calculated by the Calculation
Agent as the arithmetic mean of the rates for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions
in The City of New York selected by the Calculation Agent as of 11:00 A.M., New
York City time, on such Interest Determination Date, in each of the above
cases, adjusted by the addition or subtraction of the Spread, if any, specified
on the face hereof; provided, however, that if such brokers are
not quoting as mentioned above, the interest rate in effect hereon until the
Interest Reset Date next succeeding the Interest Reset Date to which such
Interest Determination Date relates shall be the rate in effect on the Interest
Determination Date next preceding such Interest Reset Date.

 

Determination of Treasury
Rate. If the Interest Rate Basis specified on the face hereof
is “Treasury Rate,” the interest rate shall equal the rate for the auction held
on the applicable Interest Determination Date of direct obligations of the
United States (“Treasury bills”) having the Index Maturity specified on the
face hereof as published under the column designated “Invest Rate” on Telerate
page 56 under the heading “US Treasury 3 MO T-Bill Auction Results” or Telerate
page 57 under the heading “US Treasury 6 MO T-Bill Auction Results,” as
applicable, or any successor publication, or, if not so published on the
Calculation Date pertaining to such Interest Determination Date, the auction
average rate (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced
by the United States Department of the Treasury, in either case, adjusted by
the addition or subtraction of the Spread, if any, specified on the face
hereof. In the event that the results are not published or reported as provided
above by 3:00 P.M., New York City time, on such Calculation Date, or if no such
auction is held in a particular week, then the rate of interest herein shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the

 

9

 

secondary market bid rates as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United States
government securities dealers selected by the Calculation Agent for the issue
of Treasury bills with a remaining maturity closest to the Index Maturity
specified on the face hereof, adjusted by the addition or subtraction of the
Spread, if any, specified on the face hereof; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned above, the interest rate in effect hereon until the
Interest Reset Date next succeeding the Interest Reset Date to which such
Interest Determination Date relates shall be the rate in effect on the Interest
Determination Date next preceding such Interest Reset Date.

 

Determination of Prime
Rate. If the Interest Rate Basis specified on the face hereof
is “Prime Rate,” the interest rate shall equal (a) the rate on the applicable
Interest Determination Date (i) as reported on Telerate Page 5 under the
heading “Bank Rates/Prime” or (ii) as published in H.15(519), under the caption
“Bank Prime Loan”, (b) if the rates referred to under (a)(i) and (a)(ii) are
not published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the arithmetic mean (as
calculated by the Calculation Agent) of the rates of interest publicly announced
by each bank named on the Reuters Screen NYMF Page (as defined below) as such
bank’s prime rate or base lending rate as in effect for such Interest
Determination Date as quoted on the Reuters Screen NYMF Page for such Interest
Determination Date, or, if fewer than four such rates appear on the Reuters
Screen NYMF Page for such Interest Determination Date, the rate shall be the
arithmetic mean (as calculated by the Calculation Agent) of the prime rates
quoted on the basis of the actual number of days in the year divided by 360 as
of the close of business on such Interest Determination Date by at least two of
the three major money center banks in The City of New York selected by the
Calculation Agent (after consultation with the Company) from which quotations
are requested, or (c) if fewer than two quotations are provided under (b)
above, the Prime Rate shall be calculated by the Calculation Agent and shall be
determined as the arithmetic mean on the basis of the prime rates in The City
of New York by the appropriate number of substitute banks or trust companies
organized and doing business under the laws of the United States, or any State
thereof, in each case having total equity capital of at least U.S. $500 million
and being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent (after consultation with the Company) to
quote such rate or rates, in each case adjusted by the addition or subtraction
of the Spread, if any, specified on the face hereof; provided, however,
that if in any month or two consecutive months, the Prime Rate is not reported
or published as provided above, and if such quotations are not available, the
interest rate in effect hereon until the Interest Reset Date next succeeding
the Interest Reset Date to which such Interest Determination Date relates shall
be the rate in effect on the Interest Determination Date next preceding such
Interest Reset Date in each case.

 

If this failure continues
over three or more consecutive months, the Prime Rate for each succeeding
Interest Determination Date until the maturity or redemption of this Note or,
if earlier, until this failure ceases, shall be LIBOR determined as if this
Note were a LIBOR Note, and the Spread, if any, will be the number of basis points
specified on the face hereof as the “Alternate Rate Event Spread.”

 

“Reuters Screen NYMF Page”
means the display designated as Page “NYMF” on the Reuters Monitor Money Rates
Service (or such other page as may replace the NYMF Page on

 

10

 

that service for the purpose of displaying prime rates or base lending
rates of major United States banks).

 

Determination of CMT Rate.
If the Interest Rate Basis specified on the face hereof is “CMT Rate,” the
interest rate will be determined by the Calculation Agent on each Interest
Determination Date in accordance with the following provisions, in each case,
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof.

 

Unless otherwise
specified on the face hereof, the CMT Rate will be:

 

(a)           the rate displayed on the designated
CMT Telerate Page, under the caption for “... Treasury Constant Maturities...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.,” under
the column for the designated CMT Index Maturity, for: (i) the latest rate
displayed at the close of business on such Interest Determination Date if the
designated CMT Telerate Page is 7051; or (ii) the average for the week, or the
month, as specified on the face hereof, ended immediately before the week in
which the related Interest Determination Date occurs if the designated CMT
Telerate Page is 7052.

 

(b)           If the applicable rate specified in
(a) above is not displayed on the relevant page by 3:00 p.m., New York City
time on that Calculation Date, unless the calculation is made earlier and the
rate is available from that source at that time on the Calculation Date, then
the CMT Rate will be the Treasury constant maturity rate having the designated
Index Maturity, as published in H.15(519) or another recognized electronic
source for displaying the rate.

 

(c)           If the applicable rate specified in
(b) above is not published in H.15(519) or another recognized electronic source
for displaying such rate by 3:00 p.m., New York City time on that Calculation
Date, unless the calculation is made earlier and the rate is available from one
of those sources at that time, then the CMT Rate will be the Treasury constant
maturity rate, or other United States Treasury rate, for the Index Maturity and
with reference to the relevant Interest Determination Date, that is published
by either the Board of Governors of the Federal Reserve System or the United
States Department of the Treasury and that the Calculation Agent determines to
be comparable to the rate formerly displayed on the designated CMT Telerate
Page and published in H.15(519).

 

(d)           If the applicable rate specified in
(c) above cannot be determined, then the Calculation Agent will determine the
CMT Rate to be a yield to maturity based on the average of the secondary market
offered rates as of approximately 3:30 p.m., New York City time, on the
relevant Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
in New York City. The Calculation Agent will select five such securities dealers
after consulting with the Company, and will eliminate 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 the most recently issued
direct noncallable fixed rate obligations of the United States Treasury (“Treasury
Notes”) with an original maturity of approximately the designated Index
Maturity and a remaining term to maturity of not less than the designated Index
Maturity minus one year in a representative amount. If two Treasury Notes with
an original maturity as described above have remaining terms to maturity
equally close to the designated Index Maturity, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.

 

11

 

(e)           If the Calculation Agent cannot
obtain three Treasury Note quotations of the kind described in the prior paragraph,
the Calculation Agent will determine the CMT Rate to be the yield to maturity
based on the average of the secondary market offered rates for Treasury Notes
with an original maturity longer than the designated CMT Index Maturity which
have a remaining term to maturity closest to the designated CMT Index Maturity
and in a representative amount, as of approximately 3:30 p.m., New York City
time, on the relevant Interest Determination Date of leading primary United
States government securities dealers in New York City. In selecting these
offered rates, the Calculation Agent will request quotations from at least five
such securities dealers and will disregard the highest quotation (or if there
is equality, one of the highest) and the lowest quotation (or if there is
equality, one of the lowest). If two Treasury Notes with an original maturity
longer than the designated CMT Index Maturity have remaining terms to maturity
that are equally close to the designated CMT Index Maturity, the Calculation
Agent will obtain quotations for the Treasury Note with the shorter remaining
term to maturity.

 

(f)            If
fewer than five but more than two if the leading primary United States
government securities dealers  are
quoting as described in the prior paragraph, then the CMT Rate for the relevant
Interest Determination Date will be based on the average of the offered rates
obtained, and neither the highest nor the lowest of those quotations will be
eliminated.

 

(g)           If
two or fewer leading primary United States government securities dealers
selected by the Calculation Agent are quoting as described above, the CMT Rate
will remain the CMT Rate then in effect on that Interest Determination Date.

 

The Calculation Date
pertaining to an Interest Determination Date shall be the earlier of (a) 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 (b) the Business Day
prior to the applicable Interest Payment Date, Maturity Date, Redemption Date
or Optional Repayment Date. The Calculation Agent shall calculate the interest
rate hereon in accordance with the foregoing and will confirm in writing such
calculation to the Trustee and any Paying Agent immediately after each
determination. Neither the Trustee nor any Paying Agent shall be responsible
for any such calculation. All determinations made by the Calculation Agent
shall be, in the absence of manifest error, conclusive for all purposes and
binding on the Company and holders of the Note. At the request of the Holder
hereof, the Calculation Agent will provide to the Holder hereof the interest
rate hereon then in effect and, if different, the interest rate that will
become effective as a result of a determination made on the most recent
Interest Reset Date with respect to the Note.

 

If so specified on the
face of this Note, this Note may be redeemed by the Company on and after the
date so indicated on the face hereof. If no such date is set forth on the face
hereof, this Note may not be redeemed prior to maturity. On and after such
date, if any, from which this Note may be redeemed, unless otherwise specified
on the face hereof, this Note may be redeemed in whole or in part in increments
of $1,000 (provided, unless a different
minimum denomination is set forth on the face hereof, that any remaining
principal amount of this Note shall be at least $25,000) at the option
of the Company, at a redemption price equal to 100% of the principal amount to
be redeemed, together with interest thereon payable to the Redemption Date, on
notice given, unless otherwise specified on the face hereof, not more than 60
nor less than 30 days prior to the Redemption Date. If less than all the
Outstanding Notes having such terms as specified by the Company are to be
redeemed, the particular Notes to be redeemed shall be selected by the Trustee

 

12

 

not more than 60 days prior to the Redemption Date from the Outstanding
Notes having such terms as specified by the Company not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate. The
notice of such redemption shall specify which Notes are to be redeemed. In the
event of redemption of this Note, in part only, a new Note or Notes in
authorized denominations for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.

 

If so specified on the
face of this Note, this Note will be subject to repayment at the option of the
Holder hereof on the Optional Repayment Date(s). Except as set forth in the
next paragraph, if no Optional Repayment Date is set forth on the face hereof,
this Note may not be repaid at the option of the Holder prior to maturity.
Unless otherwise specified on the face hereof, on and after the Optional
Repayment Date, if any, from which this Note may be repaid at the option of the
Holder, this Note shall be repayable in whole or in part in increments of
$1,000 (provided, unless a different
minimum denomination is set forth on the face hereof, that any remaining
principal amount of this Note shall be at least $25,000) at a repayment
price equal to 100% of the principal amount to be repaid, together with
interest thereon payable to the Optional Repayment Date. For this Note to be
repaid in whole or in part at the option of the Holder hereof, the Trustee must
receive not less than 30 nor more than 60 days prior to the Optional Repayment
Date (i) this Note with the form entitled “Option to Elect Repayment,” which
appears below, duly completed or (ii) a telegram, telex, facsimile transmission
or a letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
in the United States of America setting forth the name of the Holder of this
Note, the principal amount of this Note, the certificate number of this Note or
a description of this Note’s tenor or terms, the principal amount of this Note
to be repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Note with the form entitled “Option to Elect
Repayment,” which appears below, duly completed, will be received by the
Trustee no later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter and this Note and such form duly
completed are received by the Trustee by such fifth Business Day. Exercise of
the repayment option shall be irrevocable.

 

If an Event of Default
with respect to the Notes shall occur and be continuing, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Notes may
declare the principal of all the Notes due and payable in the manner and with
the effect provided in the Subordinated Indenture.

 

If a Default with respect
to the Notes shall occur and be continuing, the Trustee may, subject to certain
limitations and conditions, seek to enforce its rights and the rights of the
holders of the Notes for the performance of any covenant or agreement in the
Subordinated Indenture and may demand that the Company pay to it the whole
amount then due and payable on such Notes.

 

The Subordinated Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities of each series to be affected under the Subordinated
Indenture at any time by the Company and the Trustee with the consent of the
Holders of 66-2/3% in aggregate principal amount of the Securities at the time
Outstanding of each series affected thereby. The Subordinated Indenture also
contains provisions permitting the Holders of specified

 

13

 

percentages in aggregate principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all Securities of each
series, to waive compliance by the Company with certain provisions of the Subordinated
Indenture and certain past defaults under the Subordinated 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 future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.

 

Holders of Securities may
not enforce their rights pursuant to the Subordinated Indenture or the
Securities except as provided in the Subordinated Indenture. No reference
herein to the Subordinated Indenture and no provision of this Note or the Subordinated
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the time, place, and rate, and in the coin or currency, herein prescribed.

 

As provided in the Subordinated
Indenture and subject to certain limitations therein set forth, the transfer of
this Note may be registered on the Security Register of the Company, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of Manhattan, The City of New York, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company, and this Note duly executed by, the Holder hereof or by his
attorney duly authorized in writing and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

Unless otherwise specified
on the face hereof, the Notes are issuable only in registered form without
coupons in denominations of $25,000 or any amount in excess thereof which is an
integral multiple of $1,000. As provided in the Subordinated Indenture and
subject to certain limitations therein set forth, this Note is exchangeable for
a like aggregate principal amount of Notes of different authorized denomination
as requested by the Holder surrendering the same.

 

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

 

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

 

The
interest rate payable with respect to this Note shall in no event be higher
than the maximum rate, if any, permitted by applicable law.

 

All capitalized terms used in this Note and not
otherwise defined herein shall have the meanings assigned to them in the
Subordinated Indenture.

 

14

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription 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 entireties

  
	
   

  	
   

  	
   

  
	
  JT
  TEN

  	
  -

  	
  as
  joint tenants with right of survivorship and not as tenants in common

  
	
   

  	
   

  	
   

  
	
  UNIF
  GIFT MIN ACT -

  	
   

  	
   

  	
  Custodian

  	
   

  	
   

  	
   

  
	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
  Under Uniform Gifts to Minors
  Act

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (State)

  	
   

  
										

 

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

 

 

OPTION TO ELECT REPAYMENT

 

The undersigned hereby
irrevocably request(s) and instruct(s) the Company to repay this Note (or
portion thereof specified below) pursuant to its terms on                           ,
20     (the “Optional Repayment Date”) at a price equal to
the principal amount thereof, together with interest to the Optional Repayment
Date, to the undersigned at

 

	
   

  
	
   

  
	
   

  

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

 

For this Note to be
repaid the Trustee must receive at 4 New York Plaza, New York, New York 10004,
Attention:  Debt Operations — 13th Floor,
or at such other place or places of which the Company shall from time to time
notify the Holder of this Note, not more than 60 days nor less than 30 days
prior to the Optional Repayment Date, this Note with this “Option to Elect
Repayment” form duly completed.

 

15

 

If less than the entire
principal amount of this Note is to be repaid, specify the portion thereof
(which shall be increments of $1,000) which the Holder elects to have
repaid:  $                            ;
and specify the denomination or denominations (which, unless a different
minimum denomination is set forth on the face hereof, shall be $25,000 or an
integral multiple of $1,000 in excess of $25,000) of the Notes to be issued to
the Holder for the portion of this Note not being repaid (in the absence of any
such specification, one such Note will be issued for the portion not being
repaid):  $                                .

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Note:  The signature to this Option to Elect
  Repayment must

  correspond with the same as written upon the face of this

  Note in every particular without alteration or enlargement.

  

 

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned 

hereby sell(s), assign(s) and transfer(s) unto

 

	
   

  
	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
  POSTAL ZIP CODE OF ASSIGNEE

  
	
   

  
	
   

  
	
  the within Note and all
  rights thereunder, hereby irrevocably constituting and appointing

  
	
   

  
	
   

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

  

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature Guarantee)

  	
   

  
						

 

16

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